The MIRAB Model of Small Island Economies in the Pacific and their Security Issues: Revised Version

The MIRAB model of Pacific island micro-economies was developed in the mid-1980s by the New Zealand economists, Bertram and Watters, and dominated the literature on the economics of small island nations and economies until alternative models were proposed two decades later. Nevertheless, it is still an influential theory. MIRAB is an acronym for migration (MI), remittance (R) and foreign aid (A) and the public bureaucracy (B); the main components of the MIRAB model. The nature of this model is explained and the importance of distinguishing between the two processes involved in it (one based on foreign aid and the other on overseas remittance) is emphasised. Evidence is given of the importance of migration and overseas remittance for the functioning of some Pacific island microstates, such as Tonga. Yet, it is argued that no single model adequately typifies the economic situations of Pacific microstates and micro-economies because of their diversity. Even economies that have been classified as MIRAB economies can be very different. The newer TOURAB, SITE and PROFIT models have similar limitations. In order to understand adequately the economic situation of Pacific island microstates (including their economic vulnerability, their sustainability, and political merchantabilities), it is necessary to adopt a more holistic approach which takes account of historical, cultural and environmental factors. This is illustrated by the case of Nauru.