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Pacific Islands: Fiji New Caledonia Samoa Solomon Islands Tonga Vanuatu COUNTRY REPORT Pacific Islands: Fiji New Caledonia Samoa Solomon Islands Tonga Vanuatu March 2001 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1007 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: http://www.eiu.com Electronic delivery This publication can be viewed by subscribing online at http://store.eiu.com Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, online databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office London: Jan Frost Tel: (44.20) 7830 1183 Fax: (44.20) 7830 1023 New York: Dante Cantu Tel: (1.212) 554 0643 Fax: (1.212) 586 1181 Hong Kong: Amy Ha Tel: (852) 2802 7288/2585 3888 Fax: (852) 2802 7720/7638 Copyright © 2001 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1460-7077 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK 1 Contents 3 Summary The region 6 Outlook for 2001-02 6 The political scene 7 Economic policy and the economy Fiji 10 Political structure 11 Economic structure 11 Annual indicators 12 Quarterly indicators 13 Outlook for 2001-02 14 The political scene 16 Economic policy and the economy New Caledonia 19 Political structure 20 Economic structure 20 Annual indicators 21 Outlook for 2001-02 21 The political scene 22 Economic policy and the economy Samoa 25 Political structure 26 Economic structure 26 Annual indicators 27 Quarterly indicators 28 Outlook for 2001-02 29 The political scene 30 Economic policy and the economy Solomon Islands 32 Political structure 33 Economic structure 33 Annual indicators EIU Country Report March 2001 © The Economist Intelligence Unit Limited 2001 2 34 Quarterly indicators 35 Outlook for 2001-02 36 The political scene 37 Economic policy and the economy Tonga 39 Political structure 40 Economic structure 40 Annual indicators 41 Quarterly indicators 42 Outlook for 2001-02 43 The political scene 44 Economic policy and the economy Vanuatu 46 Political structure 47 Economic structure 47 Annual indicators 48 Quarterly indicators 49 Outlook for 2001-02 50 The political scene 51 Economic policy and the economy List of figures 14 Fiji: gross domestic product 14 Fiji: Fiji dollar real exchange rates 27 Samoa: foreign trade 27 Samoa: consumer prices 28 Samoa: gross domestic product 28 Samoa: Tala real exchange rates 35 Solomon Islands: gross domestic product 35 Solomon Islands: Solomon Islands dollar real exchange rates 42 Tonga: gross domestic product 42 Tonga: Tonga dollar real exchange rates 49 Vanuatu: gross domestic product 49 Vanuatu: vatu real exchange rates EIU Country Report 1st quarter 2001 © The Economist Intelligence Unit Limited 2001 3 Summary March 2001 The region Outlook for 2001-02 Local problems will be exacerbated by a deteriorating world outlook, with a slowdown in activity in the US, Japan and Australia. The governments that are operating offshore financial centres will come under pressure to meet international standards to counter money laundering. The political scene The small island states expressed deep concerns regarding the implications of globalisation at a regional conference in January. The Pacific Islands Forum chairman paid an official visit to Japan in February. Economic policy and the US banks banned transactions with Niue in January. The OECD has imposed a economy deadline for seven Pacific island nations to agree to the OECD harmful tax competition initiative. The Forum secretary-general has asked the OECD to withdraw or postpone the deadline. Fiji Outlook for 2001-02 The Court of Appeal has ruled that the interim government is illegal and that the country’s 1997 constitution is still valid. The president will consult the Great Council of Chiefs before announcing the way forward. If the ruling is accepted, the options are to recall parliament and form a government of national unity or to dissolve parliament and prepare for new elections. The political scene Before the appeal court ruling, the interim prime minister had said that he would accept the ruling of the court. The deposed prime minister, Mahendra Chaudhry, is opposed to forming a government of national unity and has staved off a challenge to his leadership of the Fiji Labour Party. Fiji will not host the Pacific Islands Forum this year. Economic policy and the The Reserve Bank of Fiji has confirmed its estimate that the economy economy contracted by 8% in 2000. The interim government has announced a commitment to simplifying the process of approving foreign investment proposals. Investors are reported to be interested but cautious. Official figures have indicated a continuing slump in the tourism industry. New Caledonia Outlook for 2001-02 The economic outlook looks positive following a big boost to the economy in 2000 from a booming nickel industry and tourism. However, nickel prices are forecast to be lower in 2001 and 2002. Political activity has centred around the EIU Country Report March 2001 © The Economist Intelligence Unit Limited 2001 4 local government elections in March, but Jacques Lafleur is in the spotlight after he supported the expulsion from his party of a close ally. The political scene Mr Lafleur met the French president, Jacques Chirac, in January and reported that “things were going well on the whole”. The mayor of Païta, Harold Martin, has been expelled from his party, the Rassemblement pour la Calédonie dans la République (RPCR), after deciding to contest the local government elections as an independent. Economic policy and the The 2001 budget has been approved but with major opposition to the new tax economy measures. Exports and imports grew strongly in 2000 and inflation rose to average 2.3%. Tourist numbers improved after a poor start in 2000. Agence Française de développement has approved a loan of more than CFPfr2bn (US$16m) for infrastructure development in the country. Samoa Outlook for 2001-02 The governing Human Rights Protection Party (HRPP) lost seats at the election on March 2nd but still looks like emerging as the winner. The final shape of the government will be determined by the movement of independent MPs. The election was basically contested between the HRPP and the Samoa National Democratic Party. The political scene Prior to the election, the opposition leader accused the prime minister of condoning extensive corruption, malpractice and tax evasion. There were also suggestions of electoral roll irregularities. Five would-be candidates were ruled ineligible because of the controversial ruling that candidates must have lived in the country for three years prior to the election. Public service reform will be the main priority over the next two years. The reforms should improve the quality of government services. Economic policy and the The opposition leader has accused the government of using asset sales to make economy its accounts and the state of the economy appear better than the reality. Westpac Banking Corp has increased its shareholding in Pacific Commercial Bank to 85.4%. Solomon Islands Outlook for 2001-02 There are real doubts that the country will survive in its present form. The governor-general has said that parliamentary democracy is on the verge of collapse. The current government is incompetent in its domestic operations, lacks credibility abroad and is heavily in debt. The political scene A second peace agreement was eventually signed on February 7th 2001 after a delay following a local dispute in the Marau region. More than 500 stolen weapons have still not been accounted for. Further compensation claims have been refused. EIU Country Report March 2001 © The Economist Intelligence Unit Limited 2001 5 Economic policy and the According to the latest official review, production of major export commodities economy was down in the third quarter of 2000, leading to lower exports and a rundown of foreign reserves. Inflation during the quarter was expected to have risen to between 6% and 8%. The government needs more than SI$840m (US$164m) in foreign assistance to finance the 2001 budget. The central bank governor has warned of serious economic risks. Tonga Outlook for 2001-02 The prime minister has reshuffled the cabinet to achieve a better match of people with portfolios.
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