The Pacific Islands are playing an increasingly pivotal geopolitical role on the international stage yet their far-smaller economic significance means they can get lost in the vastness of the region’s financial might.
"Right now in the Pacific there is a huge sense of optimism about the future.”
Australia’s renewed attention to the Pacific is a positive development for the region. Right now in the Pacific there is a huge sense of optimism about the future – and with good reason.
In 2018, Australia’s International Business Survey followed 713 businesses, 629 of which were actively undertaking international business activities. Businesses which were not trading internationally were primarily focused on scaling-up domestically or felt they currently lacked the leads or contacts to explore international opportunities – this is where the Pacific comes in.
Don’t do it alone
To many, the Pacific Islands are a holiday destination but that overlooks the countless business opportunities that exist in their own right or as part of that tourism sector. While these opportunities may not be large by world standards, they are still attractive to businesses seeking to diversify or expand into new markets and grow internationally.
As with any overseas expansion, it’s important to have partners who understand the business and regulatory landscape of this diverse region. Each Pacific Island country is a sovereign nation with its own laws and regulations. It is essential that businesses seek good tax, legal and banking advice from experts with knowledge and experience of local conditions.
In today's fast-paced environment, particularly in a region of such diversity, a "do-it-alone" approach simply won’t work.
It may make sense to test the waters first with a market entry strategy that does not require a physical presence – for example through ecommerce or using a local agent.
Forming joint ventures with local businesses may also provide benefits in both directions – local businesses get the ability to access the wider expertise and resources of their Australian partner, Australian companies gain entry into the market and the invaluable benefit of local knowledge and connections.
Deciding their own future
Another emerging opportunity from Australia's International Business Survey was the use of new technologies and online platforms to drive export sales.
Digital innovation is providing an unprecedented opportunity to fast-track economic and social development in the Pacific Islands.
Harnessing the strengths and abilities of local partners is one of the most strategic ways for Australian businesses to succeed in the Pacific.
I think this is a trend we will begin to see more of, as Australians see how smart and capable Pacific Islanders are, and realise they are increasingly looking to decide their country’s own future, rather than having to rely on foreign aid or foreign businesses to help.
The Pacific Islands may be made up of smaller, isolated economies without access to global platforms but with the right long-term outlook, the right investment, the right infrastructure and the right institutional and governance environment, there is an enormous opportunity.
Tessa Price is Regional Executive for Pacific Islands at ANZ
This article is an edited version of a speech presented by Tessa Price to the Australian-Pacific Business Council Networking Series