Digital technologies will continue to transform island life
One of the outcomes of the global financial crisis has been the all round fall in remittances. For many Pacific Islands nations – particularly in resource-poor Polynesia – remittances are the bedrock of the economy, in many cases being the single largest foreign exchange earner ahead of tourism receipts.<!--more-->
As island people living abroad face tougher times, with increasing costs of living coupled with loss or reduction in incomes, remittances have fallen markedly particularly in some countries like Tonga, which has had to rely on emergency handouts from world financial bodies.
But what has helped shore up remittances is the falling costs of sending money home. It is no longer as expensive as it used to be to send money home back to the islands from overseas as it used to be. This is because money transfer companies have a new unlikely competitor, they never probably expected – mobile phone networks.
Half a dozen new mobile money transfer services were launched this year around the Pacific Islands region encompassing services from New Zealand and Australia and this has driven down commission rates greatly. This has helped even out the fall in overall remittances to some extent.
A report published last week puts the Pacific Islands region as one of the most promising for the growth of region wide mobile financial transactions next year, after Africa, the Caribbean and South America – something which could never have been imagined even as little as two years ago.
The report says mobile financial transactions will go well beyond money transfers to include utility bill payments, casual payments across retail counters, besides other types of transactions. If this is extended across sub regions like Melanesia and Polynesia, it will lay the groundwork for better trade in goods and services intra-regionally, following on the steady growth in intra-regional investment already taking place in the Melanesian sub region.