## The Pacific Speed of Growth: How Fast Can It Be and What Determines It?

_IMF Working Papers, May 9, 2013_

## Source details

**Canonical URL:** [The Pacific Speed of Growth: How Fast Can It Be and What Determines It?](https://www.imf.org/en/publications/wp/issues/2016/12/31/the-pacific-speed-of-growth-how-fast-can-it-be-and-what-determines-it-40521)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/the-pacific-speed-of-growth-how-fast-can-it-be-and-what-determines-it-40521/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/the-pacific-speed-of-growth-how-fast-can-it-be-and-what-determines-it-40521/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/the-pacific-speed-of-growth-how-fast-can-it-be-and-what-determines-it-40521/bundle-manifest.json)

## Bibliographic details
- Authors: Yongzheng Yang, Hong Chen, Shiu raj Singh, Baljeet Singh
- Published: May 9, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484399040.001

---

### Executive summary and research question
- Objective: Test within a relatively homogeneous group of small states what differentiates the growth performance of Pacific island countries (PICs) from their peers.
- Core conclusion: Geography-related disadvantages and policy-related factors have resulted in growth rates in PICs that are much lower than in other small states.

### Key empirical findings
- Geography and distance:
  - PICs are disadvantaged by distance compared with other small island states.
  - Rising international transport costs are examined as a contributor to slower growth over the past decade.
- Trade and external environment:
  - PICs are hampered by lower exports compared with other small island states.
  - Unfavorable developments in the external trade environment may have contributed to PICs’ slower growth over the past decade.
  - Real exchange rate appreciation is examined for its role in slower growth.
- Investment and domestic factors:
  - Lower investment in PICs relative to other small island states is identified as a drag on growth.
- Offsetting factors:
  - Greater political stability in PICs has helped offset some disadvantages.
  - Catch-up effects from lower initial incomes have supported growth.
  - Slower population growth in PICs has helped offset some geographic and policy disadvantages.

### Policy-relevant interpretation
- Net effect: Policy-related shortcomings, in combination with geography-related disadvantages, explain much of the slower growth performance in PICs relative to other small states.
- Areas for policy focus implied by the analysis:
  - Strengthen policies to raise investment levels.
  - Enhance export performance and resilience to adverse external trade developments.
  - Address vulnerabilities to transport-cost increases and remoteness (implicit policy leverage points include connectivity and trade facilitation).
  - Consider macroeconomic policies responsive to real exchange rate dynamics.

### Publication and metadata
- Authors: Yongzheng Yang, Hong Chen, Shiu raj Singh, Baljeet Singh
- Date: May 9, 2013
- Series: IMF Working Papers, Working Paper No. 2013/104
- Pages: 44
- DOI: https://doi.org/10.5089/9781484399040.001
- ISBN: 9781484399040
- ISSN: 1018-5941
- Subjects: Competition; Exports; Financial markets; Foreign exchange; Imports; International trade; National accounts; Real exchange rates; Transportation
- Keywords: aid; Asia and Pacific; Australia and New Zealand; Competition; convergence; economic recovery; Exports; financial crisis; Global; growth; growth performance; growth rebound; Imports; investment exports; Pacific island countries; Pacific Islands; PIC economy; PIC export; PIC government; PIC growth rebound; Real exchange rates; remoteness; small states; trade pattern; Transportation; visitor arrival; volatility; WP

*IMF Working Paper No. 2013/104 (May 9, 2013), Pages: 44, DOI: https://doi.org/10.5089/9781484399040.001, ISBN: 9781484399040, ISSN: 1018-5941.*

---

## Content in this bundle

- **_wp13104**
  - [_wp13104 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2013/_wp13104.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp13104 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2013/_wp13104.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-pacific-speed-of-growth-how-fast-can-it-be-and-what-determines-it-40521_