Islands Business - Politics: TONG USES NUMBERS TO EXPEL CHINESE

Question-- How will it be executed?

Samisoni Pareti
When the government of President Anote Tong tabled its 2006 budget for debate in the Maneaba ni Maungatabu (parliament) last December, it was overshadowed by a peculiar item that appeared in the parliamentary order papers.

Closed... Chinese satellite tracking station.

Tong's administration was sponsoring a motion that sought to expel the remaining members of the Chinese Embassy on Bairiki, the administrative centre of the capital Tarawa.

There are four Chinese still occupying the concrete-walled Chinese mansion facing the ocean side of Tarawa; the embassy's cook and caretaker and their wives.

They were left behind when diplomats made a hasty return to Beijing in 2003 in protest against Tong's recognition of Taiwan.

China also closed its massive satellite tracking station near Tarawa's international airport at Bonriki.

It pulled out its doctors at the main public hospital and workers at a gymnasium it was building at Betio.

With Tong's commanding two thirds majority in the maneaba, both the motion and the national budget were easily passed.

By press time, the four Chinese were still holed up in the embassy compound and local residents were clueless as to how the government would effect their expulsion.

It is no secret that President Tong harboured strong suspicions about the remaining Chinese.

At one stage, he told a foreign news service that the four could have been spies used by Beijing to launch a diplomacy counter-attack on Taiwan and his administration.

While this has yet to materialise, islanders have seen the flood of Taipei money into the economy.

Tong's 2006 budget testifies to this since bulk of the A$49 million of its development expenditure is provided by Taipei.

There is a tightening up in the overall expenditure for 2006 as the recurrent expenditure of A$83,065,759 is $100,000 less than the 2005 figure.

But there is a big rise in the projected revenue- $68,065,750-some $7.6 million more than the previous year. The deficit is being met by a drawdown of A$15 million from the country's trust fund, which is about A$4 million less than what was withdrawn last year.

By the start of 2004, the Asian Development Bank (ADB) projected Kiribati's trust fund known as the Revenue Equalisation Reserve Fund (RERF) at A$513.3 million, which means that the annual drawdown of the Tong administration had been kept at a marginal 3% to 4%.

Opened in 1956 with royalties from phosphate mining on Kiribati's Ocean Island, the fund is recognised as one of the best managed in the region.

“Due to its large foreign holdings in the RERF, Kiribati is a net creditor nation and enjoys a strong international financial position,” an ADB assessment noted.

“The large income from RERF makes it possible for the government to buffer the year-to-year movements of the current account and to cover deficits on fiscal balance.

“Investment income from RERF together with fishing licence income and workers' remittances makes GNP almost double the GDP,” observed the bank.

Another ADB report on financial sector development, published in 2001, said Kiribati's fund is managed by a custodian company and “is well diversified with around 50 percent of its holdings in United States and Australian dollars, and the remainder in a number of other currencies.

“Fifty percent of the portfolio is held in stocks and 50 percent in bonds,” the report added.

For the 2006 budget, revenue from fishing licences is estimated at A$31 million while remittances largely sent by hundreds of i-Kiribati who are crewing ocean-going freighters, cruise liners and Japanese fishing trawlers may total A$12 million-about 10% of the country's gross national product (GNP).

Wary of the disastrous impact of HIV/AIDS on the most productive sector of its labour force, the Tong administration has this year allocated A$20,143 for its prevention and treatment.

Kiribati has a separate budget to counter the spread of the disease. It is estimated that up to 50 people, a large number of them seamen, are now living with the HIV virus in the atoll nation.