Dev Nadkarni
Petroleum and energy prices at an all- time high—and headed further northward. Rapidly inflating food prices that have forced several Pacific Islands governments to suspend import duties on staples, having a telling effect on their internal revenue.

A progressively worsening global economic scenari, with no signs of an imminent turnaround. A tight credit market that is only getting tighter. Things couldn’t be bleaker. 

Yet, the Pacific Islands are on the cusp of a great new era in which, if its leaders play their cards unselfishly, intelligently and pragmatically, they could help bring about unprecedented all-round prosperity to their people.
In the past decade or so, the world has been increasingly turning its attention to the region because it sits in the midst of the biggest and least explored single geophysical feature -the Pacific Ocean. 

With the ever growing mineral and other natural resource needs of the world’s two most populous and fastest growing nations—China and India—and the simultaneous depletion of these resources in other parts of the world, it comes as no surprise that all eyes are now on a region that has been explored the least and one that holds such great promise.

Large mining corporations from different parts of the world have been trawling the seas these past few years, assaying targeted areas of the seafloor in partnership with nations owning the territories, collating a wealth of data.

Papua New Guinea has taken the lead in awarding exploration licences to prospecting companies from Australia and beyond. Tonga, Fiji and the Cook Islands have followed suit as also some western Pacific US territories.

These mining companies and consortiums have already paid millions of dollars merely to explore the islands’ existing exclusive economic zones.

Typically in such contracts, commercial terms for mining are decided after proof of any deposit is found and its quantity estimated giving valuable leverage to the host countries.

And it is this leverage that must be exploited with great care by the islands’ leadership. For their history is littered with any number of instances of smooth-talking middlemen who in cahoots with corrupt politicians have swindled the wealth of their countries.

It will be important for the countries to exercise the greatest caution while evaluating deals and must keep the collective national interest uppermost.

By May 2009, most Pacific Islands nations would have completed and handed in their submissions laying their individual claims to the extent of their continental shelves to the United Nations.

It is when these boundaries are defined that the real race for natural resources in the islands’ littoral and newly extended exclusive economic zones will begin in right earnest.

It will undoubtedly turn out to be the gold rush of this century. In many ways, the entire region will find itself in a situation similar to Nauru’s when commercial exploitation of its phosphate reserves flourished between two and three decades ago, bringing such great wealth to its citizens that it was counted in the top three richest nations of the world in terms of per capita income.

Sadly, though, short-sightedness, selfish interests, mindless mismanagement of the ballooning funds among a host of other unfortunate events reduced the country to the depths of penury and robbed the national pride of its citizens in a matter of less than a decade. That is a pitfall the leaderships of all resource- rich islands would do well to be mindful of.

The other important factor would be sustainability. Last month, two influential environment groups cautioned the Pacific Islands against rushing into seabed mining projects in their exclusive economic zones without proper studies on the impact it might have—both on marine life and the environment.

Greenpeace contended that the mining and dredging process destroyed the ocean floor and could have deleterious effects on both species and habitats.

It could also adversely affect existing lucrative economic activity like fishing because of the incidental destruction of marine habitats.

Also, the Marine Policy Institute based in Sydney pointed out that the International Seabed Authority had taken a conservative approach and had not permitted mining and prospecting corporations to undertake their activities in international waters because its studies showed them as being potentially damaging.

But interestingly international authorities have little control over a sovereign nation’s activity in its own exclusive economic zone which is set to expand considerably after the extents of their continental shelves are determined over the next few years.

This unfortunately leaves matters to the discretion of individual nations and needless to say, opens the door for potential corrupt deals between politicians and prospecting companies.

The environmental organisations’ warnings last month came at a time when mining corporations like Nautilus Minerals ramps up its operations in the region.

It has made seabed test extractions in PNG (presenting its first extarcted ore to PNG’s mining minister some time ago) and is soon to begin explorations in Tonga.

It has also lodged exploration licence applications in Fiji, Solomon Islands and New Zealand.

The company’s stand apparently disagrees with the contention of the environmental organisations.

It has quoted an as yet unpublished scientific impact study that has found seabed mining to be environmentally safe. Greenpeace has demanded that more than one independent scientific study needs to be conducted before seabed mining is allowed in the region.

The race for the riches of the ocean floor has well and truly begun. The time is now for the people of the Pacific Islands to keep a watchful eye on how their leaders deal with their collective wealth, rising above narrow, selfish interests to lead the region into a new era of prosperity despite the current economic gloom.

The wealth of nations has too often been sold off by unscrupulous elements in positions of power mutually sharing the spoils, keeping the rest of the country in the dark while stashing away their wealth in tax havens and secret investments overseas. And one can never be too watchful. For history has the nasty habit of repeating itself.