Tomas Martin Ernst's blog

I've just returned from country Australia evaluating the impact of one of the World Bank's (WB) recent development programs in the region. A WB initiative on the ground in Australia? What is the relationship between country Australia and the Bank's mandate of a world free of poverty?

Photo © Tomas Ernst/World Bank

Following several year's of research and advocacy, the Australian government opened its borders this year to the short-term supply of labour from the Pacific Islands (PIs). Evidence from New Zealand showed that when temporary labour mobility programs are well managed - with the appropriate level of monitoring to prevent worker exploitation and with the right incentives to minimize overstaying - the scheme is win-win for growers and PI workers. Growers enjoy a steady, reliable source of labour and PI workers receive income at least 4-5 times the GDP/capita of their home country.

My colleague Nathan and I travelled to Griffith, New South Wales where six ni-Vanuatu workers were preparing to head home following a six-month assignment picking, pruning and packing fruit. All workers reported a significantly improved financial position, with the majority sending regular remittances to their family members and local villages. In terms of skills acquisition, the training workers received on farms in Australia will benefit them when they return home to agriculture dependant economies of the South Pacific.

Pacific Islanders have long faced limited choices and exorbitant fees when transferring money to families and friends. Following numerous focus groups and two high-level public-private stakeholder dialogues convened by the World Bank in Sydney, an inter-governmental body was established in Wellington to address the high costs of remittances in the Pacific. It was tasked with identifying public policy solutions and coordinating actions with New Zealand's financial industry.

Close collaboration between the NZ Ministry of Justice and Police, Reserve Bank of NZ, NZAID, the Ministry of Pacific Island Affairs and the World Bank brought forward a progressive change in domestic regulation, with NZ Parliamentarians approving a modification to the Financial Transactions Reporting Act. The response from industry was immediate. Westpac, a major commercial bank in the Pacific region, in partnership with VISA International, launched a low-cost, prepaid card (Westpac Express VISA Card) on December 1st in Auckland. It will significantly reduce the costs of sending money from the current level of 15 to 40 percent down to 3 to 4 percent!!