PIDP Pacific Islands Development Program REGIONAL COOPERATION WITH EMPHASIS ON PRIVATE SECTOR DEVELOPMENT Proceedings of the Third Pacific Islands Conference of Leaders April 9-11, 1990 / Hawaii edited by Sitiveni Halapua Barbara Naudain Nj|/. | Pacific Islands Development Program / East-West Center REGIONAL COOPERATION WITH EMPHASIS ON PRIVATE SECTOR DEVELOPMENT REGIONAL COOPERATION WITH EMPHASIS ON PRIVATE SECTOR DEVELOPMENT Proceedings of the Third Pacific Islands Conference of Leaders April 9-11,1990 Big Island of Hawaii, Hawaii edited by Siriveni Halapua Barbara Naudain Pacific Islands Development Program East-West Center 1777 East-West Road Honolulu, Hawaii 96848 Copyright © 1992 by the East-West Center All Rights Reserved Manufactured in the United States of America Library of Congress Cataloging-in-Publication Data Pacific Islands Conference of Leaders (3rd : 1990: Hawaii Island, Hawaii) Proceedings of the Third Pacific Islands Conference of Leaders: regional cooperation with emphasis on private sector development: April 9-11,1990, Big Island of Hawaii, Hawaii / edited by Siriveni Halapua, Barbara Naudain. p. cm. ISBN 0-86638-150-3 1. Islands of the Pacific—Economic policy—Congresses. I. Halapua, Sitiveni. II. Naudain, Barbara, 1937— . III. Title. HC681.P297 1990 338.99—dc220 92-7872 CIP ^7 The paper used in this publication meets; the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials ANSIZ39.48-1984 Distributed by University of Hawaii Press Order Department 2840 Kolowalu Street Honolulu, Hawaii 96822 CONTENTS Foreword ix OPENING SESSION chaired by the Honorable John Waihee Governor of the State of Hawaii 1 ADDRESS, The Honorable Ieremia Tabai, President of the Republic of Kiribati, Chairman of the Standing Committee 3 ADDRESS, Dr. Victor Hao Li, President of the East-West Center 9 OPENING PLENARY SESSION PRESENTATIONS chaired by The Honorable Ieremia Tabai President of the Republic of Kiribati Chairman of the Standing Committee 11 AN rNTRODUCnON TO THE ROLE OF THE PRIVATE SECTOR IN DEVELOPMENT, Dr. Siriveni Halapua, Interim Director, Pacific Islands Development Program 13 PACIFIC ISLAND ECONOMIES IN THE GLOBAL CONTEXT, A. P. Thirlwall 19 EXPANDING TRADE AND INVESTMENT IN THE PACIFIC ISLANDS, Peter Thomson 35 DISCUSSION SESSIONS 47 REQUIREMENTS AND OPPORTUNITIES FOR TOURISM DEVELOPMENT chaired by The Honorable Lorenzo DeLeon Guerrero, Governor of the Commonwealth of the Northern Mariana Islands 49 INCENTIVES FOR PRIVATE SECTOR DEVELOPMENT chaired by The Honorable Baron Vaea, Deputy Prime Minister of Tonga 57 v vi I Contents FINANCING PRIVATE SECTOR DEVELOPMENT chaired by The Honorable Geoffrey Henry, Prime Minister of the Cook Islands 65 CREATING BUSINESS OPPORTUNITIES THROUGH PRTVATIZATION STRATEGIES chaired by The Honorable Peter Coleman, Governor of American Samoa 77 TRADE AND INVESTMENT OPPORTUNITIES chaired by The Right Honorable Ratu Sir Kamisese Mara, Prime Minister of Fiji 87 SUPPORT FOR SMALL BUSINESS DEVELOPMENT chaired by The Honorable Hirosi Ismael, Vice President of the Federated States of Micronesia 93 CLOSING PLENARY SESSION chaired by The Honorable John Waihee Governor of the State of Hawaii 99 PRIVATE SECTOR DEVELOPMENT PROGRAMS AND THE ROLE OF INTERNATIONAL AGENCIES, Jim McMaster 101 PRESENTATION ON PRE-DISASTER PLANNING, The Honorable Geoffrey Henry, Prime Minister of the Cook Islands 121 OTHER CONFERENCE BUSINESS 125 CLOSING REMARKS BY HEADS OF GOVERNMENT 127 CONFERENCE RESOLUTIONS AND CONFERENCE COMMUNlQUfi 137 Contents / vii APPENDIXES 153 I. CONFERENCE AGENDA 155 II. LIST OF PARTICIPANTS 159 III. OPENING REMARKS, Georges Kelly, Vice-President of French Polynesia 171 IV. OPENING REMARKS, Geoffrey Henry, Prime Minister of the Cook Islands 173 V. OPENING REMARKS, Lionel Del Solar, Consul-General of Chile, Los Angeles, California 175 VI. ADDRESS, Marilyn Meyers, Deputy Assistant Secretary of State, Bureau of East Asia and Pacific Affairs, U.S. Department of State 177 VII. PRE-DISASTER PLANNING FOR TROPICAL STORMS IN THE PACIFIC: A DISCUSSION PAPER PREPARED BY THE COOK ISLANDS 183 VIII. THE MACROECONOMIC ENVIRONMENT FOR PRIVATE SECTOR DEVELOPMENT 197 IX. LIST OF REPORTS DISTRIBUTED TO THE THIRD PACIFIC ISLANDS CONFERENCE 211 FOREWORD The Third Pacific Islands Conference of Leaders was held on the Big Island of Hawaii from April 9 to 11, 1990. Governor John Waihee of the State of Hawaii served as Conference Chairman. Like the First Pacific Islands Conference (1980) and the Second Pa• cific Islands Conference (1985), the Third PIC provided a regional framework for island leaders (1) to discuss and exchange views re• garding their development goals, ideas, problems, and experiences; (2) to identify priority research and training areas in relation to na• tional and international goals; and (3) to expand their dialogue leading to a better understanding among island leaders and scholars, as well as between them and supporting governments, organiza• tions, and agencies. Each Pacific. Islands Conference determines the relevant develop• ment issues around which PIDP organizes its research, dialogue, and training programs. The theme of the Third PIC-"regional coopera• tion with emphasis on private sector development"-reflected a widespread recognition of the critical role of the private sector in the development of Pacific island countries. The material contained in this proceedings provides a valuable re• cord of this historic Conference. In particular, this book reflects the general direction of the future economic development effort of the Pacific islands.region and the part that PIDP will play therein. Sitiveni Halapua Director Pacific Islands Development Program ix OPENING SESSION chaired by The Honorable John Waihee Governor of the State of Hawaii ADDRESS The Honorable Ieremia Tabai President of the Republic of Kiribati Chairman of the Standing Committee Governor, your excellencies, colleagues, friends, ladies, and gentle• men. I am pleased on behalf of the Standing Committee to welcome you today on the occasion of the opening of the Third Pacific Islands Conference. In doing so I want to express our sincere thanks for coming to attend this meeting. As in previous meetings it is always gratifying to see the participation of many people from various gov• ernments, from regional and international organizations, and from the private sector. Your presence today without doubt is a good be• ginning for the next five years when we expect PIDP to further build a bond made over the last ten years. The first conference, it will be recalled, was held here in Hawaii ten years ago. We are particularly pleased to be back again for our Third Conference, which coincides, I understand, with the celebration of the "Year of the Pacific" by the people of Hawaii. This is most appro• priate, and we cannot have chosen a better and a more suitable time and venue for our meeting. Our meeting here at this time is made possible by the kind invitation of the Governor of Hawaii who over the years, like his predecessor, has been a strong supporter of PIDP. His office has also been closely involved in the planning of this meeting. I want to thank him on our behalf for his support that has enabled this meeting to be possible. And to the President of East-West Center and the Director of PIDP and their respective staff, I want to thank them also for their efforts in making the necessary preparation for this meeting. Looking at the program I know our stay in Hawaii not only will be a busy one, but it will be a pleasant experience as well. 3 4 I Proceedings of the Third Pacific Islands Conference Looking back to the First and Second Conference it was clear that the underlying theme was about development. It is about how to meet the basic needs and to improve the socioeconomic status of our people through cooperation. That theme has not changed, and it will continue to be the fundamental reason for our meetings. It will also continue to be the basis upon which projects are formulated by PIDP. Since our last conference in the Cook Islands in 1985, much work has continued to be done. In addition to the work being done in the areas of education and training the policy-related research continues to be the main focus. Specifically, research projects covered such wide ar• eas as tourism, energy, social issues, and private sector development, to mention only a few of them. The Standing Committee provides general guidance over these projects in line with the decisions taken in the First Conference held in 1980. As one who has been involved with PIDP since it was first started, I can say that the work done here has made an important contribution to our development effort. As we all well appreciate, one of the key factors that determines development is the policy adopted. Without the proper and appropriate policy, the process of development will be very difficult indeed. This is the very area that PIDP is to assist in, by providing advice on the various possible policy options and for each government to make its own decision in line with its own national goals and aspirations. One of the recurring issues in the past has been the role of the pri• vate sector in the Pacific islands development. In the last Conference in 1985 it was also one of the issues on the agenda. Since then it has become and continues to be a particularly important component of the program. Many related studies and presentations have been completed over the last few years. Some of these were done on a country basis, thus further enhancing developments and use by those countries concerned. The interest in the issue, however, has not subsided. In fact, it seems to be increasing all the time. It is not only happening in our part of the world, it is even more dramatic in the Eastern Block countries where the rapid changes that are going on there are a direct recogni• tion that governments alone cannot achieve development.