What the countries can expect in the New Year

Samisoni Pareti and Dev Nadkarni
2008 may be one of the region’s best years if our outlook for the new year all comes true. For the first time in many years, countries which we have given the “green” light surpassed those with “amber” ratings.

Smiling Interim PM Bainimarama (left)... would he b e able to deliver his promise of holding an election in 2009?

Out of the 17 countries profiled in the next few pages, nine got the “green” thumbs up for 2008.

Amber light with the possibility of it turning either way to green or red went to seven islands nations with only Fiji—still adjusting from its fourth coup in 19 years in December 2006—shared the lone light of red.

Are we being too optimistic? Perhaps we are, that much we can concede. But then, we will always fall back on a favourite line of our late publisher Robert Keith-Reid that we’d rather give our leaders the benefit of the doubt.

Just as we were going to print for instance, Nauru’s amber lights took a turn for blinking red with the fall of the government of President Ludwig Scotty and the assumption to office of one-time Commonwealth Games weightlifting gold medallist, Marcus Stephens.

It may revert to green soon enough. Such is the nature of islands politics and it is for this very reason that many would rather not put their money or their name to any predictions.

We are also giving “green” to Kiribati, Niue and Tuvalu. Although these islands nations have worrying challenges, they could very well explode into life threatening crisis.

Tuvalu’s revenue base has been dwindling in recent times mainly due to lower than expected returns from its TV dotcom domain as well as fishing licences.

Poor returns on the latter prompted the Apisa Ielemia-led government to break ranks and offered to seal a bilateral deal with the European Union on fishing access.

Tuvalu now joins the Federated States of Micronesia, Kiribati and the Solomon Islands in going bilateral rather than multilateral in a region which has undisputedly the world’s largest remaining tuna stocks.

Palau, although being one of the richest islands nations in the Pacific, may have its lights revert to amber depending on the outcome of this year’s general elections.

Flamboyant president Tommy Remengesau Junior has served his full term and is not eligible for re-election.

On the whole, the fallout from the disunity in trade talks with the European Union will continue to be felt in 2008.

For being the two largest countries in the islands, what Papua New Guinea and Fiji did in breaking ranks and defying expert advice to sign up an interim trade pact with the EU is inexcusable.

Since all Pacific members of the ACP had taken the common decision to negotiate as a group, both countries had the moral obligation to uphold that common position.

Now there is little chance of Fiji and PNG and by extension the islands of the Pacific extracting themselves from the difficult positions the two countries had created.

As the experts had been warning all along, a bad EPA will only lead to a bad PACER, the Pacific Agreement on Closer Economic Relations with Australia and New Zealand.

But then again, this region cannot say it has not been forewarned.

As far back as we can remember, this magazine had repeatedly questioned the strength of solidarity amongst the islands countries, and the genuineness of their overly rated Pacific Way of decision-making, which is through consensus.

We had questioned their solidarity when Pacific Islands Forum member countries sought a replacement for Papua New Guinean secretary-general of the Forum Secretariat, Noel Levi.

We again wondered about their solidarity when the United Nations’ agency UNESCO wanted a Pacific representative on its executive board.

We hardly got a response when we asked why some Forum islands countries had opted to pursue bilateral fisheries agreements with the Europeans.

Perhaps the time is right for islands leaders to now grab the bull by the horn, admit they can’t strike unity and allow each islands nation to pursue its own foreign and trade policies bilaterally.

Here is what the New Year is expected to bring:

MELANESIA/ Samisoni Pareti

Papua New Guinea

The grand old chief is back and 2008 should be the year when the master politician will work hard at leaving a lasting legacy for a country that he led out of Australian colonial rule in 1975.

Happy... PNG economy on a high

For a very long while now, things seem to be going well for the PNG economy.

With a strong performance in gold, copper and oil production, PNG is roaring into a 5 to 6% growth rate for the new year.

Most of its other exports—coffee, cocoa, timber, tuna, copra and palm oil—are also showing healthy signs of increased earnings.

In deciding with Fiji to leave the rest of the islands of the Pacific on a lurch in their joint negotiations with the European Union to sign up an interim economic partnership agreement, Somare’s trade (and foreign) minister, Sam Aba was mostly driven by the desire to protect its tuna export market.

For Aba, the protection of jobs for some 3000 of his people runs supreme to any other interests there may be in the Pacific region.

Relations with Australia seem to be entering calmer waters now with the election into office of Kevin Rudd in place of John Howard.

Somare met Rudd on the margins of the world climate change conference in Bali last month and both men came out agreeing to restore relations.

The annual joint ministerial forum between the two nations—suspended by the Howard Government in protest at the Somare Government’s decision to aid the flight of controversial now former Attorney-General of Solomon Islands Julian Moti from Australian authorities in 2006—will re-convene early this year.

The challenge for the grand chief and his government to put the buoyant economic success to productive use.

He should really work on PNG’s social development issues as suggested by our 2007 Pacific Person of the Year and Somare’s community affairs minister Dame Carol Kidu, to ensure that wealth gained from the country’s economic success is shared fairly and equally.

Hardly any nation, whether developed or still developing, has a magic formula on wealth sharing, but being seen as wanting to fulfill such noble objectives should be a good start.

The country’s law and order situation still needs a lot of work and until would-be tourists see an end to constant reports of armed hold-ups, car-jackings and gang rapes, PNG’s full potential as one of the world’s best tourist destinations will never be realised.

Unemployment, the growing number of shanty towns in urban centres and an unacceptably high number of HIV infections are potential time-bombs that need constant attention and addressing.

A multi-facet approach at resolving these social and development-related ills involving the combined resources and expertise of government, the private sector and community should continue to be encouraged and supported with a lot of resources and commitment.

Beneath the glitter of growth, troubling undercurrents however flow. Visit Port Moresby or any of PNG’s major urban centres these days and rumours of a possible mutiny in the government’s coalition linger.

Members of the PNG Defence Force were put on high alert late last year over reports of a possible assassination of Somare by people that were never identified.

Some observers point to the growing influence of the so-called Somare clique, said to include children of the prime minister who are among his closest advisers in cabinet.

Critics, for instance, wondered whether Arthur Somare, currently his father’s minister for state enterprises, is being groomed to take on the leadership mantle.

However, they play out in 2008, it will be a pity if the main lesson of the last few years is lost on politicians; that economic growth can only be achieved and solidified through political stability, something that was alien to PNG until Sir Mekere Morauta’s government changed the constitution and allowed Somare to become the first PM to serve his full five-year term to July last year.

Perhaps the senior Somare needs to have an exit strategy at hand, although it is the desire of many that the search for potential successors need not be limited to people who carry the same surname.

Outlook for PNG in 2008: Amber with possibility of turning to Green for the very first time!

Fiji Islands

You never know what Fiji will produce in 12 months, so the best advice is to prepare for the unexpected.

Much of the uncertainty stems from the man who used his 3000-strong army to oust the islands’ elected prime minister in a coup in December 6, 2006.

Military commander Frank Bainimarama is still the head of the country’s interim government and 2007 saw him grappling with his strongman, no-nonsense image as a military chief and that of being a statesman his non-uniformed close advisers want him to be.

So the Pacific, indeed the world, should expect the commodore to play out these two seemingly contradictory roles in 2008.

You see the paradox in most of his government’s major policy decisions to-date.

First and right from the day of the coup, the world was reminded that Fiji won’t be rushed into a general election and that the international community cannot dictate poll dates to his government.

Alas, Bainimarama wielded and assured the Pacific Islands Forum leaders in their meeting in Tonga last October that Fiji intends to go to the polls by March 2009.

In announcing his decision to form an interim government days after the December 2006 coup, Fiji’s fourth in 19 years, Bainimarama also made a rule that none of his ministers would contest the next elections.

He did not want a repeat of what happened in 2001, where he said the man he installed after the previous coup in 2000 (only to oust him six years later) used his position in the then interim government to win the people’s mandate.

Now Bainimarama seemed oblivious to his self-imposed rule and speculations are that he had agreed to a compromise; that ministers of his interim cabinet who want to contest the 2009 elections need to resign.

Fiji was told ousted PM Qarase was now “insignificant,” yet no sooner had the ousted leader and his wife landed in Suva on September 01 last year after eight months of self-imposed exile at their home island of Vanuabalavu did Bainimarama ordered the re-imposition of his draconian emergency rule only to remove it four weeks later.

For those who know the man, Bainimarama is genuine, a man who honestly believes he can bring about a Fiji that is free of racial discrimination and corruption.

That is why the Fiji Independent Commission Against Corruption was one of the very first initiatives he began soon after the coup.

He now wants to see Fiji abolish its ethnically-based voting system and replaced it by one-man one-vote.

This is why the formulation of a people’s charter to him is a priority, more important it seems to the international community’s wish to have a free and fair election.

However noble such a vision is, it is the method used to bring such a vision to reality that has alienated many in Fiji, especially amongst the indigenous community.

Such changes cannot simply be enforced at the barrel of a gun.

If Fiji is to permanently become colour blind to race and truly become an island where all is free and equal, such a desire must come from the people themselves. Which is why many in Fiji share the international community’s view that such a task is best left to an elected government. It is simply not the job of the military.

For 2008, Fiji and the world would keenly watch whether Bainimarama will deliver on his promise of holding an election in 2009 and respecting the outcome of that election.

It would help his cause if he tries to work on selling his vision to his own people; his province of Tailevu and the indigenous community at large.

He may hold good intentions in removing a Fijian-led government, closing down the powerful Great Council of Chiefs, downgrading the indigenous Fijian ministry, revoking affirmative action programmes, and downplaying the key role of the tourism industry (which employs indigenous Fijians mainly) only to prop up what many economists believe is the dying sugar industry.

A good public relations initiative will help convince the majority of his own people that such revolutionary changes are being made for their own good and that his military and the interim government are not “anti-indigenous.” But to force such changes will hardly win him indigenous support.

On the economic front, 2008 will be a consolidation year after the difficult coup rehabilitation process that took up most of 2007.

With falling sugar prices, unresolved farmland leasing tenure and old sugar mills, it is difficult to see sugar reclaiming its spot as Fiji’s main foreign exchange earner in the coming years.

With its ill-conceived decision to defy expert advice and sign a lousy interim economic partnership agreement (EPA) with Europe, Fiji will soon realise the grave mistake it had done once it attempts to finalise before December 31, 2008 the main EPA as well as the new trade agreement it needs to negotiate with Australia and New Zealand under PACER.

Tough decisions will be called for and sooner or later Fijian leaders—in uniform or not—may have to realise that its future exports need not lie continuously on sugar but on tourism, labour (skilled and unskilled) exports and perhaps sports.

Outlook for Fiji in 2008: Red

Solomon Islands

2007 has been a colourful year for Solomon Islands and that’s putting it pretty mildly. The Pacific and the world may have to expect this to continue throughout the new year.

Manasseh Sogavare will be missed although not so much by the people he antagonised in the Australian-led Regional Assistance Mission in the Solomon Islands, RAMSI.

He may be too disruptive and unpredictable, but at least he stepped aside rather gracefully when he lost the confidence motion in parliament in December last year.

Quite a dramatic turnaround to what transpired in 2006 when an angry mob of young men went on a rampage and burnt down the entire city block of China Town in Honiara, forcing Sogavare’s predecessor, Snyder Rini, to resign.

By press time, the country’s parliament had yet to elect Sogavare’s successor. Media reports identified two candidates—Sogavare’s foreign minister Patteson Oti pitied against the opposition’s Dr David Derek Sikua, who used to be Sogavare’s education minister until his defection. Both men are extremely capable.

Oti is a seasoned politician and in his long career in leadership, had served in previous governments as well as in the opposition.

He was one of the most astute trade negotiators in the recent rounds of EPA negotiations with Europe. And despite pressures from fellow Melanesian Spearhead Group countries of Papua New Guinea and Fiji, he refused to let his country sign an interim EPA.

Dr Sikua, on the other hand, may be a novice in politics but he is a long-time educator and holds the necessary academic qualifications.

It is a pity though that political maneuvring had claimed a victim in Opposition leader, Fred Fono.
If there was one who kept the faith, who never wavered in his determination to get rid of Sogavare from office, it was Fono.

Supporters of Sikua are saying their man needs to become PM since he is from Guadalcanal and Fono isn’t. But such arguments fail the test as the very man who was once Sikua’s boss came from neither Guadalcanal nor from Fono’s Malaita province.

One would have thought that politicians including Dr Sikua would have been able to see that what Solomon Islands needs now is the right man, not the right province, to be PM.

Politics aside, there is optimism that the new leader will concentrate on the business of governance and not political grandstanding with Canberra or its protégé RAMSI.

So engrossed was Sogavare in his battle with Canberra in 2007—egged on by advisers like his disgraced attorney-general Julian Moti that many decried—he had little time for nation-rebuilding.

Like addressing the root causes of the ethnic war in 2000 between the people on Guadalcanal province where Honiara the capital is and those from Malaita province.

He was quick to form a commission of inquiry to investigate the China Town riots but did nothing on the causes of the ethnic crisis. Perhaps the new leader will have time to look into it now.

The relative peace and stability brought about by RAMSI is fuelling economic growth and this is expected to continue if not increased in 2008.

Tuna and timber have been good foreign exchange earners and palm oil is back in production.

Incentives should be given to copra production and provided a generous deal is cut for landowners, Gold Ridge mine in Guadalcanal should resume gold production and exports.

Like in neighbouring PNG, tourism holds great potential. Its fledging tourism industry is in dire need for more investment in infrastructure and marketing.

Linked to this will be the need to cut losses and stop interference in the running of the country’s national airliner although experts like those in the Asian Development Bank believe the country will be better off if Solomon Airlines is privatised.

Low cost carrier Virgin Blue is now reportedly eyeing flights to Honiara from Australia this year.

From being a colourful 2007, Solomon Islands in 2008 should be interesting.

If politicians get their acts together for once and put the interests of their country ahead of their own, the country might just get it right this time around.

However, Solomons being Solomons, politics like in other islands of Melanesia can be so fickle, it is perhaps prudent not to bet on a calmer and less disruptive 2008.

Outlook for Solomon Islands: Amber with chances of turning either Red or Green

Vanuatu

Vanuaroroa Ham Lini is seeking a fresh mandate this year so Vanuatu 2008 is going to be fascinating.

He may hold the record for being the longest serving prime minister of Vanuatu in recent times and one who survived the most number of confidence motions tabled against him in parliament.

For someone who took up national leadership because of his name and not so much out of a personal wish, this carpenter and traditional leader from Pentecost Island has done remarkably well.

He ought to be proud of himself.

Voters no doubt will get the chance to vote on his performance in this year’s elections.

Some might think that all his time in government had been spent watching his back, and surviving one confidence motion after another.

May be he had little time to focus on nation-building.

There were growing concerns for instance on the number of illegal land sales around Efate Island where the capital Port Vila is, led by some of his very own ministers or former ministers.

More could have been done in developing agricultural products like copra and kava.

Vanuatu is renowned for its organic beef and voters might like to know whether serious efforts have gone into developing Vanuatu beef into a major export earner.

He or whoever becomes PM would also need to watch wealth distribution, like PNG.

The rural to urban drift is unrelenting, leading to an uneven growth of shanty towns in urban centres like Port Vila and Luganville on Santo Island.

The deadly Black Sand community riots on the outskirts of Port Vila last year is indicative of this uneven development.

But Vanuatu seems to be doing something right. After all, it could not have been declared the world’s most happiest country for nothing.

Of all the islands in the South Pacific, it is the only one qualified to benefit from President Bush’s Millennium Challenge Fund. It is expected to receive US$66 million over the next five years.

After years of flying as a personal pawn of politicians, its national carrier is finally showing signs of maturity and growth.

It has embarked on an ambitious fleet modernising programme, which will include the delivery in the next two years or so of a new Boeing 737-800 and an ATR 72.

Its domestic service Van Air is also taking delivery of a couple of Chinese-built Y-12s.

This no doubt will assist in the airline’s privatisation plans, announced in mid-2007 by the Lini Government.

There are growing speculations that Australian-based Virgin Blue may get the nod to acquire the 40% shares on offer, emulating the successful deal it secured with the Samoa Government over Polynesian Blue.

An immediate effect of a viable and efficient airline will be felt in the tourism industry and since 2007 was a good tourism year for Vanuatu, 2008 should be even better.

Through the guidance of SOPAC, the Secretariat of the Pacific Geoscience Commission, Vanuatu is the only Pacific islands nation that has a workable disaster management and risk reduction plan.

But then politics doesn’t capture the best person for the job, so much of what Vanuatu will become in 2008 hinges on who the people of Vanuatu will vote into office this year.

Outlook for Vanuatu in 2008: Green

POLYNESIA/ Dev Nadkarni

Tonga

The South Pacific’s only surviving Kingdom is in the throes of transition as it plans to reform its political system towards a more democratic polity over the next couple of years. 2008 exemplifies this changing scenario with two major events in the first half of the year: a coronation and an election.

Protesting... Pro-democracy supporters during the Pacific Islands Forum meeting in Tonga.

King Siaosi George Tupou V will formally be crowned King of Tonga in August, shortly after his 60th birthday. The coronation was to have taken place last year but was postponed after the riots in Nuku’alofa in November 2006 that saw nearly 80 percent of its central business district reduced to ashes.

In the meantime, the kingdom will begin rebuilding the capital’s business district with a $60 million loan from the Chinese government under an agreement signed in November last year. It hopes to finish the reconstruction in time for the August coronation, which several royals from across the world are expected to witness.

Tonga will also hold an election this year under its present system, though the pro-democracy activists are insisting on holding it under the new reformed system the government plans to introduce only in 2010.

Ongoing court cases of those accused of sedition as well as other serious charges relating to the November 16, 2006 riots will continue dominating the headlines.

While the prevailing opinion in most circles is that the pro-democracy movement has lost most of its support after the shocking violence seen during the riots, the potential for sporadic violent incidents cannot be completely ruled out.

The continuing emergency provisions repeatedly renewed over the past year are meant to address exactly such an occurrence but how effective they will be in a crisis situation is debatable.

In this state of flux, little can be expected this year in terms of new foreign direct investment or an increased influx of tourists except perhaps around coronation. Big headlines will be made on the business front only if the King’s enterprises—he wants to divest his holdings in business—find buyers, just as his phone company Tonfon found Digicel.

The extent of the positive effect of Nuku’alofa’s rebuilding exercise on the economy will largely depend on the volume of contracts and tasks actually awarded to Tongan contractors and the local workforce by the Chinese.

Outlook for Tonga in 2008: Amber

Samoa

Last year, while serious political issues swamped most Pacific Islands, the biggest debate in peaceful Samoa was whether the country should change from left hand to right hand driving!

Prime Minister Tuilaepa Sailele Malielegaoi wants the change while many Samoans think that would put the country on a collision course. Experts have put the cost of such a change at hundreds of millions of dollars but the Prime Minister’s rationale is that vehicle imports from right hand drive countries are cheaper and will justify the expense over time.

Besides, most Samoans have relatives in New Zealand and Australia. The change will make it easier for them to gift cars back home. The controversy is still alive and will run well into 2008. With both sides of the road digging in their heels, the issue promises to turn into a politically bumpy ride for the ruling Human Rights Protection Party.

On the economic front, Samoa is expected to ride out of the liquidity crunch that was created by the overstretched government spending before the South Pacific Games last year. Growth, though less spectacular than in the 2002-2005 period, will be spurred principally by new construction projects in the tourism sector. But contradicting rumours on the nation’s largest private sector employer Yazaki Samoa’s future plans will likely lead to a perception of uncertainty.

Polynesian Blue’s spectacular success coupled by Samoa’s growing reputation as a safe tourism destination—particularly in comparison with neighbours Fiji and Tonga—will bring in bigger numbers of tourists this year.

The prevailing political instability in the countries surrounding Samoa saw Tuilaepa take a harder line against sub-regional groupings like the MSG (Melanesian Spearhead Group) during last year’s Pacific Islands Forum meeting. It will be no surprise if his government starts actively wooing regional organisations to set up their bases in Samoa in view of its stability.

Its reputation for deft economic management, a sustained growth rate and a result-oriented developmental approach has led many international agencies to heap praises on Samoa. This year, the country will build on this goodwill and emerge as a more important regional player than it has ever been before.

Issues relating to land ownership that have seen an escalation in legal wrangles in recent years, delays in matters like the long-awaited strata title legislation and social problems resulting from rapid urbanisation will continue to put the breaks on the country’s otherwise all-round progress.

Outlook for Samoa in 2008: Green

Cook Islands

The present Jim Marurai-led government has been among the more stable ones the Cook Islands has seen in recent times. Like most islands in Polynesia, the Cooks depends on tourism as its main revenue earner with more New Zealanders coming to its shores than any other country.

The Cooks like Niue is in free association with New Zealand and looks up to it to meet many of its infrastructural and development needs. Most recently it has embarked on a campaign to lure New Zealand teachers to take up jobs there, which, according to its education minister has been well received.

New Zealand has committed to building and upgrading infrastructure not only on the main centres but also in the outer islands. Building activities will probably lead economic growth in the Cooks this year, especially with the country hosting the 2009 Mini Pacific Games. It is looking for financing arrangements from China to meet the costs of the games infrastructure.

The defunct Sheraton Hotel will get a new lease of life starting this year after a New Zealand developer has undertaken to complete the 160-room project that was abandoned some 16 years ago, leaving the government in considerable financial distress. Between then and now, the Rarotonga-based project had at least one other false start leading to it being dubbed as a jinxed one.

Last year, the American Ambassador to New Zealand visited the Cooks and discussed possibilities of commercially exploiting minerals in its territorial waters in collaboration with American firms. The Cooks is also looking at harnessing tidal energy to produce electricity.

Throughout the year the country is expected to see a steady stream of tourists mainly to its main centres. The country though has no strategy to develop the sparsely populated far flung islands particularly those that lie to the north.

Outlook for the Cooks in 2008: Green

Niue

Niue exists in free association with New Zealand, which contributes most to its economy. Last year, New Zealand’s main opposition National Party contended that Niue had too much government for such a small nation: it has 20 MPs for its 1400 odd residents. In November last year, the micro-nation tried to reform its tax system by proposing a consumption tax of 12.5 percent and import duties on alcohol and tobacco in a bid to shore up revenues.

The effect of the new tax was sought to be softened by slightly lowered income tax rates. The opposition however accused the government of bankruptcy and said the income tax would mainly benefit civil servants and elected representatives. The tax bill has been deferred for three months giving time to all parties to study its proposals in detail and will come up for consideration again early this year.

However, most of the early part of 2008 will see Niue concentrate its efforts on organising this year’s Pacific Islands Forum summit to be held in August. The tiny island nation is considering putting limits on delegate numbers attending the summit owing to lack of adequate accommodation. It is likely the state will fall back on China to help with the infrastructure.

Towards the end of last year China was already in talks with Niue to revamp its old telephone system. The Forum meet will bring the region’s focus back on the world’s first country to reward smokers for quitting the habit.

Outlook for Niue in 2008: Green

Tuvalu

Climate change and sea level rise have brought the intense glare of the world’s media on to the atoll nation of Tuvalu, which barely rises two metres above sea level. The nation has been consumed by its international campaign on the impending ecological disaster and has been raising concern at every important forum across the world. For 2008, it will doubtlessly pin its hope on the new Labour regime in Australia that has already committed itself to climate change concerns by signing the Kyoto Protocol unlike the previous Howard administration.

On the economic front, profits from the country’s major revenue earner—the dot TV domain—for which Tuvalu has a multi-million dollar agreement with American giant Verisign will continue to rise as sales of dot TV addresses increase owing to the popularity of internet video sites. There are concerns though that the country may not be getting its fair share. This year, Tuvalu will begin work on improving its port facility in Funafuti with a US$8 million grant from Japan.

Outlook for Tuvalu in 2008: Green

MICRONESIA/ Dev Nadkarni

Kiribati

Recently earning the sobriquet of “the country at the end of the world”, the atoll nation of Kiribati whose islands straddle the middle Pacific has been in the forefront of the climate change/ sea level rise awareness campaigns in international forums over the past few years.

The country has seen some political stability in recent years and last year President Anote Tong was re-elected to the nation’s leadership following election albeit one which saw the lowest ever voter turnout.

In 2008 and in following years, this fact may become more evident for the President and his ruling party, especially as a raft of legal cases pertaining to the elections plod through the nation’s court system. Like several other Pacific Islands polities, Kiribati too has suffered from collapsing governments facilitated by defecting elected representatives.

The country has come in for praise for the successful implementation of several innovative environmental programmes including the ‘trash for cash’ initiative, which has seen widespread community participation and helped a great deal in solid waste managemen¬t—a major problem in the atoll’s lagoon fringe and even its littoral zones.

Political stability will be the key determinant in Kiribati’s economic progress as well as its global campaign to bring the world’s attention on the very real problem of sea level rise, which is now visibly affecting residents of many of its atolls.

Outlook for Kiribati for 2008: Green could turn to Amber

Nauru

Now that Kevin Rudd’s new Labour government in Australia is poised to pull the plug on the Howard regime’s “Pacific Solution”, Nauru is in serious trouble. Under this programme, it held refugees that turned up on Australian shores in a detention centre while their cases were being ‘processed’ back in Australia.

Since 2001, it has depended largely on the funds it received from Australia for baby-sitting refugees. It has received over $100 million since then besides other aid amounting to nearly 10 million every year.

Australian critics have described these payments as an “unmitigated bribe” to keep the camps going.

In the past couple of years, the country of 10,000 residents has embarked on a reform programme that observers believe is on the right track.

The end of the detention centre will undoubtedly lead to another crisis as both lawmakers in Nauru and human rights activists in Australia begin demanding that Australia compensates Nauru for pulling the plug so suddenly.

For the closure will put an end to a big chunk of Nauru’s income and put hurdles in the path of the government’s reforms programme.

Only some sort of a rescue package from the Rudd Administration would address this issue. If ever there is going to be one, it will be an issue of much contention in Nauru.

It will prove to be yet another issue that is sure to cause more political turbulence this year. Like Kiribati, the key to Nauru’s progress this year will definitely be political stability.

Outlook for Nauru in 2008: Amber that could turn Red

FRENCH TERRITORIES/ Dev Nadkarni

French Polynesia

2008 is not expected to bring any relief to French Polynesia’s bumpy politics—at least not in the early part of the year.

The territory’s two main political parties have had divergent views on the French administration’s insistence on legislative elections to be held at the end of January.

In mid-November last year, the Tavini Huiraatira Party led by Oscar Temaru threatened to boycott the election while his arch-rival Gaston Flosse’s Tahoeraa Huiraatira Party welcomed the decision although expressing reservations on the proposed new electoral system.

But the French government announced in December that it had approved plans for the reform and that the elections will be held under the new system with two rounds of voting.

This is the second time in 12 months that the system has been altered, although no election was held under the proportional system proposed in February last year.

The reform, though aimed at ensuring stability in the territory’s notoriously fluid political ethos, has provided no measures to discourage party hopping—very much the reason for four no confidence motions in three years that felled previous administrations when assembly members simply crossed the floor and withdrew support. This has sparked widespread skepticism among political leaders on whether the new system will indeed serve the purpose as political power will remain reduced to a mere numbers game.

Meanwhile, the territory continues to reel under a range of socio-economic problems with an escalation in domestic violence and abuse of women besides periodic industrial unrest, the latest being a strike by medical professionals that crippled the health system.

President Temaru brought up the issue of self-determination in his speech during the Forum leaders’ meeting in Nuku’alofa, to which French Polynesia was invited as an observer, saying Fiji and Papua New Guinea did not support his bid for French Polynesia to be decolonised because of ‘internal reasons’.

The independence issue will continue to simmer through past the January elections and if Temaru retains office when French President Nicolas Sarkozy visits the territory in April for the first time after taking office, it might well turn out to be a prickly talking point at their meeting.

The end to French Polynesia’s political instability does not seem to be in sight despite the election under the new system.

Outlook for French Polynesia in 2008: Amber

New Caledonia

Like its sister Francophone territory French Polynesia, New Caledonia has had its own fair share of problems in dealing with distant France with the latest abrasive incident being the resignation of the French High commissioner after a reported disagreement with France’s minister in charge of its Pacific territories’ affairs.

And, again, like French Polynesia, labour unrest rears its head time and again. Last year, an industrial action crippled port and airport infrastructure putting a strain on both business and tourism.

Meanwhile, the pro-independence party has criticised the Sarkozy administration’s pronouncements indicating a progressively greater role in New Caledonia’s affairs.

This goes against the spirit of the 1998 Noumea Accord that was meant to work towards greater autonomy for the territory.

Being closer to Australia and New Zealand, New Caledonia has been aggressively pushing its tourism packages in the two countries. Investment in the sector is likely to grow this year, especially after the European Union’s development bank opened its first Pacific office last November in Sydney.

Consequently, the territory has forecast a nine percent increase over 2007 for this year at US$2 billion, which means economically the territory is ticking along fine.

This year would see further growth in its economy while its relationship with France will continue to be ticklish—but that may change after President Sarkozy’s visit in the middle of this year.

Outlook for New Caledonia in 2008: Green

NORTHERN PACIFIC/ Dev Nadkarni

Guam

Ever since the United States announced the relocation of its huge military base from Okinawa in Japan to Guam, the island territory in the Northern Pacific has been abuzz with the many possibilities that the US$10.27 billion investment might bring.

And it’s not just Guam that’s eyeing a slice of that huge pie. Islands in South Pacific as far away as Tuvalu have offered to send its people on temporary employment arrangements to take part in the coming building boom.

The transfer of some 8000 marines to Guam will also have an impact on the island’s social and cultural life—a fact acknowledged by the US administration. This year alone, nearly $200 million will be spent on infrastructure projects towards the military build-up.

This year, Guam is likely to receive more tourists from China because of some charter flights around the Chinese New Year. While this will boost the economy, there are fears security concerns around the new military bases could well become an issue of obtaining a China visa waiver—something which the territory has been requesting the federal government for some time now.

Outlook for Guam in 2008: Green

Northern Marianas

China’s entry into the World Trade Organisation (WTO) nearly decimated the US$1 billion garment industry in the Commonwealth of the Northern Marianas because of access to the huge American market where it was able to sell at low prices.

Fighting spirit in the Northern Marianas... could 2008 be one of the best years for the region?

The federal administration has been trying to exert greater controls in the affairs of the Northern Marianas and last year proposed new immigration provisions particularly to prevent Saipan from being used as an entry point for terrorists and human smugglers, especially in view of its new military base in nearby Guam.

The extension of the non-immigrant provision to the commonwealth will create a federally run guest worker programme that would over time put an end to foreign worker permits putting at risk the large number of foreign workers on the island who have been protesting against the law during the past year.

Governor Benigno Fitial has been opposing the new provisions and fears the territory’s economy will only get worse with an estimated 5000 foreign workers who will lose their jobs in the next one year as more businesses shut down especially in the garment industry.

Meanwhile, the territory is seeking increased funding for its social sectors, particularly health following a sharp rise in diabetes cases among its residents, who ranked third in a survey by the World Health Organisation among groups with the highest rate of diabetes around the world.

Outlook for the CNMI in 2008: Amber

Palau

US representatives are scheduled to meet leaders of Palau to review their 15-year Compact of Free Association in January, following the acceptance of the federal government’s request for early talks by Palau. The compact actually comes for review in October 2009.

The compact entitles the island to receive up to US$700 million in US aid until 2009 but hopes the aid will continue even after the review, without which it will find it difficult to meet its budgets.

Palau is hoping to cash in on its tourism potential and may consider shifting its support to China instead of Taiwan this year, following debates in its leadership circles. China is a far larger tourist market and will help its case better, according to its proponents, though nearly US$40 million comes from tourists from Taiwan every year.

This year, Palau will have to chart out its own plans to achieve economic self-sufficiency, especially in the face of the review of its compact with the US. It will need to find ways and means of cooperating with the Pacific communities more efficiently.

Outlook for Palau in 2008: Green that could turn to Amber

Marshall Islands

Last year’s elections in the Marshalls proved to be controversial with the Opposition accusing the government of illegally counting hundreds of votes to reverse the results in four seats. Owing to logistical challenges involving the outer islands, there was a delay in the counting of votes and the final results were not formally declared even weeks after the elections concluded.

Ongoing wrangling may bring in some measure of political instability in the island nation this year. The tussle will also cause tension in the country regarding the question of its support to Taiwan—an issue widely seen as having affected the election. Like many small islands states in the Pacific, the Marshalls too face problems of over crowding, solid waste management and a weak economy.

And like the rest of its neighbours in the Northern Pacific like Guam, the Northern Marianas and Palau, it is hoping the new American base in Guam will bring its people bountiful new opportunities.

How much of that will actually translate into dollars is a question.

Outlook for the Marshalls in 2008: Amber