Welcome to Pacific Economic Survey 2008. This is the first of a series of annual economic reports that will provide an overview and an update of economic developments in the Pacific region and Timor-Leste.

Each Survey will also feature an analysis of economic issues of particular importance to the Pacific. This year’s survey looks at ways of better connecting the Pacific through telecommunications, aviation and shipping services.

The countries of the South Pacific are spread over a vast area. For the most part they are small parcels of land lying in very large sea corridors. Populations are generally small and the countries themselves are culturally and politically diverse. Papua New Guinea alone, with a population of just six million people, has over 800 indigenous languages. Its rugged, mountainous topography makes interaction between some communities difficult. At the other end of the scale is the micro state of Tokelau, with about 1,500 inhabitants occupying just 12 square kilometres.

The sheer physical remoteness of the Pacific island nations poses challenges when taking part in global trade and investment. Yet the economies of the Pacific island nations and Timor-Leste are growing. In 2008, regional economic growth is estimated to reach 4.5 per cent – a sharp contrast to the stagnation that marked the early years of the decade. Vanuatu, Samoa and Palau have benefited from expanding tourism sectors. Record levels of commodity exports are fuelling the economies of Papua New Guinea and Timor-Leste. The rebounding Solomon Islands economy is being driven in large part by substantial aid flows and logging. While still well short of the growth being experienced in North and South Asia, the recent improvements are encouraging.

Better telecommunications, aviation and shipping services are making the Pacific less isolated and are bringing the region closer together. Mobile phone use is gathering pace and the internet is becoming more accessible. New entrants to the aviation sector mean more regular and cheaper flights to Pacific island countries.  Creative ways of providing shipping services in some countries are making even the most remote island just that bit easier to reach.

Pacific Economic Survey 2008 looks at the impediments to growth in the Pacific and Timor-Leste and offers country examples of how these barriers are successfully being overcome. It contains a wealth of information, statistical data and case studies to help countries develop policies that will foster economic growth, reduce poverty and edge closer to meeting the Millennium Development Goals.