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Reserve bank sets credit limit
Credit limits have been imposed by the Reserve Bank of Tonga to conserve declining foreign reserves. By the end of November 2005, reserves had fallen to 4.3 months of import cover compared with 5.4 months at the end of 2004. The bank said it expected reserves to decline through the first half of 2006, due to the impact of a 60-80% pay rise for the civil service forced on the government by a long civil service strike. The finance ministry has warned the pay increase is not sustainable and will have grave effects on the national economy, including soaring inflation rate and a serious weakening of Tonga's currency.
Another boost for PNG gas project
Oil Search's managing director Peter Botten says the Papua New Guinea gas pipeline project has taken another important move forward with a decision in January by Australian Gas Light Company (AGL) to finalise an agreement for the purchase of gas delivered to Australia by a US$4000-million pipeline from Papua New Guinea. In July 2005, it conditionally agreed to take about 1500 petajoules of gas over 20 years from start-up. It will now complete the deal, worth about US$400 million, in February instead of the second half of 2006.
Nautilus gets prospecting award
Nautilus Minerals Group's seabed prospecting effort in the Manus Basin of Papua New Guinea has earned it the Mining Journal Award for Outstanding Achievement for “greatest originality in the search for minerals”. A citation reads that exploration and research work by Nautilus “promises to open an entirely new frontier for commercial mineral development and had brought undersea mineral exploration to international attention and in particular the potential of Manus Basin”.
US$65m for development
Vanuatu expects to receive US$65.7 million in American aid from the United States' “Millennium Challenge” scheme for helping least developed countries lift their national income per capita. It is the first Pacific Island country to qualify for the scheme.
Forari resumes manganese exports
Vanuatu has resumed manganese exports from the Forari mine near Port Vila. It was abandoned by the French owners after the country became independent in 1980. Five hundred tonnes from piles of extracted manganese left by the owners were bought by an unidentified overseas buyer. The mine became state property.
PM opens Sofitel
Prime Minister Laisenia Qarase in December opened the first large resort hotel built in Fiji in the last five years. The F$70-million, 296-room Sofitel Fiji Resort & Spa is the latest of the cluster of resorts built at Denarau Island, 13 kilometres from Nadi International Airport.
It is a joint venture between Fiji's national airline Air Pacific and the Colonial financial group, and is managed by Accor, one of the world's largest hotel chains, under the brand of its Sofitel five-star flag. Air Pacific's chairman, Gerald Barrack said the airline's purpose in investing in the hotel was to relieve a growing shortage of first class accommodation that was inhibiting the airline's own growth and to be a catalyst for investment in more accommodation.
Warwick expands
Warwick International Hotels, owner of two beach resorts in Fiji and Le Lagon resort in Port Vila, Vanuatu, is prepared to invest about US$20 million in building a resort at Champagne Beach, a famous beauty spot on Espiritu Santo, according to the Vanuatu Daily Post. Warwick, an international hotel chain with a Hong Kong headquarters, is eyeing Samoa as a location for another of its hotels.
Fiji/Vanuatu trade war
A trade war between Fiji and Vanuatu over exports of biscuits to Vanuatu has been revived with a January decision by Vanuatu to put a 50% duty on imports for the protection of a local biscuit manufacturer. Fiji has just lifted a ban on imports of Vanuatu kava worth several million dollars annually after Vanuatu, acting in what Fiji complained was in contravention of the Melanesian Spearhead trade agreement, banned the importation of biscuits.
Fish Bite to farm fish
A Cook Islands company, Fish Bites Incorporation, will invest in advanced Australian fish farming techniques to grow fish for export at Aitutaki and later other locations, according to the Cook Islands News. Through a new subsidiary, Gotfish, it has bought exclusive rights throughout the Pacific Islands to technologies from McRobert Aquacultures System and hopes to open the first farm at Aitutaki later this year. Gotfish says ideally one farm should have an annual production of 100 tonnes mainly for export.
Temaru pushes tuna farming
Tuna farming plans at Hao, the former French military base in the Tuamotu Islands, are being pushed ahead by French Polynesia's Temaru government after being initiated by the former Flosse government, according to Tahitipresse. The territorial government expects to obtain French tax incentives for the estimated US$20 million enterprise. The government will own 8%, Hao's 1500 people 5%, French, Japanese and local investors are expected to put up the 87% balance.
Jobs for locals
French Polynesia intends to make laws to preserve jobs for local people by restricting employment from workers from France and other countries, according to La Depeche de Tahiti, a newspaper. They would specify a minimum term of residence, still not decided, before any person qualifies for local employment. Some jobs would be reserved for locals.
San Miguel's brewery in Saipan?
San Miguel Corporation of the Philippines, Southeast Asia's biggest public brewing and food company, intends to build a brewery at Saipan in the Northern Mariana Islands, according to governor Benigo Fitial. The brewer hopes to exploit the territory's duty free access for exports to the United States market.
Common currency unworkable
Two academics argue that a common currency for the Pacific Islands, the Australian dollar, as advocated by Australian proponents, would be “unworkable”. According to Professor T.K. Jayaraman, of the University of the South Pacific, and Chakriya Bowman, of the Australian National University, economies in the region, including Australia's, are too dissimilar to cope with the shocks that one country would impose on another.
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