PRIVATE SECTOR DEVELOPMENT II CHALLENGES OPPORTUNITIES IN

PRIVATE SECTOR DEVELOPMENT II: CHALLENGES & OPPORTUNITIES IN THE PACIFIC 1 st Pacific –EU Business Forum Port Vila. Vanuatu. 11 th to 12 th June 2012 By: Eddie L. Wilson Chairman-International Kava Executive Council & Managing Director-Wilex-Samoa Group Involved in Agro-Processing and Export development over 25 years Website links: www. ikec. org. www. wilexsamoa. net

SWIMMING AGAINST THE TIDE Export of Agriculture and Agro-Value added products from the Pacific is becoming more and more difficult, if not impossible with increasing globalization and imposition of non-tariff restrictions by the stronger trading partners. In essence the Pacific Agro-Trade and Export operates in an environment that is best described as -SWIMMING AGAINST THE TIDE. And with climate change issues-THE TIDE GETS STRONGER EVERY DAY “The man who is swimming against the stream knows the strength of it. ” Woodrow T. Wilson quotes (American 28 th President of the United States 1856 -1924) WORLD BANK PAPER TO G 20 FINANCE MINISTERS-UK March 2009 (“Swimming against the tide”)

“Challenges and opportunities for trade between the Pacific and the European Union” CHALLENGES Trade restrictions (kava example-www. ikec. org) Quality assurance Scientific research Capacity to implement Quality standards and processes Product and market development OPPORTUNITIES Natural products-for health care/organic cert Natural alternative to synthetic medicine Uniqueness to the Pacific-Giregistration/fair trade-Pacific Product group-piggy-back on existing lines Products with Supply Capacity Alternative markets. New Research/Science

PROBLEMS & CHALLENGES COMPETITIVE MARKET ENVIRONMENT * Non Trade barriers * Logistics/High Transportation costs Prevention of Trade restrictions * Kava Issue: imposed by some EU countries-provide a grave shadow of doubt over the safety and efficacy of Pacific Kava-despite clearance of the traditional kava drink as safe by WHO and numerous scientific studies; * Other Pacific Products at risk-noni • Product and Market Development- Capital Intensive * Market research * Product development/launch * Scientific Research HIGH COST OF FINANCE/INVESTMENT CAPITAL * Accessibility for new project funding-difficult * Accessibility to investment funding/partners-difficult TECHNICAL Quality control standards in process of implementation-needs resources and capacity building to establish, implement and monitor High Capital cost for testing facilities and sustainability SUPPLY CAPACITY SMALL VOLUME USE= HIGH COST RAW MATERIALS

OPPORTUNITIES * LOCAL AND EXPORT MARKETS New product and market development opportunities-Gi; fair trade, organic certification; IP; niche marketing; branding Development funding opportunities for Local value added chain-key to enhancing competitiveness and export potential (such as IACT/SPC; ACP/EU MTIS; Private Sector development funding-such as AUSAID; NZAID; UNDP) USE OF LOCAL ABUNDANT RESOURCE-LAND LABOURCOTTAGE INDUSTRY DEVELOPMENT-for niche marketing of GI registered product, kava bars; etc ENVIRONMENT PROTECTION OPPORTUNITIES (high return /yield means reduced requirements of acreage for commercial agriculture and exploitation) INVESTENT OPPORTUNITIES-FOR FURTHER VALUE ADDED ; PRODUCTION AND MARKET DEVELOPMENT-for instance-new products for Asian and EU countries

SOME PACIFIC PRODUCTS WITH OPPORTUNITIES -FOR THE EU MARKET MARINE/SEAFOOD SUGAR WOOD PRODUCTS NONU/NONI PRODUCTS COCOA/COCONUT KAVA /HERBS AND NATURAL PRODUCTS VANILLA/SPICES HANDICRAFTS/ARTS & CRAFTS/CULTURAL GARMENTS

INCENTIVES FOR INCREASED TRADE BETWEEN THE PACIFIC & EUROPE-WIN-SITUATION • • INCREASED TRADE (REDUCE TRADE IMBALANCE)-FOSTER GOODWILL SUSTAINABILITY AND ENHANCEMENT OF COMPETITIVENESS OF PACIFIC PRIVATE SECTOR REDUCTION EU AID ASSISTANCE TO PACIFIC LONG TERM JOB CREATION FOR PACIFIC AND EU COMMUNITIES ENHANCE GENDER BALANCE-IN TRADE AND SOCIOECONOMIC DEVELOPMENT INCREASE EXPORTS FROM EU TO PACIFIC (two way trade-e. g. equipment/machinery/technical) INCREASE INVESTMENT

RECOMMENDATIONS EU/ACP TECHNICAL ASSISTANCE COULD GO FURTHER TO ASSIST THE PACIFIC PRIVATE SECTOR TO SWIM AGAINST THE TIDE PRODUCT AND MARKET DEVELOPMENT/EXPLORATION TARGETING THE EU AND OTHER MARKETS Success example-Japanese technical support for PIC exports to Japan (Jetro-e. g. recent PIC Exhibition in Tokyo, May 2012)-ROLE MODEL? ? REGULAR PACIFIC TRADE EXHIBITIONS and business matchmaking IN EU ACP-EU PRIVATE SECTOR SUPPORT-CDE/ETC INCREASE INVESTMENT AND ENHANCE PRIVATE SECTOR ACCESS TO FINANCE AND INVESTMENT CAPITAL -EIB; ETC TECHNICAL KNOW-HOW/TRANSFER KNOWLEDGECDE/PROINVEST/TRADECOM/ACP-EU MTIS/IACT LOCAL SUPPLY CAPACITY BUILDING –IACT/SPC

CONCLUSION “to swim or not to swim” “give us trade-not aid” (Ratu Mara) CONCLUSION PRIVATE SECTOR-WANTS TO SWIM-IN ORDER TO SURVIVENEEDS: MARKET ACCESS TO CAPITAL & TECHNICAL KNOWHOW LONG TERM-NO MORE HAND OUTS/AID MONEY “Only when the tide goes out do you discover who's been swimming naked” (i. e. current trade imbalance between the Pacific & EU) Warren Buffett quote