The biggest country, Papua New Guinea, sees salvation in a $16 billion Exxon-Mobil liquefied natural gas project, which will instantly double its GDP when it starts up in 2014. A new gold mine in the Solomons will pull in 1000 workers, and the relocation of US forces to Guam many thousands more.

But the boost to gross national product, what is left after the foreign gas companies, for example, take their revenues, will be much less. And after construction, employment would contract to several hundred operators, with 60,000 local land-owners receiving some rent.

The PNG Government will receive a billion-dollar, or 25 per cent, revenue boost. But as the latest Pacific Economic Bulletin points out, it splurged revenues of the last big resource projects in the early 1990s without raising general income and welfare. It may be already spending the gas revenues before they start arriving.

So what to offer the many thousands of young people reaching working age each year? Two radical notions emerged this week to shift our thinking.

One came from an engaging museum director-turned-MP from Vanuatu, Ralph Regenvanu.

At a Lowy Institute forum in Brisbane he said Vanuatu’s 220,000 people had been largely unaffected by the global financial crisis – because they did not belong to the modern economy. About 80 per cent live in the traditional village economy, while even the rest – including his Port Vila constituents – rely on tradition and kinship for food, work exchanges and dispute settlement.

The traditional economies in PNG, the Solomons and Vanuatu had expanded to cope with some of the highest population growth anywhere, and provided food and shelter (if not modern medicines to fight malaria) where the modern economy collapsed altogether, as in Bougainville during its civil war.

”We must make deliberate efforts to maintain the traditional economy where it exists in the Pacific and ensure that it remains as our buffer in the uncertain global economy into the future,” Regenvanu said. It had to be somehow entered into economic statistics, and its supports like traditional land tenure maintained.

That’s a touchy last point in Vanuatu, where a controversial lease system has already separated strips of coastal land for villa developments sold to fly-in sea-changers and holiday-makers from Australia and other rich countries.

More generally, neo-conservative economists argue a precondition for fast (modern-sector) growth is sweeping aside hazy traditional land ownership systems in favour of registered, transferable individual ownership.

Regenvanu, to critics who accuse him of a ”romantic” view of the capacity of villages to cope with the population explosion, retorts: ”The traditional economy has so far absorbed a 90 per cent growth in population since 1980 in Vanuatu. Perhaps it is romantic to think the cash economy is even capable of this.”

The other new thinking came in a World Bank study presented in Cairns, suggesting governments should not attempt to ”swim against the tide” by trying to spread economic activity to the region’s small and remote populations. Instead, they should work on ways to link its people to economic growth hubs through lower transport, telecommunications and banking costs and prepare them to handle high-paid jobs as migrant workers.

Already remittance flows from expatriates are greater than official development aid programs globally. In Tonga 91 per cent of families have remittances from members living overseas; in total they account for 55 per cent of the country’s GDP. It is one of the island nations that participates in New Zealand’s highly successful seasonal rural work scheme, which Australia began to follow last year with a small pilot.

Australia’s parliamentary secretary for foreign aid, Bob McMullan, said: ”That trial, which is sort of the tip of a bigger iceberg of labour mobility, is proceeding satisfactorily. But I think labour mobility is going to be about much more than just people coming in to pick fruit.”

McMullan launched a program that involved 90 young people from Kiribati moving to Brisbane for training as nurses. ”The expectation of both governments is that a significant number of these people will remain and work in Australia, sending remittances back to to Kiribati, while others will go home and work,” he said.

”That in some ways is a more important model of the way this labour mobility will work.”

McMullan admits it’s a sensitive subject for Australians, referring obliquely to the history of ”blackbirding” canefield labour from the Melanesian islands and policies of permanent migration. ”But we are moving in [the new] direction, and I think we are taking people with us.”

So far, most workers returning from New Zealand’s vineyards and orchards haven’t blown their savings on unhealthy food and consumer goods, but used it for education, improving their homes or starting small enterprises.

The village can also generate some cash – from cocoa, coffee, coconuts, kava and so on – more easily saved than wages from a menial job in a town where the worker has to pay for accommodation, clothing and food. But regionwide labour mobility can augment the village household with large lumps of capital in a short period.

As Regenvanu says: ”It is one of the best options for rural dwellers to make cash obligations such as school fees. You work for a limited period for a relatively large amount of money. This is in contrast to working for a long period in Port Vila for peanuts.”

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