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Fiji New Caledonia Samoa Solomon Islands Tonga Vanuatu COUNTRY REPORT Pacific Islands: Fiji New Caledonia Samoa Solomon Islands Tonga Vanuatu December 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 60/F, Central Plaza London 111 West 57th Street 18 Harbour 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) 7830 1023 Fax: (1.212) 586 0248 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.eiu.com Electronic delivery This publication can be viewed by subscribing online at www.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 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 Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK. 1 Contents 3 Summary The region 6 Outlook for 2002-03 7 The political scene 8 Economic policy and the economy Fiji 10 Political structure 11 Economic structure 11 Annual indicators 12 Quarterly indicators 13 Outlook for 2002-03 14 The political scene 16 Economic policy and the economy New Caledonia 19 Political structure 20 Economic structure 20 Annual indicators 21 Outlook for 2002-03 21 The political scene 23 Economic policy and the economy Samoa 25 Political structure 26 Economic structure 26 Annual indicators 27 Quarterly indicators 28 Outlook for 2002-03 28 The political scene 30 Economic policy and the economy Solomon Islands 32 Political structure 33 Economic structure 33 Annual indicators EIU Country Report December 2001 © The Economist Intelligence Unit Limited 2001 2 34 Quarterly indicators 35 Outlook for 2002-03 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 2002-03 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 2002-03 50 The political scene 50 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 34 Solomon Islands: foreign trade 34 Solomon Islands: foreign reserves 36 Solomon Islands: gross domestic product 36 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 4th quarter 2001 © The Economist Intelligence Unit Limited 2001 3 Summary December 2001 The region Outlook for 2002-03 External risks are dominating regional prospects. The most immediate concern is the effect on the region of the September 11th terrorist attacks on the US. The outlook for regional economic growth is poor. The Asian Development Bank issued a forecast, before September 11th, for regional growth of 1.2% in 2001. The political scene The Australian government’s “Pacific solution” to its problem of dealing with people-smuggling is testing regional relationships. The secretary-general of the Pacific Islands Forum (PIF), Noel Levi, has expressed concern over the lack of action on security co-operation. New analysis has shown unusual warming in the region. Economic policy and the Recent attempts to agree on global bluefin tuna quotas has failed. Japan has economy opposed the new Pacific fisheries convention. A regional sugar supply agreement has been revived. A PIF trade office has been opened in Beijing. Fiji Outlook for 2002-03 The future stability of the government is again in the hands of the courts. George Speight, awaiting trail for treason, lost his parliamentary seat for failing to attend two consecutive sessions. The uncertainty surrounding the legitimacy of the government is weighing heavily on the economy. The focus of international relations may move north. The political scene The president, Josefa Iloilo, has attacked Fijian support of sanctions. Mahendra Chaudhry has declined the offer to lead the opposition and the government is supporting his party’s legal challenge to its composition. Political leaders have agreed on the need for some changes. Australia has lifted its sanctions to mixed reactions but New Zealand has deferred its sanctions decision. Economic policy and the Moderate growth is expected in 2002, when tax rates will be reduced. Poverty economy alleviation is a priority. Tate & Lyle has warned that sugar quality must improve. Tourist arrivals are recovering. New Caledonia Outlook for 2002-03 The economy and polity face testing times . The impact of a fall in nickel prices will be immediate as the economy is dominated by this single commodity. The pro-independence coalition, Front de libération national kanak socialiste (FLNKS), is in disarray. EIU Country Report 4th quarter 2001 © The Economist Intelligence Unit Limited 2001 4 The political scene FLNKS has left the government after claims it was “under-represented”. The new leadership of Union calédonienne (UC, Caledonian Union) has alarmed other FLNKS members. FLNKS has deferred the leadership issue until December 22nd. The Palika leader has called for unity. Economic policy and the The latest economic statistics point to hard times. Export earnings have fallen economy by nearly 20%, year on year, for the first eight months of 2002. Société minière de sud Pacifique (SMSP), the country’s northern nickel company plans to cut production by half. SMSP/Falconbridge has entered operational planning for their joint venture on the Koniambo mountain range. Samoa Outlook for 2002-03 The government of the Human Rights Protection Party is secure. The central bank governor believes the economy can survive the current global downturn, but the external risks are not so clear-cut. The political scene The results of the post-election legal actions have favoured the government. American Samoa’s US congressman has called for a maritime boundary treaty with Samoa. US marines will visit Samoa to reaffirm America’s commitment to the island state. Directors of the Robert Louis Stevenson Museum may have broken US law. Economic policy and the The central bank governor is gloomy about economic prospects but is also economy confident that problems can be overcome. Tourist numbers have increased. Polynesian Airlines has received a new aircraft. The chief auditor has detailed serious irregularities in the management of the country’s National Provident Fund. The electricity supplier has announced pricing changes. The government plans to expand small businesses. Solomon Islands Outlook for 2002-03 The outlook for a new government is grim. The economy has all but ground to a halt. Voters appear to have opted for a clean-up of parliament. The political scene Most international election observers were satisfied with the conduct of the election. Law and order will be the top priority for Mr Ulufa’alu if he is re-elected. Protests over compensation payouts blockaded the outgoing prime minister in November. Australia and New Zealand rejected calls for armed intervention in October. Economic policy and the Government debt now exceeds SI$1.1bn (US$200m). Agriculture and fisheries economy production is below that of 2000. Solomon Airlines has encountered operational problems. EIU Country Report 4th quarter 2001 © The Economist Intelligence Unit Limited 2001 5 Tonga Outlook for 2002-03 The state of the government’s main investment vehicle, the Tonga Trust Fund, is problematic and expected losses cloud the financial outlook. The trust fund affair will be a severe test for the prime minister. The political scene Rumours and speculation over the state of the royal family have upset the establishment. Ministers on the trust’s board of trustees have had their appointments terminated. The king’s health has been the subject of speculation. Economic policy and the The MP for Ha’apai, Teisina Fuko, questioned the management of the trust economy fund in August. Losses could total over US$46m. The IMF estimates a 3% GDP growth rate for 2000/01. Employment creation is now a top priority. Tonga hopes for full WTO membership in 2001. Vanuatu Outlook for 2002-03 The government may face a financial crisis but details have yet to emerge publicly. Much depends on the outcome of the general elections in the first quarter of 2002.
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