“Last year at this time, Palau was looking toward a growing economy and stability,” he said, adding that the tiny island nation had been planning to host the Our Ocean conference on international marine conservation.
That’s all changed.
Palau’s economy is set to shrink by 11.4 percent in 2020, according to the International Monetary Fund — well beyond twice the percentage decline expected in the United States. The conference, once scheduled for this month, has been pushed back a year.
To keep the government running and people employed, Palau has had to take out burdensome loans. “For our small economy, it’s huge,” he said. “And it’s something that we will have to pay for a long time.”
Palau, which is spread over hundreds of islands 500 miles east of the Philippines, has a population of about 18,000 — smaller than that of many U.S. towns. The archipelago’s isolation has conferred obvious benefits during a pandemic spread by travel and interaction.
But it has also been a weakness for Palau and others places in the region. 2020 has been a year of soul searching for countries across the Pacific, home to almost all of the remaining virus-free nations, blessed and cursed by geography.
Some Pacific island nations are leaning into their isolation as the pandemic rages, looking to family farming and even cash-free bartering systems to survive the downturn. Others, like Palau, are wondering if they need to push in a new direction.
“We have to understand that we are an island,” Whipps said. “We can’t survive on our own.”
Virus-free, but vulnerable
Tourism helped Palau become one of the wealthiest Pacific island countries. It was so confident in its trajectory that it banned fishing in most of its waters last year, citing conservation concerns.
But the tourism revenue dried up across the Pacific this year. IMF estimates suggest that Fiji, an island nation that has recorded just 44 cases, will see its economic output fall by 21 percent in 2020 — a decline rivaled only by troubled countries such as Libya and Venezuela.
The list of countries without recorded covid-19 cases is short. Claims by larger, authoritarian nations — North Korea and Turkmenistan — are viewed with deep skepticism. Small, remote Pacific island nations such as Palau, a former U.S. trust territory, make up most of the list.
As the virus began to spread, Pacific islands with limited medical infrastructure knew that if it hit, it would hit hard. “In Vanuatu, they had two ventilators before this,” in a country of more than 290,000 people, said Tess Newton Cain, a Pacific analyst at Griffith University in Australia.
Last year, Samoa saw scores of cases of measles, a fast-spreading virus preventable with a vaccine. The outbreak overwhelmed the country’s health-care system, leading to the deaths of more than 80 people, many of them young.
Some Pacific islands went into preemptive lockdown. By March, Micronesia had installed what one observer called the “most drastic anti-coronavirus travel ban in the world.”
“On this occasion, the geography and the limited flights into the islands have helped,” said Colin Tukuitonga, former director general of the Pacific Community.
Acceptance of border closures and lockdowns grew. But as the pandemic raged on, resorts were forced to close down and fire employees. Remittances sent home from workers abroad declined, cutting a major revenue source.
During a remote appearance at the U.N. General Assembly in September, Palau’s outgoing President Tommy E. Remengesau Jr. (and Whipps’s brother-in-law — it’s a small country) said life in the archipelago had changed.
“A national economy is not money. It is the system that determines quality of life,” he said. “It is food on the table.”
Recorded coronavirus cases
Papua New Guinea
Case numbers taken from World Health Organization database on Dec. 10, for Pacific island counties included in October’s IMF Economic Outlet.
Tuatagaloa Annandale, a hotelier and village chief of Poutasi in Samoa, said some who lost economic opportunities have turned to alcohol. “What do people do when they’re frustrated, they’re angry? They have a few beers,” Annandale said. “And you have a problem.”
The United Nations said in July that it has seen dramatic increases in calls to domestic-violence crisis centers, with requests at one center in Fiji surging by 500 percent in two months.
What the future holds
For some, the pandemic prompted a return to traditional economic practices. In Fiji and Samoa, the government distributed seeds so that people could grow their own food, to eat or trade via informal barter systems.
The measures were a relative success. Regina Scheyvens, co-author of a study on the practice, said her research showed that these systems could serve as a “social and economic safety net.”
Most Pacific islands cannot remain cut off indefinitely. The number of virus-free nations has dwindled as countries repatriated nationals and tried to resume trade. “There’s a certain inevitability about it all,” said Tukuitonga.
Unlike other regions, Pacific islands are not expecting a quick economic rebound. Both Palau and Samoa may see their economies shrink more next year than they did in 2020, according to the Asian Development Bank.
International ties will also be vital for vaccination programs. Because of its historical ties to Washington, Palau is expecting to receive doses from the U.S. rollout, although the remoteness of the island nation will make vaccines that require cold-chain storage unsuitable, Whipps said.
The pandemic is only the latest reminder that the actions of countries far away can wash up on island shores. Climate change remains an existential threat for many Pacific island nations. Amid the pandemic, Fiji has needed to rehouse families because of erosion from climate change.
The coronavirus has only made the problem more urgent. “The talk of global action may have slowed down, but impacts being felt in the Pacific haven’t gone away,” Newton Cain said.
In the long term, Whipps said he hopes to strengthen ties with Palau’s most important allies, in Washington and Taipei. There’s already talk of opening a travel bubble with Taiwan next year. But Whipps argued that the pandemic shows that tourism alone is not the answer.
Palau has reached out to the United States to ask if the islands could host a military facility. A new undersea fiber-optic cable might allow the country to become a financial hub for firms fleeing Hong Kong, Whipps said. A million tourists or new luxury hotels may sound appealing, he added, “but is that sustainable? Is that going to help us in the long run?”