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How the PICs will fare in 2006
Robert Keith-Reid
We're back at the traffic light signals, green (All Go), amber (Wondering), red (Worrying), we paused at a year ago in assessing what lay ahead for the Pacific Islands in 2005. What is the prognostications for 2006?
It will be a momentous year for the three small atolls of Tokelau. About the middle of the year they will become practically independent of New Zealand.
New Zealand's Helen Clark wants to dump Tokelau as an embarrassing relic of the colonial
past.
Tokelau, which with Niue by population will have the distinction of becoming one of the world's smallest self-governing countries, is irritated to hear a New Zealand opposition view that it is far too small and poor for independence.
2004 will be a busy year for election supervisors. Elections will be held in Samoa, Solomon Islands, Fiji, and Tuvalu.
Changes of government in Vanuatu, the Cook Islands and French Polynesia are always a possibility if opposition politicians manage to rake up sufficient support for votes of no confidence in governments.
The Fiji election will be a particularly critical one, not just for Fiji but the region.
It could possibly bring about the return to power as prime minister of Mahendra Chaudhry, the Fiji Labour Party leader, ousted by a coup in 2000 by a band of crooks and indigenous politicians who couldn't stomach the thought of having an Indian as the head of government.
If Chaudhry wins the election, will there be another coup, perhaps one far more violent than the coups of 1987 and 2000?
Allowing for such great natural disasters as earthquakes, tsunamis, exploding volcanoes and hurricanes, and trusting that the Pacific will remain free of the attention of imported terrorism and avian flu, the big stories of the year could be Tonga and Fiji; Tonga because it is now in the throes of a political and economic crisis.
The democracy movement is one the 130-year old monarchy will have to bow to sooner than had been thought. A huge pay rise for civil servants forced on the government by a strike is unsustainable.
Papua New Guinea's economy is on the mend but not the overall quality of riotous politicians. These heavily outnumber and often frustrate the small band of leaders of integrity who labour to keep the country on track.
The recovery of the Solomon Islands from the disastrous war between Guadalcanal and its Malaitan settlers continues. Question: Will the country remain reasonably stable after the departure, sooner or later, of the Australian-led repair force, RAMSI?
Events in France's small, obscure Pacific colony of Wallis and Futuna turned ugly in the second half of 2005, with violence caused by local chiefly rivalries.
Trouble still smoulder there, as in France's two other territories, French Polynesia and New Caledonia, where politically inspired strikes towards the end of 2005 put the future stability of both territories in question.
American Samoa is gripped by nightmares about the possible extinction of its only serious industry, tuna canning.
A bright spot is Nauru; the unexpected discovery of millions more tonnes of phosphate should become the insolvent nation's salvation.
Cook Islands' politics continue to be convulsed by corruption; some people feel the economic recovery scraped back after the 1990's collapse into near national insolvency is being eroded by the return of some bad old ways.
Niue hopes to become the world's first country entirely dependent on windmills for generating electricity.
The Northern Mariana Islands is on course for economic basket case status because of the collapse of its garment industry and severe erosion of tourism arrivals caused by the withdrawal of an airline that flew in tourists from its key Japanese market.
The outlook for tourism is good, particularly for Fiji, Samoa, Vanuatu and the Cook Islands. New Caledonia and French Polynesia hope to revive their flagging industries.
The other big Pacific regional industry, tuna fishing, is moving to protect itself from over-fishing by foreign fishing fleets, but how fast and effectively?
Implementation of the Pacific Plan will get underway this year. HIV/AIDS is overwhelming Papua New Guinea's capacity to fight it. In the opinion of some, the same grim occurrence is happening in Fiji.
Poverty is intensifying the plight of more people throughout the Pacific. In Papua New Guinea 90,000 school leavers, in Fiji 15,000 and in Tonga, Vanuatu, and the Solomon Islands tens of thousand more children leave school with no prospects of a job.
HIV/AIDS, poverty and unemployment: These three great blights, not climate change, will continue to steadily undermine the future tranquillity and stability of the Pacific Islands through 2006 and for many years afterwards.
FRENCH POLYNESIA
Strikes that blocked road access to and from the port of Papeete and anti-government protests that killed plans for a new form of social security rocked French Polynesia's centre of government, Tahiti, in the last weeks of 2005. Volatile times last year were a factor in the deterioration of tourist arrival figures.
News about political and labour trouble influenced tourists to steer clear of the territory; the perception was that it wasn't the paradise that promotion presents it as being.
Oscar Temaru, the independence leader, who won back the presidency in March 2005 after losing a no-confidence vote to his old rival Gaston Flosse, four months earlier, was less popular by the end of 2005 than he was a year earlier, according to a poll.
In December, he ran into stiff opposition over his 2006 137,000-million Pacific franc (US$1.36 billion) budget in the form of four days of strikes and protests from trade unions against a plan to lift the minimum monthly wage to US$1235 by cutting the employers' contribution to a social security fund and imposing a so-called general “solidarity” tax to boost revenue for the fund. Protests in Papeete became so hot that he was forced to drop the plan.
Temaru is adopting a softer line on independence from France; eventually, at the right time, he says. Arch enemy Flosse, who opposes independence, has challenged him to hold a referendum on the issue.
Even Temaru admits the territory's economic reliance on France is so great that it will be years, if ever, before it can stand alone, yet maintaining high living standards propped up by French aid.
Flosse has his own worries. He's under investigation for alleged corruption and recently had his property raided by police in search of clues to solving the alleged murder of a journalist.
The tourism industry is being reorganised in the hope of recovering growth for it; the trouble is that a lot of travellers regard French Polynesia as being too expensive to visit.
Air Tahiti Nui, flying five big jets to France, United States, Japan, Australia and New Zealand, reported that 2005 was another year of losses, now totalling around US$50 million.
While Temaru's coalition government controls about 32 of the legislature's 54 seats, a Flosse comeback is always a possibility, given fickle Polynesian political loyalties. Paradise, French Polynesia style, is not that stable.
FIJI ISLANDS
On the surface, Fiji looks good. Record tourism arrival figures and more than F$1000 million (US$580 million) is currently being invested in resort hotel and village projects. This is just the icing on the cake. Inside, there is a growing turmoil about worsening poverty, unemployment, corruption and doubt about the government's ability to control spending (borrowing has doubled to exceed F$2000 million in recent years) and the government's ability to control the civil service and the army. Politically, matters are complex, volatile and, fundamentally based on indigenous Fijian versus Indian settlers (even though many Indians are third and fourth generation citizens).
While Prime Minister Laisenia Qarase indicates that a general election due to be held in 2006 won't happen until August the poll may happen in May.
The fight is between Qarase's Fijian nationalist-minded party, the Soqosoqo Duavata ni Lewenivanua (SDL), and the Indian dominated Fiji Labour Party, headed by Mahendra Chaudhry, elected as the country's first Indian prime minister in 1990 and put out of office a year later after a coup by civilian led anti-Indian nationalists. At the time ISLANDS BUSINESS went to press (late December) it was impossible to judge accurately who would win the election, except that Chaudhry's return to power remained a possibility.
Should Qarase keep power, then the outlook for Fiji is for another five years of reasonable stability and some economic growth, though not nearly enough to dampen upsurging poverty and unemployment.
Should Chaudhry win what then? Another coup? Probably not, but his government will suffer from the hostility of a big section of the public service and from malignant opposition from anti-Indian Fijian extremists.
He's a man standing in considerable personal danger from people who want him out of the way. The army, well, certainly the army commander, Frank Bainimarama, who ended the 2000 crisis by forming a temporary military government and later handed power back to a civilian regime, says it won't again be used for political purposes by rotten politicians and will only support any properly elected government to the hilt.
Bainimarama is deeply suspicious of and on very bad terms with the Qarase government.
He thinks that too many of its members are 2000 coup sympathisers, inclined to do it again. That, he says, won't be allowed to happen. Anything could happen in Fiji during 2006, the worst included.
TONGA
Tonga is a worry. After 130 years of being a quaint, picturesque Polynesian kingdom it is no longer quaint. The economy could collapse. So could the current form of government. A massive civil service pay rise is multiplying the troubles the monarchist government faces in dealing with mounting populist pressure for a democratic government.
The kingdom is moving inexorably to democracy, pressed by aid donors as well as agitation by the church-backed pro-Democracy Movement. This will no longer enable King Taufa'ahau Tupou, 87, his family and Tonga's 33 nobles to dominate the country's 100,000 people unquestioned as they have done so for 130 years.
Politically, 2005 was the most restless year for more than a century. Royalty is accustomed to traditional blind obedience from its subjects.
Traditional life is fading as worsening destitution and employment affects more than 30% of the population. There is public outrage about wealth that telecommunications, power supply, airline and internet domain monopolies have brought Crown Prince Tupouto'a, 57, and his sister, Princess Pilolevu.
Unprecedented anti-royalist marches began in March. They culminated in September with a march in support of a civil service pay strike that brought out about 10,000 people, Tonga's greatest protest demonstration.
A six-week unprecedented civil service strike forced the government to capitulate to demands for a 60-80 percent pay rise, finance minister Siosiua 'Utoikamanu warned would wreck an already dangerously weak economy.
In a November 28 statement, the minister warned that in the next 18 months economic difficulties would become “dire”.
The pay rise added T$31.7 million to a deficit forecast for the 2005-06 150-million pa'anga (about US$75 million) budget. The cost of the hike will rise by an additional 40% in 2006-07.
The finance minister doubts he can cope with it without imposing savage economies. These will inflame worsening social unrest and produce yet more impossible pay demands.
'Utoikamanu and the Asian Development Bank advisers anticipate that inflation will roar from about 8% to 20% and seriously erode the value of Tonga's currency, the pa'anga, (now worth about 50 cents US).
They predict many business bankruptcies and flaring unemployment, declining education and health standards and forced sale of government assets.
A maverick member of royalty, Prince Tu'ipelehake, a nephew of the king, backs the democracy movement.
Late in October, Tu'ipelehake, says he had been told by the king that a national commission on political reforms would be permitted. Some of the democracy movement's leaders claim the commission is a fudge to defer reforms indefinitely.
Tu'ipelehake is confident of serious reform being accepted in late 2006 after the commission on constitutional reform gives its report to parliament and the government in August.
But militant democracy supporters may not be prepared to wait that long. Protests in Tonga, so far relatively peaceful, could become violent.
NEW CALEDONIA
New Caledonia is in a bind. It hopes for an enormous growth and wealth from two huge new nickel mines.
Construction of one at Goro in the already wealthy white-dominated south has begun by INCO of Canada. But the one planned at Koniambo, in the poor indigenous Kanak-dominated north was in doubt at the end of December.
In November 2005, news of the merger of the Canadian mining companies INCO and Falcolnbridge aroused speculation about whether Falcolnbridge would proceed with Koniambo.
It was required to make a US$100 million initial commitment to the US$2.2 billion project by December 31 (2005) to qualify for French government tax incentives. It had not given a decision by late December.
SLN-Eramat, the French owner of the long established nickel mining and smelting company Societe le Nickel (SLN), continues to express its willingness to take over the Koniambo project if Falcolnbridge withdraws from it.
Should both mines proceed, the investment of almost US$4000 million required for them and the creation of several thousand new jobs would begin to move New Caledonia away from its overwhelming dependence on French aid.
However, both projects are incurring mounting resistance on political and environmental grounds from indigenous Kanak organisations. Some trade unions are voicing opposition to the temporary hiring of up to 4000 Filipino workers building the mines.
New Caledonia's employers' federation is alarmed by what it says is a mounting industrial unrest caused by the deteriorating social conditions. It expects time lost by the strikes in 2005 to be the worst in three years.
Avenir Ensemble (AE-Future Together), the lead party in the territorial government, hopes to strengthen support from middle class voters by promising massive tax cuts in the expectation that government revenue loss will be compensated by revenue from the expansion of nickel mining.
AE leaders, who disenchanted former adherents of the hardline RPCR, hope to win Kanak sympathies by such strategies as introducing the teaching of Kanak languages and studies in the school curriculum and implementing policies to do more to bring Kanaks into mainstream business and government administration.
It intends to broaden areas in which various responsibilities are being transferred from France to the territorial government as envisaged by the Matignon and Noumea agreements for ending the violent strife between the Kanak and white settler communities.
President Marie-Noelle Themereau is emphasising, however, that the AE's desire to gain more autonomy and enter closer political relations with the Pacific Islands Forum of independent nations should not be interpreted as a desire for full independence.
Kanak leaders, who mostly favour full independence, a possibility offered in the form of an eventual referendum on the issue specified in the 1998 Noumea Accord, are displaying more impatience with what they complain is the slow or non-implementation of the Noumea Accord principles intended to give indigenous people more decisive say in New Caledonia's affairs.
Kanak's political influence continue to be crippled and diluted by dissent and rivalries within the umbrella FLNKS-Kanak Socialist National Liberation Front.
NORTHERN MARIANAS ISLANDS
Partially independent from the United States, but ultimately completely dependent on it, the Northern Marianas is an unhappy country. The locals are outnumbered by foreign “guest workers” and suspect Asian businessmen. The garment industry has collapsed and tourism figures dived when Japan Air Lines ended flights to it from Japan, the key tourism market, a few months ago.
The ineffective government is broke and in December could not buy the fuel needed for power stations. Saipan, the main island, was being hit by constant blackouts as power stations were shut down. The government is sueing for US$100 million it claims it is owed by the United States government. The outlook for Northern Marianas? Bleak.
NAURU
Having lost investments valued at more than A$2000 million, Nauru's misfortunes were capped in December when the United States Government seized Air Nauru's sole jet because of non payment of loan installments.
Air Nauru struggled on by daily charters of other jets to keep services going. The current government is living hand to mouth, also daily. Australian advisers have taken control of some of Nauru affairs; this is resented by some Nauruans but accepted by realistic ones.
Restoring Nauru to credibility as an independent nation will take years. However, a New Zealand company, Astro Pacific Group, which says it was hired to run Nauru's new mining company, says it has discovered 46 million tonnes of unsuspected phosphate. It had been thought that phosphate had been practically mined out. If the discovery is what Astro Pacific says it is, then Nauru has been saved from years of destitution. But one Nauruan source cautions: All is not as good as it seems. Wait and see.
PAPUA NEW GUINEA
Let's give PNG the benefit of the doubt. The list of its woes is dismally long. But the economy and growth is picking up. Gas, new mines, palm oil and fishing are all go industries. The government's financial management is improving out of sight, in between big disappointments.
Prime Minister Sir Michael Somare is in sight of completing a historic first. His government looks like being the first to complete a full-term of office. Electoral and parliamentary reform should help stabilise the country's wild politics after an election in 2007. Yes, PNG is a difficult place with some impossible hurdles to jump over somehow. It is not a failed or failing state.
SAMOA
The other day, after a poll hinted that a general election in February would be won by Opposition Leader Le Mamea Robati, Prime Minister Tuilaepa Sailele Malielegaoi laughed. His ruling Human Rights Protection Party controls 33 of parliament's 39 seats and has won the election since 1982. The performance by the opposition is conspicuously weak. Still, who really knows, perhaps Samoans may decide it is time for a change of government. This is very unlikely to happen. Tourism is beginning to boom. After several poor years, tuna fishing is recovering. Having achieved a growth of 5.6% in 2004-05, the government is hoping for a 5% growth in 2005-06, driven by tourism, construction and fishing. Not everything in Samoa is perfect. There is concern about emerging worries as unemployment, youth issues such as marijuana and crime, and lack of foreign investment.
SOLOMON ISLANDS
The repair and reconstruction of the Solomon Islands government systems and economy will progress steadily, accompanied by a continuing noticeable improvement in the management of the country's finances. Massive Australian funding will continue to support the repair of economic damage and the rebuilding of government institutions crippled by two years of civil war in Guadalcanal that followed a coup in 2000 by militants from the island of Malaita.
Substantial funds from the European Union, New Zealand, Japan, Taiwan and some other donors will also support the Australian-led Regional Assistance Mission to the Solomon Islands (RAMSI), whose leader, James Batley, considers its presence will be needed for many years.
While the Central Bank of the Solomon Islands (CBSI) is maintaining its forecast of 4% GDP growth for 2005, Governor Rick Hou, in his latest assessment, predicted that at least 20 years will be needed to restore the country's economy to the position it was in prior to the communal trouble that turned to violence five years ago.
Some Solomon Islands politicians talk of more “ownership” of RAMSI activities, meaning a dilution of Australian control. While some critics are influenced by anti-Australian feeling and fear of prosecution for corruption and other wrongs perpetrated by them during the communal unrest, others are genuinely anxious to assert Solomon Islands' independence.
As a general election expected to be held towards the end of March looms, politicians, including Prime Minister, Sir Allan Kemakeza, are reviving nebulous political parties dormant since the last election or floating new ones of little substance.
The outcome of the election is unpredictable. Going by past history more MPs will lose their seats to newcomers who will immediately be courted for their political loyalties by a few hardened survivors.
Kemakeza has reactivated his Peoples' Alliance Party (PAP) but the prospects for this are as doubtful as any other party. Kemakeza may keep his parliamentary seat but inquiries by RAMSI authorities into his role in the distribution of millions of dollars of “compensation” from the treasury as governance deteriorated in the period before RAMSI's July 2003 arrival, put his future in doubt.
VANUATU
Vanuatu's economy is growing reasonably well, energized by improving agricultural production, expanding tourism and low inflation. Reserves are healthy, inflation is falling and the government is improving control of its growing revenue.
Estimates of 3.2% GDP growth for 2004 appear to have been too low, according to the Reserve Bank of Vanuatu (RBV), which now estimated growth to have been slightly above 4%.
Politically, the coalition government, led since December 2004 by the National United Party (NUP), is wobbly, despite a memorandum of agreement signed last October by five parties intended to strengthen it.
On November 13, prime minister Ham Lini sacked finance minister Moana Carcasses and ni-Vanuatu business minister, Josua Kalsakau. They were replaced by Willy Jimmy, a veteran who would love to be prime minister one day, and Louis Eta, while Vanua'aku Republican party's Maxime Carlot Korman, another former prime minister, was restored to cabinet as lands minister.
The shuffle bears out speculation that Lini might be challenged for power by the Greens Confederation led by Carcasses.
The Greens have swung five more MPs to their side in recent weeks.
French Polynesian-born Carcasses denies he hankers for the prime minister's office.
In December, former prime minister Serge Vohor withdrew a no-confidence motion against Lini when he realised he had little support for it.
Vanuatu has had a history of political instability since the early 1990s. There could well be yet another change of government in 2006. Will that really matter? The country will just carry on.
TUVALU
An election will be held within a few months for Tuvalu's 15-member parliament. Four changes of government in recent years have incurred some unaccustomed instability that has impacted unfavourably on the continuity and implementation of government policies. There is a body of opinion that believes the election will draw a record number of bright young candidates who think it is time for a change and that quite a few old guard politicians will find themselves in retirement.
This theory could be dead wrong since Prime Minister Maatia Toafa appears to be strongly positioned with a 10-5 parliamentary majority. Otherwise, Tuvalu is quite comfortable, thanks to annual investment earnings from its trust fund and a few other little deals. It may or may not be the first country to sink below the sea due to climate changes that may or may not be happening.
GUAM
Some of the natives are restless. They are not all that happy with being an American colony with no future except Japanese tourists. Oh, and the Americans are about to spend billions of dollars building up Guam as a stationary aircraft carrier for attacking Mr Bush's enemies, imagined or otherwise
COOK ISLANDS, KIRIBATI, NIUE, MARSHALL ISLANDS, FEDERATED STATES OF MICRONESIA, PALAU
Not that they are plagued by worries, but through 2006 all will cope in one way or the other. Just as along as they steer clear of chicken flu.
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