The Pacific islands economies display considerable heterogeneity on all counts except for their poor economic performance. The few positives however, are overwhelmed by the fiscal stress experienced in Nauru, Papua New Guinea, Solomon Islands, and Vanuatu. Tourism, a sector with significant potential for the entire region, has been buffeted by massive external shocks. This paper surveys key issues that pervade the Pacific: namely, deteriorating budgets and rising debt levels; increasing dependence on foreign aid for funding of basic services; and rising unemployment and crime. The prognosis for a sharp turnaround in any of these areas is poor, and concerted efforts must be made to kick-start growth to secure employment prospects and incomes of Pacific islanders.