Pacific islands 'need reform not cash aid'

All Pacific islands can achieve higher standards of living within a generation but must rely less on foreign aid, says an Australian academic.

Professor Helen Hughes, of the Centre for Independent Studies, says in her The Pacific is Viable report, released today, that the policy measures needed to make every island viable are well-known.

They include abandoning communal land ownership, eliminating protectionist measures, freeing up labour markets and privatising the public sector.

She says $1.5 billion a year of aid cushions the effects of stagnation and leads to state inaction.

Professor Hughes created a furore last year when she suggested Australia should suspend aid because it was fuelling corruption and turning islands into economic basket-cases.

"Stagnation, poverty and descent into crime and conflict are not inevitable but the result of Pacific governments' policy choices and the implicit support of aid for those choices," she said.

In her report, Professor Hughes argues that all islands can improve if they adopt policies that match their endowments.

She says the report provides a plan for development and dismisses the "litany of excuses" used by states and aid agencies to support the view that the Pacific cannot support itself.

But Professor Hughes says the region " needs radical reform of governments and economies "before policing and law can bring a new morality to public and civil life".

Aid and trade partners can help by supporting agricultural productivity and job creation.

Professor Hughes says aid should cease to be a prop for governments unwilling to change.

"The danger Australia faces if the Pacific does not grow is a flood of illegal immigrants fleeing homelands."