STRATEGIC ASSESSMENT 2000

4.    THE PACIFIC ISLANDS

4.1   The South Pacific, or the Pacific Islands area, as it ought more accurately to be called, is defined here as 22 jurisdictions in the Pacific - 12 independent states (all but one members of the United Nations²), two states freely associated with New Zealand, one New Zealand territory, three French and three US territories (all with a slightly different status), and one UK dependency. Papua New Guinea (PNG) is in a class of its own so far as size and population are concerned, being larger on both counts than New Zealand. All the others have populations of under a million and land areas of under 30,000 square kilometres (the size of Southland). 15 have land areas of under 1,000 square kilometres - smaller than the Chathams (see annex for charts showing populations and areas).³

4.2   Pacific island countries face a generic problem of inadequate resources - human, fiscal or economic - to deal with nation-building and developmental tasks. For some the outlook is not promising. Others are better equipped by virtue of their political, economic, natural or social circumstances.

4.3   The Pacific Islands are all developing countries. Five are classed as least developed countries (LDCs). Even those which are not exemplify the particular problems of small states. The income of the Pacific Islands is derived mostly from cash crops - trees, copra, sugar, banana; services - tourism, and recently offshore financial activities - and marine resources in their extensive EEZs. PNG has significant mineral resources. There are small manufacturing sectors in Fiji and Samoa, dependent on preferential access to the Australian and New Zealand markets. (A Pacific island free trade area, were it to be formed, would be unlikely to change this.) Eight PICs have preferential access to the European Union but the benefits of this are diminishing as general tariff levels drop. The Pacific Island countries (PICs) have sought to diversify away from traditional cash crops. This is due to their exposed market position as price takers in the context of declining world prices since the 1970s. Exceptions include the forestry and fishing industries, and where high return niche markets have been identified.

4.4   Overseas development assistance (ODA) is an important source of national income. ODA as a proportion of GDP ranges from 2% in Fiji to about 50% in the Federated States of Micronesia to close to 100% in Niue and Tuvalu. The principal aid donors are Australia, Japan, New Zealand and France (the latter's aid is mainly directed to its own territories). Remittances from expatriate communities are also an important source of income in some communities; pressures for migration will continue for this reason as well as population pressures and possibly, in future, rising sea levels. In the larger island countries significant proportions of the populations are still operating primarily within an indigenous subsistence economy.

4.5   Constraints on development are much more evident than new economic opportunities. Amongst them are paucity of natural resources (particularly in the atoll states) although some countries have large EEZs, restrictions on land alienation or the use of land as security, because of the preservation of communal land titles; limited human resources, resulting in much of the economic exploitation taking place by outside firms (on land) or foreign fishing fleets (on the sea); outflow of skilled people to Australia, New Zealand, the United States and other destinations (although the diasporas remain a significant influence in the politics and economics of many islands).

4.6   PICs will probably have continuing difficulty asserting or maintaining control of natural resources, especially marine resources, and many will have to deal with the environmental, economic and social implications of unsustainable or poorly managed exploitation of their natural resources. Ecosystems are delicately balanced, especially in the smaller islands. Most countries are vulnerable to natural disasters such as cyclones. The very existence of atoll states such as Tuvalu would be threatened by rising sea levels or by climactic changes that would increase the frequency of cyclones.

4.7   At the same time demographic pressures are increasing. Pacific islands have some of the highest population growth rates in the world. The Commonwealth of the Northern Marianas has the highest annual growth rate at 5.6% (a large component of this comes from inward migration), while several (including Vanuatu and PNG) have natural increases of between 2% and 3%. For some migration is an important safety valve, but this option is not available to all. While absolute numbers are small, urbanisation, with its accompanying problems of unemployment, increasing crime rates, pressure on services and environmental impacts is becoming a phenomenon of the Pacific. HIV/AIDS is at the beginning of its cycle in the Pacific. It is already a significant problem in PNG. Other Pacific islands have yet to feel the full impact.

4.8   Small size and limited resources do not make a strong foundation for effective government. National cohesion goes some way to compensate for this in Polynesia, where many of the political units antedate colonisation. In Melanesia national integration is not so secure. Port Moresby fears that overly generous concessions to Bougainville will spark off demands for autonomy elsewhere. In Solomon Islands the people of Guadalcanal have come to resent the influx of other islanders to the capital, Honiara, especially those from Malaita. Such conflicts of interest are not necessarily unmanageable, but they do expose weaknesses in the structures of government and can, as in Bougainville and Guadalcanal, lead all too quickly to violent conflict.

4.9   Communal issues are a particular problem in New Caledonia and Fiji, and are being handled peacefully and with much more skill than in the 1980s. But the participation in sharing of power by the indigenous peoples and other major communities (Indian in Fiji and European settler in New Caledonia) remains a source of tension. In both places these are reflected in economic issues. In Fiji the issues surrounding the expiry of leases of sugar cane land is crucial; in New Caledonia it is the economic development of the two Kanak dominated provinces as against Noumea.

4.10   Political parties are not well established; parliamentary politics are often volatile, and in many countries there is a high turnover of national leaders. This affects the durability of the programmes of economic reform and restructuring which many PICs have embraced. The impact of political change is moderated to a degree by the frequency with which the same cast of individual politicians moves in and out of office.

4.11   South Pacific states necessarily draw on a small pool of people to staff their governments and public sectors. The problem is exacerbated by traditional prejudices against women in decision-making - although urbanisation may help break these down. At community level women's political activity is considerable. The commercial business sector is in many instances dominated by non-indigenous people - Indian, Chinese or European - or by expatriate firms.

4.12   Only PNG, Fiji and Tonga maintain fully fledged armed forces, although a number of other countries have para-military units to supplement the police and France maintains military forces in New Caledonia and French Polynesia. South Pacific defence forces, where they are established, are very small by world standards and are generally equipped for maritime resource protection and internal security duties. None has any power projection capability, but Fiji has a well established practice of providing troops for United Nations peacekeeping operations. The PNG Defence Force has had bouts of politicisation, but has kept to the barracks. So have the Republic of Fiji Military Forces, despite the precedent of 1987 and the election of an Indian prime minister in 1999. In many instances it is the police forces which are the frontline element. These, while competent, are not often well enough equipped to deal with civil disturbances.

4.13   The possession by dissident groups of limited quantities of small arms (and even traditional weapons such as spears and bows and arrows) can have a disproportionate effect where government forces themselves are only lightly armed. The BRA was able to neutralise the PNGDF with a mixture of home made, sporting and military style weapons captured from the PNGDF. The militants in Guadalcanal have been able to confront the authorities armed with only traditional weapons and small quantities of sporting weapons, supplemented by some stolen police weapons.

4.14   The weakness of PIC governments is apparent in a number of ways.

• Limited revenue bases and poor governance structures provide fertile ground for scam artists and con men offering "get rich quick" schemes. A number of governments have been burnt in this way in recent years.
• Sovereignty is often for sale in one form or another.
• Governments faced with disorder may take unusual steps.
• Even where there are significant resources, the revenue is often dissipated.