Stretching across vast distances of ocean, the Pacific is home to some of the world’s most geographically dispersed countries. That geography can make data collection a challenge. Yet, after more than a decade, 17 Pacific Islands’ economies are once again coming together to participate in the International Comparison Program (ICP), bringing the region back into the global statistics that help measure poverty, living standards and economic performance.
The ICP produces Purchasing Power Parities (PPPs), which allow to compare what people can buy in different countries by accounting for differences in prices, rather than exchange rates. The cost of a bag of rice, a bus ride, or an appointment with the doctor will vary in each country. Identifying those differences is part of the work done by the ICP, led by the Development Data Group, the World Bank Group’s development data hub, through the coordination of internationally comparable price surveys and the compilation of detailed GDP expenditure data from more than 175 countries.
The Pacific Islands last participated in the ICP in 2011. Their return marks the culmination of a long-standing effort by Pacific Islands countries and territories to rejoin, led by the Pacific Community (SPC) in partnership with the World Bank Group’s ICP and the Asian Development Bank (ADB). The effort has been supported through financing from the World Bank Group’s International Development Association (IDA) under the Statistical Innovation and Capacity Building in the Pacific Islands (PACSTAT) project.
Since 2011, PPPs for these economies have been extrapolated using available economic data. While these extrapolations can provide reasonable short-term estimates, their reliability declines as more time passes, making periodic benchmark PPPs based on direct data collection essential.
Over the past 15 years, the importance of PPPs has expanded considerably. They underpin Sustainable Development Goals (SDGs) monitoring, global poverty measurement, and a wide range of applications and indicators used by the World Bank Group, the International Monetary Fund (IMF), and the United Nations, while also supporting policy analysis and research worldwide. The participation of the Pacific Islands in the ICP will ensure that these economies are represented through direct measurement, rather than relying solely on extrapolations.
