Alfred Tora

I recently came across a macro-economic outlook report by senior Pacific economist, Dr. Kishti Sen, about how smaller Pacific economies are chasing stronger and longer-lasting growth. I’m not going to pretend I’m an economic expert and that I understand macro or micro economics on a level that would make me an expert but I found this outlook quite interesting and thought I’d review this from a business psychology aspect and see what the future looks like.

Full disclaimer, I couldn’t find a publicly accessible version of the report so you’ll have to take my word for it…and Sen’s.

I was especially interested because the gist of Sen’s report was on how these countries were trying to reduce their dependence on International Tourism and how slower-growth options would have economic consequences.

What would these strategies impact the work force within these different ocean states? What would the future of work look like? How could newcomers (graduates into blue collar and white collar jobs) prepare better before entering the work force? How to plan strategically for the future of work in the Pacific?

These were some of the questions I felt I needed to answer after reading the report. This is my take of the report with a focus on individual countries and what their workforce should expect.

Regional Theme: Diversification + Infrastructure-led Growth

• Small Pacific island economies are trying desperately to diversify away from international tourism. This is most likely in response to the COVID-19 pandemic crash that hit most of these countries pretty hard.
• The transition to a mixed and more resilient economies is slow due to two factors: limited fiscal space (not enough room in the government budget); and deb/disaster recovery costs.
• The infrastructure fundings that development partners provide

Country Highlights

Cook Islands

• Tourism = ~80% of GDP impact.
• Visitor numbers hit a new record in 2025.
• Debate: How much tourism is sustainable?

Growth strong short-term, but plateau expected until capacity expands.

 Kiribati

• Economy relies on:
  • Fishing/agriculture
  • Public sector
  • Remittances
• Infrastructure construction drives GDP spikes.
• Growth expected to slow once projects finish.
• Fishing revenue improvements may support spending.

Samoa

• Growth slowed in 2025 due to weather-hit agriculture/fishing.
• Remittances rising strongly (seasonal work overseas).
• Events + new infrastructure projects expected to boost growth from 2026 onward.

Solomon Islands

• More diversified than many Pacific economies.
• Strong in agriculture, forestry, fishing, manufacturing, mining.
• Infrastructure gaps currently limit productivity.

Investment pipeline expected to unlock 4–5% long-term growth.

Timor-Leste

• Young nation pursuing major energy-led development.
• Greater Sunrise gas project could transform economy.
• Heavy reliance on consumption today.
• Digital infrastructure + overseas employment supporting growth.
• Strong medium-term outlook if energy project proceeds.

Tonga

• Economy heavily supported by remittances (~40% of GDP).
• Renewable energy investment underway (TREP).
• Goal: 70% renewable electricity by 2030.
• Steady moderate growth expected.

Vanuatu

• Recovering strongly from shocks (pandemic + earthquake).
• Plans to diversify into:
  • Retirement living
  • Offshore business processing
  • Education/training services
• Reconstruction + tourism + exports supporting growth.

Fiji

• Wants sustained 5–6% growth, but:
  • Near-term growth slowing.
• Tourism and consumer demand stabilising.

New industries + expanded tourism capacity expected to lift growth from 2028.

My Perspective

1. Current Leadership Mindset needs to Change

Across regional economies are historically structured around one dominant industry (tourism/resources/export) and external inflows via aid and remittances.

This has been the “system” that has calcified over the years. It has outlasted governments and starry-eyed social change makers. This is simply “how things are”. Governments depend on short-term fixes to stay in the good graces of the public and this usually means sticking to the status quo—continuing to focus on the dominant industry (mostly due to sentiment than logic) and ensuring that foreign aid, development funds, and remittances continue to come in.

A glaring example of the “one-dominant industry” system this can be seen with Fiji and its “sweet” baby that is the Sugar Industry. The proverbial “beating a dead horse” situation that leaves the common man, outside of the industry, scratching his head wondering we’re continuing to pump money into this bloated carcass that once was the prized pig. The economics doesn’t make sense, so why do it? Because this industry was once the backbone of the economy but, most importantly, because of the large voter base that are associated with it.

Is tourism also becoming a crutch?

There is a emerging leadership shift that I hope continues to pick up steam throughout the region. Young leaders are now focusing on resilience, diversification, and utilizing infrastructure as the foundation for capacity-building.

Psychologically, this reflects a move from short-term survival leadership that focuses on pleasing the masses to long-term systems-building leadership that ensures sustainable gains.

This transition, however, can be difficult because the benefits—the default KPI that governments live and die by—are delayed; the costs are immediate; and the political cycles reward visible quick wins.

2. The Dependency Culture Risk

The region relies heavily on external actors that come in the form of foreign aid agencies, international development project teams, and remittances. These repeated signals create a culture of dependency, dulling the senses and limiting self-reliance at a national and regional level.

The Pacific now lives in a world that signals that:

• Development partners fund infrastructure
• Labour migration sustains household income
• Commodity or tourism demand are largely external

If we don’t get funding from foreign actors, we can’t build bridges or roads. We can only survive if one of our household gets a PALM scheme work visa. The tourism industry should only cater to external tourists.

Is that what we’re saying? Do we really believe this? Unfortunately, this is the lived reality today.

We are acted upon rather than actors.

We have become reactive, passive, and controlled.

This mindset runs the risk of:

• External locus of control at national/institutional level: We begin to believe that we have no control at an individual, national, and institutional level.
• Reduced urgency for internal productivity reforms: We get lulled into a false sense of security, thinking that we don’t need to work as hard.
• Policy framed around attracting flows rather than building capability: National and regional policies continue to focus on bringing more external funding into the region and countries rather than building internal capabilities.

In contrast to these passive approaches, we need to build capability in:

• Governance Execution: Operating, implementing, and enforcing national and regional policies.
• Workforce Skills: Creating skilled workers in all industries.
• Innovation Ecosystems: Building ecosystems that promote innovation in business and tech.
• Private Sector Scaling: Encouraging healthy business growth that would support the economy from within.

 3. Infrastructure-first Strategy Insufficient

Most countries in the region are relying on building infrastructure with the expectation the economic growth will follow. From an organizational systems perspective, infrastructure alone rarely delivers transformation unless paired with:

• skills pipelines
• regulatory reform
• institutional coordination
• private-sector incentives
• talent retention

Otherwise, projects produce temporary construction booms before growth fades after completion, such as the case in Kiribati.

This is a pattern that appears in Sen’s report.

4. Workforce Psychology: Migration as Economic Stabilizer

Remittances and seasonal work schemes are central for:

• Samoa
• Tonga
• Kiribati
• Timor-Leste

The positive effects of this includes:

• Household financial stability
• Consumption support
• Reduced unemployment pressure

Psychological/system risks:

• Brain drain or skill leakage
• Domestic labour shortages
• Youth aspirations tied to leaving, not building local industries
• Reduced pressure on domestic job creation

In the long-term this shapes the national and regional identity around exporting workers instead of exporting productivity.

5. Sustainability Tension: Growth vs Identity

Cook Islands illustrates a classic organizational dilemma where they want more tourism revenue BUT also want to maintain a boutique, nature-based, culturally-aligned tourism sector.

This becomes a question of strategic identity when talking about economic planning. In my opinion this requires:

• Strong stakeholder alignment
• Clear national narrative
• Consistent policy signals
• Limits-based growth strategy

Without the above, the system threatens to drift toward overcrowding, brand dilution, and local resentment.

This case clearly highlights the need for systems thinking to be implemented in order to strike a balance between sustainability and growth.

6. Long-term Success depends on Institutional Coordination

Across all countries, growth depends on alignment between:

• government policy
• infrastructure planning
• workforce development
• private investment
• environmental sustainability

Business psychology research shows that performance improves not from individual policies, but through coherence between systems.

Many Pacific economies face challenges in:

• cross-ministry coordination
• project execution continuity
• monitoring outcomes vs announcing projects