IMF Working Papers

Growth Strategies and Diversification in the Pacific Islands Countries

By Gabriela Cugat

June 13, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Gabriela Cugat. "Growth Strategies and Diversification in the Pacific Islands Countries", IMF Working Papers 2025, 111 (2025), accessed June 14, 2025, https://doi.org/10.5089/9798229013437.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We examine growth strategies for the Pacific Island Countries (PICs) focusing on the role of tourism and diversification. First, we quantify the contribution of tourism to growth using panel regressions and we compute how much additional tourism would be needed for PICs to sustain comparators’ growth rates. Given the sizable scaling ups in tourism required, we consider the benefits of an alternative growth strategy based on diversification. We identify diversification episodes in the PICs and quantify their benefits using the synthetic control method. Such episodes have had mixed results for PICs. Finally, we outline a framework for designing growth strategies in the PICs, based on diagnosing the binding constraints to their economic expansion and working around these limitations.

Subject: Economic sectors, Environment, Export diversification, Exports, Imports, International trade, Natural disasters, Tourism

Keywords: Diversification, Export diversification, Exports, Growth, Imports, Natural disasters, Pacific Islands, Pacific Islands countries, Tourism, Tourism

Publication Details

You May Also Be Interested In...

Honduras: Third Reviews Under the Extended Fund Facility and the Extended Credit Facility Arrangements, and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Honduras

June 13, 2025

What is Needed for Convergence? The Role of Capital and Finance

June 13, 2025

Policies to Achieve Spain’s Climate Objectives: Spain

June 13, 2025

Dominica: 2025 Article IV Consultation-Press Release; and Staff Report

June 12, 2025