The Role of the Tuna Fishery in the Economy of Federated States of Micronesia

View metadata, citation and similar papers at core.ac.uk brought to you by CORE

provided by The Australian National University PACIFIC ECONOMIC BULLETIN Focus

The role of the tuna fishery in the economy of Federated States of Micronesia

Paul D’Arcy Pacific and Asian History, Research School of Pacific and Asian Studies, The Australian National University

The Federated States of Micronesia (FSM) which seek to ‘fast-track’ the process by inherited an environmentally fragile and grafting modern western institutions onto somewhat arbitrary base for nationhood that islander societies. These problems and bears little resemblance to its inhabitants’ proposed solutions are not limited to FSM, usual spheres of interaction during but have wider applicability across much of millennia of occupation of the region. FSM Oceania. has a small population scattered across a myriad of islands whose land area is far smaller than the tuna-rich area of ocean FSM today encompassed within its territorial waters. It is perhaps not surprising then that FSM’s FSM is oceanic in nature and outlook. It fisheries have been seen by many as the main stretches 2,900 kilometres from east to west hope for its economic future. This issue has and embraces an exclusive economic zone become all the more urgent in recent years of 2,978,000 square kilometres, yet its 607 with the signing of a new agreement that will islands amount to only 702 square kilometres see funding by the United States gradually of land. Most of the islands are small, low diminish until 2023. The search for viable lying and uninhabited. The population was alternatives to its past and current reliance estimated at 108,000 in 2005, living on 65 on US funding has now become the central islands spread across four states: Yap, Chuuk issue in FSM. (formerly Truk), Pohnpei and Kosrae. While fisheries are an important asset Approximately 53,500 people live in Chuuk for FSM, other economic options offer State, 34,600 in Pohnpei, 11,200 in Yap and perhaps greater promise, while the 7,880 in Kosrae. The literacy rate is estimated modification of existing Carolinian at 89 per cent, while life expectancy is 68 institutions offers a more effective and years for men and 71 years for women. The possibly less disruptive means of achieving population is predominantly Christian, economic independence and modernity and roughly evenly divided between Protestants a sustainable fishery than other solutions, and Catholics. English is widely, but not

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

universally, spoken to greater or lesser important policy problematic. Yet, any degrees, alongside local Carolinian consolidation would leave outer islanders, languages (Australia 2006; New Zealand in particular, under-represented or possibly 2006; Lal and Fortune 2000; Crocombe 2001). even unrepresented (Australia 2006; New FSM has an independent, constitutional Zealand Ministry 2006; Lal and Fortune government in free association with its former 2000; Crocombe 2001). colonial administrator, the United States. This Environmental and economic fragility status came about when it entered into a are major concerns. The majority of the Compact of Free Association with the United world’s typhoons pass through the territory States in 1986. The FSM government is of FSM along a corridor known as ‘typhoon structured on an American-style constitution alley’. The low-lying atolls that make up the that divides power between an executive majority of FSM’s islands are particularly branch, a legislative branch and a judicial vulnerable, but even large high islands such branch. As is perhaps appropriate for such a as Pohnpei can suffer significant damage scattered population, the government is from powerful winds and storm waves and effectively a federation of states with power salt-water inundation of crops (Lobban and divided between a single-chamber federal Schefter 1996; Alkire 1978). The alignment legislature based in Palikir, Pohnpei, and the of the islands of FSM means that many can four state legislatures. All five legislatures be affected by the same typhoon. When consist of elected representatives and each Typhoon Owen crossed Chuuk and Yap state has its own constitution and governor. States in November and December 1990, the State governments retain considerable power atolls of the Hall Islands, Namonuito, Pulap, and influence, particularly over budgetary Satawal, Lamotrek, Elato, Ifalik and Woleai matters (Australia 2006; New Zealand 2006; lost more than 90 per cent of their dwellings Lal and Fortune 2000; Crocombe 2001). and food crops, while Faraulep, Ulithi and The unicameral federal legislature is Chuuk had up to 30 per cent of the human known as the National Congress and infrastructure destroyed (Lobban and consists of 14 members. Each state elects one Schefter 1996). senator to the National Congress for a four- The provision of transport and services year term, while the remaining 10 members to such a scattered population is expensive represent single-member districts and serve and the very real danger of storm damage two-year terms. The latter are population- must be a consideration for those in charge based districts covering approximately of developing infrastructure on low coral 10,000 people each so that five are in Chuuk, islands. It is worth noting in this regard that three in Pohnpei and one each in Yap and super-typhoon Pongsona, which struck Kosrae. The 14 members of congress elect a Guam in 2002, caused more than US$226 president and vice-president, who must million worth of damage. Rebuilding and come from different states. Cabinet is compensation was enabled only by the nominated by the president, subject to United States government agreeing to cover congressional approval. Spreading 90 per cent of the cost (Marsh-Kautz 2004). representation across this vast fragmented The post-World War II economy of the electorate does have its disadvantages: there region has been heavily dependent on is a relatively high ratio of politicians to American funding. In 1947, the United States electors and the diffusion of power between became the administering authority of most legislatures and the lack of national political of formerly Japanese-controlled Micronesia parties makes the rapid implementation of under a trusteeship with the United Nations

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

Security Council. In 1979, Pohnpei, Chuuk, created a dual economy. One part is urban Yap and Kosrae ratified a new constitution and dominated by the government sector, to become the Federated States of Micronesia. with little private sector development. FSM signed a Compact of Free Association Government employs more than half of the with the United States in November 1986, workforce despite a campaign of public signalling its transition to an independent sector rationalisation in the 1990s, and nation. Under the terms of the compact, FSM government salaries account for more than controlled all domestic and foreign policy half of GDP. The other part is a rural and with the exception of defence and security, largely subsistence economy. which remained under United States control. Fishing and tourism are generally seen The Compact included provision for as the best options for generating income to substantial direct financial assistance for make up the shortfall arising from the development for its duration, from 1986 to reduction in United States funding. FSM 2001. This amounted to just less than US$100 exported a little over US$18 million worth of million a year when combined with other US copra, fish, bananas, black pepper and aid, and formed the bulk of the nation’s garments in 2004, with fish exports making income (Australia 2006; New Zealand 2006; up 80 per cent of total exports. FSM also earns Lal and Fortune 2000). about US$20 million a year in fishing licence A new Compact came into force in 2004 fees for foreign vessels from Taiwan, Japan, after extensive negotiations between FSM South Korea and the United States to fish in and the United States. Under the new terms, its exclusive economic zone. Tourist annual grants from the United States would attractions such as World War II wrecks for gradually decrease in size until they end in divers to explore and the ancient stone 2023. The United States has undertaken to settlement of Nan Madol on Pohnpei attract provide the equivalent of US$1.8 billion to about 15,000 visitors a year, mainly from East FSM during this period. Compact funds are Asia. Limited hotel rooms and other tourist to be disbursed as grants to six sectors: infrastructure on top of poor air services pose education, health, infrastructure, public real barriers to expanding tourism income. sector capacity building, private sector These potential large revenue earners must development and the environment. A trust not only fill the shortfall created by the fund has also been established to provide a reduction of American funding, they must continuing source of revenue after Compact make up the difference between imports and funding expires in 2023. The FSM exports if current patterns continue. Imports government contributed US$30 million to the were almost 10 times the value of exports in trust fund in 2004. After 2007, the US 2004 (Australia 2006; New Zealand 2006; contribution will consist increasingly of United States 2006). contributions to the fund as its direct grants diminish accordingly. A joint US-FSM committee, consisting of three United States Future directions and two FSM members, will oversee and monitor the use of the grants and trust funds The stated aim of the United States in the (Federated States of Micronesia 2003). new compact is to promote ‘the economic Funding arrangements to date, advancement and budgetary self-reliance of combined with FSM’s fundamental problems the Federated States of Micronesia’ of smallness of scale, remoteness from (Federated States of Micronesia markets and a scattered population, have 2003:Preamble). Article II outlines sector-

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

specific priorities that the United States facilities, roads, sea walls and renewable considers to be the most effective way to energy options. Inter-island air and sea achieve these ends. Education and health are transport are not mentioned specifically. seen as priorities. A quality basic education In June 2006, the United States covering primary through to tertiary Government Accountability Office released education is advocated, but one that is a report on the prospects for success of the appropriate for FSM’s needs. Attempts Compacts with the FSM and the Republic of should be made to make education relevant the Marshall Islands as it is required to do to the needs of the economy, including under the terms of the Compacts. Although vocational training. The health sector should acknowledging that the new Compacts were focus on preventative, curative and still in their early days, the report found major environmental health, emphasising governance problems acting as barriers to the community-based care, with hospitals as a achievement of the above aims, particularly secondary back-up. Attention is to be given a lack of government consensus and to improving the training of staff in the health communication. The US Government and education sectors. Accountability Office saw only limited Emphasis should also be placed on potential for self-reliance and long-term developing a private sector by removing advancement, with few economic policy barriers to external foreign investment and reforms implemented and about two-thirds promoting indigenous enterprises, of public sector expenditure still funded by particularly in fisheries, tourism and external grants (United States 2006). It was agriculture. The primary means for promoting felt that private sector investment was being these goals are seen to be legal provisions, deterred by overly complex and confusing privatising government activities, developing tax regulations and administration, and by citizens’ entrepreneurial skills and utilising the complexities of traditional land tenure new telecommunications technology. Those systems for investors wanting to gain access elements of government not privatised should to land for business purposes (United States become more transparent and accountable, 2006). and greater attention needs to be paid to the A few months later, in a meeting in enforcement of laws and regulations. Honolulu, David Cohen, deputy assistant Curbing terrestrial and aquatic secretary for the US Department of the Interior’s environmental degradation through effective Office of Insular Affairs, urged FSM officials to legal and planning regimes is also pursue sustained economic growth for their highlighted, with FSM governments long-term economic viability. Cohen stated that encouraged to work alongside non- there was only one option to achieve this. governmental organisations, FSM citizens First and foremost, sustained and traditional chiefs. The last of the six economic growth means sustained priorities, infrastructure, is designed private sector economic growth. The primarily to assist the effective development public sector-dominated economies of of health, education and private sector the RMI and the FSM are heavily initiatives. Infrastructure supporting dependent upon foreign aid…Only the educational and health facilities is given private sector can create new wealth priority, including clean water supplies and and therefore, only the private sector safe waste disposal. Facilities seen as can provide the engine necessary for particularly beneficial for economic sustainable economic growth (Casas development include airport and harbour 2006:1).

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

The lessons of history inasmuch as fishermen are poorly paid, subject to cramped and even Unfortunately, practical experiences in FSM squalid conditions on the boat, and and elsewhere in the Pacific suggest that the expected to spend nearly all their time seemingly sound economic principles fishing even if this means neglecting espoused above will not succeed, and might other social and cultural obligations even cause more harm than good. They are (Hezel and Lightfoot 2005:8). more principles to aim towards in the long- Private sector involvement should therefore term than practical, immediately applicable be encouraged, particularly by those willing methods that will allow their advocates’ aims to be based wholly or partly in the FSM and to be achieved in the near future by under- willing to bear the financial risks involved. prepared and under-financed Carolinians. While attempts to establish a domestic tuna The tuna fishery industry is usually fleet in the 1990s were costly, they created a celebrated as FSM’s best chance of creating a solid core of local businessmen and fishers viable domestic income stream worth experienced in the ways of the modern tuna potentially hundreds of millions of dollars. industry, which might serve as a foundation The FSM government embraced this for future enterprises. opportunity enthusiastically when Compact The record for tourism in the FSM also funds became available and financed a appears discouraging. Despite a number of number of domestic fishing ventures. Eleven attempts to boost tourism, visitor numbers government-financed fishing ventures were have remained relatively constant for the past established in the 1990s at a cost of US$65 20 years at about 15,000 to 20,000 a year. New million. Yet, they collectively made a profit hotels, airport improvements, visitor bureaus in only one year of just US$20,000, and ran and tourism web sites have all been up more than US$27 million in losses. attempted, with only limited success. Reflecting on this experience, Hezel and Distance from markets, poor international Lightfoot (2005) note that FSM authorities are access and a general lack of readily accesible perhaps best to focus on the lower-return but white sandy beaches like those of Guam and less risky strategy of relying on licence fees Saipan continue to deter visitors (Hezel and and trans-shipment profits rather than direct Lightfoot 2005:9–10). It makes little sense for participation. They point out that FSM to develop poor copies of the tourist [t]he fishing ventures in FSM were facilities available in Saipan or Guam. subject to the vicissitudes of the market Economies of scale mean that these places and the influence of many factors that are better equipped than FSM to ride the could not be seen clearly at the time. highs and lows of tourist demand. The We recognise more clearly now that Commonwealth of the Northern Mariana tuna is an international commodity and Islands (CNMI) and Guam have suffered that the fishing industry is highly enormous drops in income as a result of competitive and high-risk. It operates slumps in tourist numbers in recent years on small margins of profit and requires (Marsh-Kautz 2004; Eugenio 2006). large economies of scale; the fishing The fact that Palau generally receives up fleets must be flexible and mobile, to 100,000 tourists a year, the CNMI hosts always ready to move when more than 500,000 visitors a year and Guam circumstances demand. Furthermore, more than a million does offer the possibility we can not assume that island people of piggy backing on these attractions by niche will be willing to serve on fishing boats marketing FSM’s distinct features, such as

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

Nan Madol, or the fact that it is relatively absorbed within the robust private sector undeveloped and off the beaten track. Hezel that the compact seeks to develop. Otherwise, et al. (1997) caution against relying on they will have to rely on the support of kin or ecotourism, pointing out that it works only re-enter the economy of their home with low visitor numbers. It offers a communities. supplementary income for certain local communities rather than a viable substitute for FSM to replace United States A sea less travelled: combining contributions. In this way, the relatively low the old and the new returns do not require high initial costs to develop infrastructure and money goes Ironically, perhaps the best medium for directly to a community in what amounts to modernising FSM is one of the oldest and a significant cash dividend for those specific most enduring institutions: geographically communities. In contrast, the United States extended kin groups, which combine highly Government Accountability Office report localised affinities with regional suggests there is a market for a few worldviews. The view that traditional expensive resorts catering to high-end institutions are barriers to progress pervades tourists drawn by the relatively untapped much development literature. They can be, nature of much of FSM (United States but are not intrinsically so. Alternative 2006:25). strategies, patterns and practices used Reform of government is another elsewhere in Oceania offer viable options concern to be addressed. The main themes that modify the conventional economic model promoted have been curbing corruption brought into question above and play to the through greater accountability and strengths of Micronesian societies that have transparency in government operations worked since the dawn of time, which (Larmour and Barcham 2005; Hill 2004; continue to work and which offer the best Hezel 2004), and cutting the public sector hope for future self-sufficiency and relative to reduce the large share of public sector prosperity. salaries in the budget. President Urusemal In his 1994 article ‘Our sea of islands’, has made transparent and accountable Tongan scholar Epeli Hau’ofa made a governance the priority of his passionate and articulate islander-centred administration. Much of FSM’s corruption response to the ‘basket case’ MIRAB has centered on Chuuk State, which is stereotype used to describe many of the bankrupt and heavily in debt through smaller nations of contemporary Oceania. mismanagement. There are already MIRAB refers to the main funding sources of encouraging signs that the epicentre of the these economies: migration, remittances, aid problem is being reformed. The FSM and bureaucracy. The MIRAB image is one Executive Branch charged then-Speaker of tiny, non-viable economies forever Jack Fritz with abuse of funds, and he condemned to dependency on aid from resigned soon afterwards. President former colonial powers (Bertram and Watters Urusemal has expressed optimism that 1985). This rather gloomy prognosis Chuuk might reform its ways with the recent pervades many of the prescriptions for election of Governor Wesley Simina economic advancement in Oceania just (Johnson 2005). Government cutbacks are reviewed. another issue. Presumably, those public Hau’ofa argues that these ‘basket cases’ servants laid off by governments can be were the result of barriers created by colonial

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

boundaries and policies that imposed an exchanged. The social ties forged by such artificial sense of isolation and separation relationships could be called on in times of on islanders. Islanders must now decolonise need, such as drought or the aftermath of their minds and recast their sense of identity storms (Alkire 1978). It is worth recalling that by rediscovering the vision of their ancestors, most of typhoon alley lies within the for whom the Pacific was a boundless sea of boundaries of FSM. It is therefore not possibilities and opportunities. Hau’ofa surprising that many clans had members on asserts that a number of islands, on whom kin could call [t]he world of our ancestors was a large in times of need. Although colonial rule sea full of places to explore, to make imposed problematic boundaries and their homes in, to breed generations of restricted travel, it did not destroy these links. seafarers like themselves…Theirs was In my lifetime, anthropologist William Lessa a large world in which peoples and recorded that the Mongolfach clan still had cultures moved and mingled, members on 10 atolls from Ulithi to Puluwat, unhindered by boundaries of the kind and beyond to the high islands of Chuuk erected much later by imperial powers Lagoon (Lessa 1980; Alkire 1965; Alkire (Hau’ofa 1994:153–4). 1977). Then, as now, blood links mattered as much as territorial residence. While many scholars have expressed These clans form a solid social base that admiration for this image, few have seen that has weathered centuries of tough it carries any practical implications for environmental conditions and multiple resolving problems faced by modern Pacific colonial rulers. They have centuries of island nations. They are wrong. Hau’ofa’s experience of dealing with having significant image of the pre-colonial Pacific is numbers of their group off-island and are especially true for the island communities therefore perhaps ideally suited to adapt now contained within FSM’s borders, and once more to the increasing trend of large- the cultural and historical patterns of scale out-migration from FSM. Those interaction and organisation are highly heading to Guam follow in the footsteps of compatible with the stated goals of their ancestors, who made annual trade development specialists and offer proven, visits to Guam along Mutau-uol, a 756km enduring frameworks to help bring about seaway, or settled on the high island of Saipan these goals. Carolinians have successfully to escape typhoons and tsunami (Alkire adapted to one of the most challenging 1965; Barratt 1988; Farrell 1991). environments on the planet by creating Despite the generous access to US flexible cultural institutions that have seen territory provided by the new Compact, them through typhoons, tsunami, Western Carolinians still face prejudice and epidemics and world war—far greater institutional barriers in taking their first step challenges than those they currently face. to access the US job market. The governments Before colonial rule, islanders travelled of Guam and the CNMI have complained regularly between islands for economic, about the added burden they carry in being political and social reasons. Goods were the first port of call for Micronesian migrants, exchanged on a regular basis. These and CNMI authorities went as far as trying exchanges were as much about forging and to formally restrict entry for other reinforcing social and political relations as Micronesians in the late 1990s, even though they were about supply and demand. The they are entitled to enter under the terms of process mattered as much as the goods the Compact. The United States provides

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

monetary compensation to both governments an FSM citizen within the FSM, its citizens in recognition that they bear a are finding 10 others outside the country disproportionate cost to other parts of the (Hezel and Lightfoot 2005). This United States in catering for these new substantially reduces the number of unpaid arrivals seeking access to superior health, relatives per individual employed kin within education and job opportunities (Crocombe the FSM who might need to call on kin links 2001). for support. Working on the figure of 30 per When they first arrive, many Carolinians cent of FSM migrants being employed, Hezel tap into support networks of resident kin. and Lightfoot note that if each of the 8,000 The recent United States Government sent home just US$1,500 each year to family Accountability Office report on FSM notes and kin, this would equate to US$12 million. that the number of migrants is unknown, as This is about the same amount that FSM is the amount of remittances sent back to kin currently obtains from fishing licences (Hezel in the FSM. The report did, however, caution and Lightfoot 2005). Other data suggest that that 2003 United States census data revealed this is a conservative figure. Remittances that 45 per cent of the 17,286 FSM migrants make up 25–45 per cent of Western recorded in Hawai’i, Guam and the CNMI Polynesian nations’ GDP, and the United were living below the poverty line, arguably States Government Accountability Office limiting the amount of discretionary income employment figures for FSM migrants in available to be sent home. Forty-seven per Guam cited above are well above Hezel and cent, however, were employed and only 21 Lightfoot’s 30 per cent figure. Even taking per cent were unemployed (United States these factors into account, current annual 2006). The recent announcement that the US remittances are still probably well short of military presence on Guam will be increased the amount received from the United States substantially means more employment through the Compact. opportunities will soon be forthcoming The FSM government can help realise the (Pacific Daily News 2006). full potential of remittances by ensuring FSM Official figures, however, underestimate citizens overseas do not lose voting and land the extent of overseas migration and the rights back home, thus reinforcing their links contribution of remittances and extended with kin, homelands, home seas and opportunities to the FSM economy. Drawing ancestors. They should also alter their on official and unofficial information educational priorities to take these patterns gathered during decades of living in FSM, into account. The new Compact’s emphasis Hezel and Lightfoot estimate that about on vocational training, while well 30,000 FSM citizens now live overseas. This intentioned and necessary to a certain degree, represents 25 per cent of the population. Only is perhaps inappropriate for the 50 per cent about 60 new paid positions are created each of high school graduates who leave FSM for year in FSM due to cuts to government opportunities overseas in economies that funding and the failure of the private sector have moved beyond primary production to to take off. service-related industries as part of a global A 1998 survey of migrants to Hawai’i trend. Interestingly, the best-educated FSM found that 30 per cent of new migrants found citizens tend to return home eventually, work. Applying this figure to the 2,000 FSM spurred on by the fact that they can obtain citizens who migrate annually equates to 600 good jobs in FSM (Hezel and Lightfoot 2005). new positions going to FSM migrants each Every skilled worker who returns adds year. In other words, for every job created for momentum to the FSM economy along the

Pacific Economic Bulletin Volume 21 Number 3 November 2006 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Focus

lines that the new Compact seeks to organised around a combination of encourage. Once critical mass is reached, the subsistence activities and cash crops. desired goal of a robust private sector might Pacific island societies are communal emerge. Such a modern private sector need and competitive by nature. Examples not be divorced from the subsistence abound throughout colonial and modern economy of many of today’s FSM citizens. history of indigenous groups drawing on the There is a more seamless transition between strengths of traditional ways to adjust to new traditional ways and modernity already circumstances and successfully competing taking place elsewhere in Oceania, which is against external ‘market forces’. The example worth considering for the FSM. of the New Zealand/Aotearoa iwi (tribe) Kin groups have much to recommend Ngai Tahu is particularly germane. There are them as financial and modernising units. 41,496 Polynesian New Zealanders who Direct payments to them or into kin-based classify themselves as Ngai Tahu. They have trust funds would put money directly in the been recognised as an ‘iwi authority’ by hands of the local communities they target. government and must be consulted by Such groups are a vibrant, coherent and government over resource management enduring element of civil society, which has matters in their legally defined rohe (tribal great potential but which is often overlooked. territory). Tribal members are spread across Larmour and Barcham (2005) recommend most of New Zealand and beyond, and the use of non government organisations and encompass rural and urban communities. civil society groups to promote government Ngai Tahu is a legally recognised charitable accountability and to extol the virtues of trust for the purposes of governance and small entities as units working against administration of its financial matters, corruption because of the intimate familiarity balancing traditional concerns with modern of those within the group and the shame business practices. Thus, the board consists connected with stealing from relatives. This of representatives from each of the 18 reallocation of funds would also mean that traditional regional sub-groups comprising there is less in government coffers to tempt Ngai Tahu, but is headed by a progressive corrupt officials. It is easier to detect loss in a and dynamic CEO, Tahu Potiki, and also smaller amount of funds and there is less employs a chief financial officer. Important money to skim off beyond that needed to fulfil decisions are made only after extensive minimum requirements. Political parties are consultation, and much of the iwi’s financial also seen as good mechanisms for status and policy debates are carried on its accountability (Larmour and Barcham 2005). web site to increase access and transparency In the absence of national political (http://www.ngaitahu.iwi.nz; Te Puni parties in the FSM, extended kin groups Kokere 2006). New Zealand’s Minister of whose collective interests extend beyond Finance Dr Michael Cullen, has labelled Ngai state issues have an important role to play in Tahu’s approach to their economic this regard. Based on an affluent subsistence development and social advancement ‘social economy centred on a booming but entrepreneurialism’ (Cullen 2006). underestimated agricultural sector (Hezel In the late 1990s, Ngai Tahu appointed a and Lightfoot 2005; Hezel et al. 1997) and highly representative Vision Focus Group to control of inshore fisheries, kin groups reach create a vision of where the iwi might be in beyond state and national borders, linking 25 years so they could start thinking about internal and external migrants in the modern developing priorities and strategies to private sector back to kin and localities achieve these goals. The web site carries the

vision and invites feedback so that the corporate control by kin groups, which held document is transparent and constantly sections of the land, lagoon and reef. These evolving, as is the iwi and the conditions it sections were then allocated to households. faces. Given that the new Compact will also Ulithi in the Western Carolines has probably end about this time and that it has the most thoroughly studied system of atoll established a trust fund to replace United sea tenure. Postwar studies by Lessa and States grants, it is worth noting that Ngai Tahu Sudo (Lessa 1966; Sudo 1984) found that 2025 contains a section on investment Ulithi’s lagoon was divided into large district planning. This section details how Ngai blocks, with the most powerful lineage in the Tahu started with a NZ$30 million Crown district controlling access to all resources Settlement in 1998 and has increased its within it. The lagoon was divided into 14 tribal equity substantially since then, largely lagoon sections and 18 reef sections. Maps through astute financial management and of marine tenure on Ulithi and most other sound investments. It will be recalled that atolls show marine divisions as straight- the FSM had to contribute US$30 million to edged blocks of territory incorporating the the establishment of its trust fund. whole lagoon. Japanese ethnographer Ken- Kin groups are also a potential force with Ichi Sudo’s survey of sea tenure principles which to entrust conservation and in Micronesia revealed a remarkably exploitation of FSM coastal fisheries. The consistent pattern (Sudo 1984:226–7). Groups Pacific 2020 background paper on fisheries hold access rights by virtue of their recommends improving coastal fisheries membership of social groups, although management through community ownership is vested in groups ranging from involvement (Clark 2006). As well as families up to the community as a whole. The monetary benefits, local participation in smaller the basic tenure group, the more inshore harvesting provides protein sources, subdivided the inshore fisheries. import substitution for costly processed Few claims of traditional tenure are foods and local management of marine recorded in areas out of sight of land or the areas. Kiribati is developing a variety of range of shore-based sea birds. The most initiatives to expand its near-shore resource detailed studies for Oceania come from the base, which FSM might wish to emulate. western half of FSM, where the sea is crowded These include tapping into the specialist with fishing banks, reefs and smaller, aquarium-fish market, seaweed and pearl uninhabited atolls between inhabited atolls farming (Thomas 2003). Grafton et al. (2006) (Wiens 1962). There are 20 shoals and banks are more specific, pointing out that such between 5 degrees and 10 degrees North schemes are particularly effective if local latitude in this region. Some cover large communities have the incentive to manage areas. Mogami and Gray Feather Banks, for the resource effectively through uncontested example, are 48 kilometres and 80 kilometres ownership and by receiving benefits from the in diameter. They are only 1.6 kilometres apart harvest of the resource. Management is most and combine to form a large sea marker 80 effective when there are group rights that lead kilometres west of Namonuito Atoll. Such to collective community action (Grafton et al. conditions promoted offshore sailing and 2006; Hviding and Baines 1992). fishing. Gladwin (1970), for example, The FSM is particularly well equipped mentions that the inhabitants of Puluwat to undertake such a strategy through having Atoll used to place huge fish traps on Uranie in place detailed traditional maritime tenure Bank, a broad reef that extends 32 kilometres regimes. Resource tenure was based on to the east of the atoll. Each canoe house

placed its own fish traps in the area of the References reef reserved for it. Such offshore tenure means that a strong Alkire, W., 1965. Lamotrek Atoll and Inter- case for a stake in tuna proceeds can be made, Island Socioeconomic Ties, University of particularly by outer islanders. Rather than Illinois Press, Urbana, Illinois. create privileged access for outer islanders ——, 1977. An Introduction to the Peoples and only, however, a more equitable and Cultures of Micronesia (second edition), workable solution is that practised in New Cummings Publishing Company, Zealand, where all kin groups are given a Menlo Park, California. share of fishery access (Webster 2002). Outer- island sea tenure creates a strong case for ——, 1978. Coral Islanders, AHM the disbursement to kin units of at least some Publishing Corporation, Arlington of the funds generated from tuna sales. Tuna Heights, Illinois. trust funds such as those advocated recently Australia 2006. Country Information, by Parris and Grafton (2006) are perhaps a Federated States of Micronesia, good option. In this way, recipients become Department of Foreign Affairs and stakeholders in the preservation of the tuna Trade, Canberra. Available from http:// fishery and associate part of their financial www.dfat.gov.au/geo/fsm/fsm well-being with the health of this fishery _brief.html rather than merely as part of a larger Barratt, G., 1988. Carolinian Contacts with undifferentiated hand-out from government. the Islands of the Marianas: the European Perhaps the greatest benefit of the kin record, Department of Community and corporation model is psychological rather Cultural Affairs, CNMI Government, than economic. A politically and Saipan. economically independent people is still the Bertram, G. and Watters, R.F., 1985. ‘The ultimate objective, but here it is achieved by MIRAB economy in South Pacific acknowledging what is good and admirable microstates’, Pacific Viewpoint, 26:497– in Pacific cultures rather than seeking to 519. remove perceived barriers and introduce new governance structures. Change comes Casas, G.Q., 2006. ‘Cohen: Micronesia from within and more on the terms of must become self-sufficient’, Marianas islanders themselves. By acknowledging Variety, 4 September. what is strong and enduring in Pacific Chand, S.G., Grafton, R.Q. and Petersen, E., cultures and seeking to work within proven 2003. ‘Multilateral governance of mechanisms, we accept that enduring fisheries: management and cooperation change only ever comes voluntarily from in the western and central Pacific tuna within. I am optimistic that Carolinians and fisheries’, Marine Resource Economics, other islanders will rise and adapt to this 18:329–44. challenge. Thousands of years of Pacific Clark, L., 2006. Pacific 2020 Background history permit no other conclusion. Paper: Fisheries, January, Commonwealth of Australia, Canberra. Crocombe, R., 2001. The South Pacific, University of the South Pacific, Suva. Eugenio, H.V., 2006. ‘CNMI business revenue drop 14 percent’, Marianas Variety, 4 September.

Farrell, D., 1991. A History of the Northern Transparency International and the Mariana Islands, CNMI Government, Asia Pacific School of Economics and Saipan. Government, The Australian National Federated States of Micronesia, 2003. University, Canberra. Available from Compact of Free Association, As Amended, http://www.transparency.org/ Between the Government of The United documents/fedstatesmicronesia.pdf States of America And the Government of Hviding, E. and Baines, G.B.K., 1992. the Federated States of Micronesia, 2003. Fisheries Management in the Pacific: Available from http:// tradition and the challenges of development pidp.eastwestcenter.org/pireport/ in Marovo, Solomon Islands, United special/cofa_special.htm Nations Research Institute for Social Federated States of Micronesia Joint Development Discussion Paper 32, Committee on Compact Economic March, UNRISD, Geneva. Negotiations, n.d. FSM and US Sign Jacobs, M., 2002. ‘Spoiled tuna: a fishing Agreement on Compact Negotiation. industry gone bad’, Micronesian Available from http://www.fm/jcn/ Counselor, 40(15 February). index.htm Johnson, G., 2005. ‘Can the FSM sort itself? Gillett, R., 2001. ‘Tuna underwrites FSM Chuuk and slow development are the economy’, Pacific Magazine, 22 (April). challenges’, Pacific Magazine, 1 August. Gladwin, T., 1970. East is a Big Bird: Available from http:// navigation and logic on Puluwat Atoll, www.pacificislands.cc/issue/2005/ Harvard University Press, Cambridge, 08/01/can-the-fsm-sort-itself Massachusetts. Lal, B.V. and Fortune, K., 2000. The Pacific Grafton, R.Q., et al., 2006. ‘Incentive-based Islands: an encyclopedia, University of approaches to sustainable fisheries’, Hawai’i Press, Honolulu. Canadian Journal of Fisheries and Aquatic Larmour, P. and Barcham, M., 2005. Sciences, 63:699–710. National integrity systems in small Pacific Hau’ofa, E., 1994. ‘Our sea of islands’, The island states, Asia Pacific School of Contemporary Pacific, 6(1):148–61. Economics and Government Discussion Paper 05-9, The Australian National Hezel, F.X. and Lightfoot, C., 2005. ‘Myths University, Canberra. of the FSM economy’, Micronesian Counselor, 59(24 November):1–20. Lessa, W.A., 1980. More tales from Ulithi Atoll: a content analysis, University of Hezel, F.X., 2004. ‘Micronesian California Press, Berkeley. governments: a view from the outside’, Micronesian Counselor, 55, (1 April):1–10. Lobban, C.S. and Schefter, M., 2001. Tropical Pacific Island Environments, University of Hezel, F.X., Edwin, S.J., Petteys, Q.P. and Guam Press, Mangilao, Guam. Chang, D.L., 1997. Sustainable Human Development in the FSM, Micronesian Luthria, M. and Dhar, S., 2005. Pacific 2020 Seminar, Kolonia, Pohnpei. Available Background Paper: Framework for Growth, from http://www.micsem.org/pubs/ December, Commonwealth of Australia, articles/economic/shd/chapter05.htm Canberra. Hill, E.R., 2004. National Integrity Systems: Marsh-Kautz, K.G., 2004. ‘Guam’, Political Transparency International country study Reviews Section, The Contemporary report: Federated States of Micronesia, Pacific, 16(1):120–6.

New Zealand, 2006. Micronesian Political, World Bank, 2006. At Home and Away: Economic and Relationship Country Paper, expanding job opportunities for Pacific Federated States of Micronesia Country Islanders through labor mobility, World Paper, March. Ministry of Foreign Bank, Washington, DC. Available from Affairs and Trade, Wellington. http://web.worldbank.org Available from http:// www.mfat.govt.nz/foreign/regions/ Acknowledgments pacific/country/micronesiapaper.html This paper was originally presented at the Ngai Tahu Vision Focus Group, 2006. Ngai Fisheries Economics Management and Tuna Tahu 2025 Draft. Available from Management Workshop for the Pacific www.ngaitahu.iwi.nz (accessed 20 Islands, The Australian National University, September 2006). 25 and 26 September 2006. The workshop Pacific Daily News, 2006. ‘Guam must get was hosted by the Crawford School of house in order for military buildup’, Economics and Government with the Editorial, 15 September. support of the Australian Agency for Parris, H. and Grafton, R.Q., 2006. ‘Can International Development (AusAID). tuna promote sustainable development in the Pacific?’, The Journal of Environment and Development, 15(3):1– 32. Te Puni Kokere, 2006. Te Kahui Mangai— Ngai Tahu. Available from http:// www.tkm.govt.nz/Iwi.aspx?id=87 (accessed 20 September 2006). Thomas, F.R., 2003. ‘Fisheries development in Kiribati: sustainability issues in a “MIRAB” economy’, Pacific Studies, 26(1/2):1–36. United States, 2006. Compacts of Free Association: development prospects remain limited for Micronesia and Marshall Islands, Report to Congressional Committees GAO-06-590, June, Washington, DC., Government Accountability Office. Available from www.gao.gov/ Webster, S., 2002. ‘Maori retribalization and treaty rights to the New Zealand fisheries’, The Contemporary Pacific, 14(2):341–76. Wiens, H.J., 1962. Atoll Environment and Ecology, Yale University Press, New Haven.