The guest worker plan will give Pacific islanders much-needed income.

EXTRAVAGANCE aside, some might say that the Olympic Games have crystallised the sense that the world is just a big village, with its chiefs and its paupers. The opening ceremony was dominated by hordes of Australians, Americans and Chinese, punctuated by nations such as Fiji and Kiribati proudly waving flags carried by a handful of athletes. This was the beginning, and perhaps the end, of the "village" feel.

If the world is a village, then the people of the Pacific islands are living across the road from the rich people in Australia. And our neighbours are doing it tough: the Pacific region includes some of the world's poorest nations.

Australian aid has worked to rectify this situation by strengthening governance and the institutions of state, and through attempts to improve national economic performance. In the case of the Solomon Islands and Bougainville, Australia has also played a key role in halting civil conflicts. Today the Prime Minister flies to the Pacific Island Forum in Niue, where he will discuss recent plans for a new pilot scheme for "unskilled" guest workers from the Pacific islands.

The Government has announced this initiative after extensive lobbying by the National Farmers Federation — the scheme will tackle critical agricultural labour shortages by allowing Pacific islanders to work temporarily in Australian horticulture. Through the remittances that will be sent home to Pacific communities, this scheme also has the potential to help lift households out of poverty.

Many Pacific islanders live subsistence or semi-subsistence lives on the margins of the cash economy in countries in which fees must be paid even for primary school and basic medical attention. Apart from those with jobs in large government or private sector enterprises, most do not have a regular cash income.

Many imagine that the Pacific peoples live in a benign environment in which food is plentiful and malnutrition unknown. Unfortunately, this notion is far from the truth. Significant regions of the Solomons, for example, suffer seasonal food shortages. The lives of people at regular risk of food shortages are precarious. Many islanders are forced to divert cash intended for compulsory school fees or other basic expenditure to pay for essential food. Unemployment and food shortages coupled with a user-pays system for essential services are a recipe for high vulnerability, especially in the face of natural disaster.

Preoccupied with simply surviving, households in these circumstances are unlikely to be part of the development process. Part of Australia's engagement with the Pacific should be to promote resilience and greater opportunities for people who live subsistence or semi-subsistence lives, thereby improving local self-reliance and their prospects.

The situation of most Pacific subsistence farmers, with no tradeable assets or government support, is often insecure. Off-farm, cash-based employment can help insulate households from local conditions, enabling them to plan for the future.

A relatively simple way of providing cash-based employment is through programs in which people from the Pacific work temporarily in Australia. Properly regulated, such a labour mobility scheme offers an important leg-up for Pacific communities.

A labour mobility scheme can tackle present and future labour shortages in Australian agriculture and provide an important cash income to island communities. Remittances can be beneficial in reducing poverty and increasing resilience to natural events such as floods, cyclones, droughts and crop disease.

A labour mobility scheme can strengthen diplomatic ties between Australia and Pacific nations, as well as bring about change and opportunity for the Pacific communities from which these workers would come. As Kevin Rudd discusses inviting guest workers from Kiribati, Tonga, Vanuatu and Papua New Guinea, he could also reflect on the broader security advantages for Australia. Perhaps even more important is the difficult reality that it may be the only short-term way to improve the lives of many Pacific Islanders.

This is as an opportunity to build positive, constructive relationships with our regional neighbours.

Andreana Reale and John Handmer work at the Centre for Risk and Community Safety at RMIT University.

Originally published as  "Australia can help the neighbourhood",  Andreana Reale and John Handmer,  August 19, 2008 http://www.theage.com.au/opinion/australia-can-help-the-neighbourhood-20080818-3xnb.html?page=-1