CAIRNS, Australia, Aug. 6 (Xinhua) -- "Sea-locked" Pacific Island countries face unique development challenge of being located great distances from neighboring centers of economic activity, the chief economist and senior vice president of the World Bank said here Thursday.

    In an exclusive interview with Xinhua, Lin Yifu said the Pacific Islands Forum is an important regional organization in the pacific region and on behalf of the World Bank attending the Forum, he feels the responsibility to help those island nations to address to development challenges.

    Lin said that with limited access to world markets, these nations are hindered by low economic density, small markets, high production costs, growing populations and pressing employment needs.

    He said the average Pacific Island country is ranked 207 out of 218 countries in terms of population and distance measures, adding the remoteness poses a major challenge for the Pacific Islands and has hindered economic development.

    The World Bank launches Thursday a report named "Pacific Islands: Development" in 3D booklet. The report highlights that reshaping the regional economic geography through increased labor mobility is critical for long-term growth and poverty reduction in the region.

    With the South Pacific Regional Trade and Economic Cooperation Agreement, a nonreciprocal concessional trade agreement to Australia and New Zealand markets, ending in 2010, Pacific countries will need to find other ways, such as increased labor mobility, to integrate with their larger neighbors.

    Lin told Xinhua greater migration of Pacific Islanders toward centers of economic activity will help ease the burden of remoteness. Remittance flows sent home by migrant workers have been found to have a positive effect on income distribution and development in several Pacific island nations.

    Lin said tourism and less expensive labor force in island states have been hit hard by the global crisis. Continual support for labor migration schemes, both skilled and unskilled, is imperative in rebalancing some of the geographic inequalities facing the region.

    An increase in labor outflows from the Pacific islands would raise welfare both in the Pacific island nations as well as in large neighboring counties such as Australia and New Zealand.

    Likewise, he said, reducing costs associated with remitting money back home is also of great benefit to Pacific island nations in overcoming some of the geographical barriers hindering economic growth.