Economy of Oceania


The economy of Oceania comprises more than 14 separate countries and their associated economies.
On a total scale Oceania has approximately 34,700,201 inhabitants who are spread among 30,000 islands in the South Pacific bordered between Asia and the Americas. This region has a diverse mix of economies from the highly developed and globally competitive financial market of Australia to the much less developed economies that belong to many of its island neighbours. New Zealand is the only other developed country in the region, although the economy of Australia is by far the largest and most dominant economy in the region and one of the largest in the world.

Regional variation

to be completed

Trade blocs

The smallest Pacific nations rely on trade with Australia, New Zealand and the United States for exporting goods and for accessing other products.
Australia and New Zealand's trading arrangements are known as Closer Economic Relations. Australia and New Zealand, along with other countries, are members of Asia-Pacific Economic Cooperation and the East Asia Summit, which may become trade blocs in the future particularly EAS.

Currency

The below table summarizes the official currencies of Oceania. Several territories are dollarized or use a currency with a fixed exchange rate.
CountryCurrencyCentral bankNotes
Australian DollarReserve Bank of Australia
'New Zealand DollarReserve Bank of New ZealandDollarized
Fiji DollarReserve Bank of Fiji
'Pacific FrancInstitut d'émission d'Outre-MerCurrency union, pegged to Euro
Australian DollarReserve Bank of AustraliaDollarized
US DollarFederal ReserveDollarized
US DollarFederal ReserveDollarized
Australian DollarReserve Bank of AustraliaDollarized
'Pacific FrancInstitut d'émission d'Outre-MerCurrency union, pegged to Euro
New Zealand DollarReserve Bank of New Zealand
'New Zealand DollarReserve Bank of New ZealandDollarized
US DollarFederal ReserveDollarized
KinaBank of Papua New Guinea
TalaCentral Bank of Samoa
Solomon Islands dollarCentral Bank of Solomon Islands
'New Zealand DollarReserve Bank of New ZealandDollarized
Pa'angaNational Reserve Bank of TongaPegged to currency basket
Australian DollarReserve Bank of AustraliaDollarized
VatuReserve Bank of Vanuatu
'Pacific FrancInstitut d'émission d'Outre-MerCurrency union, pegged to Euro

Economic sectors

Service industry

The overwhelming majority of people living in the Pacific islands work in the service industry which includes tourism, education and financial services. Oceania's largest export markets include Japan, China, the United States and South Korea. The majority of people living in Australia and to a lesser extent, New Zealand work in mining, electrical and manufacturing sectors also.

Manufacturing

The manufacturing of clothing is a major industry in some parts of the Pacific, especially Fiji, although this is decreasing.
Australia boasts the largest amount of manufacturing in the region. Producing cars, electrical equipment, machinery and clothes.

Tourism

Tourism has become a large source of income for many in the Pacific; tourists come from Australia, New Zealand, Japan, the United Kingdom and the United States. Fiji currently draws almost half a million tourists each year; more than a quarter from Australia. This contributes $1 billion or more since 1995 to Fiji's economy but the Government of Fiji islands underestimate these figures due to invisible economy inside tourism industry.

Agriculture and fishing

Agriculture and natural resources constitutes only 5% to 10% of Oceania's total jobs, but contributes substantially to export performance. The most populous two nations, Australia and New Zealand, are also the most developed and have majority service industries. This dilutes the data from the less developed Pacific Island nations who have major agricultural economies. Most of the Pacific countries the primary industry is agriculture. Many nations are still quintessentially agricultural; for example, 80% of the population of Vanuatu and 70% of the population of Fiji works in agriculture. The main produce from the pacific is copra or coconut, but timber, beef, palm oil, cocoa, sugar and ginger are also commonly grown across the tropics of the Pacific. Fishing provides a major industry for many of the smaller nations in the Pacific, although many fishing areas are exploited by other larger countries, namely Japan. Natural Resources, such as lead, zinc, nickel and gold, are mined in Australia and the Solomon Islands. Oceania's largest export markets include Japan, China, the United States, India, South Korea and the European Union.

International aid and charity

Oceanian donor nations

Oceania's most populous nations, Australia and New Zealand, are both highly developed nations and are large international aid donors. These two wealthy nations share the region with less developed nations which still rely on foreign aid for development. In the 2007/08 financial year Australia provided $3.155 billion worth of official development assistance, of which $2.731 billion will be managed by AusAID. Every week, each Australian puts in around $2.40 to pay for Australia's aid program, amounting to around 1% of the Australian Federal Government expenditure compared to the 42% spent on social security and welfare.

Oceanian recipient states

In the Solomon Islands 50% of government spending is paid for by international donors; namely Australia, New Zealand, the European Union, Japan and the Republic of China.

Global trade relations

This region consists of many trading relations because of the small amount of land and limited resources they have. Many have trading economies and are transitioning to a developed economy and infrastructure.