PACIFIC ECONOMIC BULLETIN Feature PACIFIC INTEGRATION AND REGIONAL GOVERNANCE ‘Pooled regional governance’ in the island Pacific? Lessons from history Greg Fry Director of Graduate Studies in International Affairs, Department of International Relations, The Australian National University Since mid 2003 the Australian Government Australian push as too heavy handed. The has been attempting to reshape and revitalise Forum agreed not only to action on the regional cooperation in the South Pacific particular cases the Prime Minister had around the concept of ‘pooled regional raised, that of a regional police training unit governance’. The notion was first promoted and an Australian-sponsored study of civil by Prime Minister John Howard in the aviation, but also to a major overhaul of context of announcing his government’s regional arrangements under the auspices intention to lead a regional assistance of the Forum. In some senses the resultant mission to Solomon Islands.1 The Prime Pacific Plan became the embodiment of a Minister argued that the smaller Pacific states broader notion of ‘pooled regional needed to share resources if they were to governance’, not just the sharing of resources overcome the constraints imposed by their and saving of costs in particular sectors but small size and lack of capacity. He illustrated a commitment to a ratcheting-up of the the point by referring to the absurdity of each cooperative effort as implied in the term island country trying to run its own airline ‘regional governance’ as against ‘regional or train its police when these could be done cooperation’ (Eminent Persons’ Group 2004). through a pooling of resources. The Prime Minister also lobbied hard and By August of 2003 ‘pooled regional ultimately successfully to make sure that an governance’ had become a major foreign Australian would be in charge of the policy objective. Prime Minister Howard development of the Pacific Plan. vigorously promoted the concept at the As the concept is currently being Pacific Islands Forum in Auckland. After his developed in the Pacific context certain things discussions he claimed that other leaders have become clear about the parameters had accepted the notion (Howard 2003) within which the participating states envisage although the New Zealand press interpreted future developments. No Pacific leader is these events slightly differently, viewing the pressing for a Pacific Union along the lines of 111 Pacific Economic Bulletin Volume 20 Number 3 2005 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Feature the European Union or a regional currency The fact that Australian Governments have (the Australian dollar) despite the publicity made major attempts in the past to promote given to these ideas following the release of precisely this same agenda is important. the recommendations of an Australian Senate Prime Minister, Paul Keating, for example Committee on A Pacific Engaged just prior to attempted in 1994 to create a new regional the Auckland Forum. Both the Australian economic order with ‘pooled regional Government and leaders of Pacific island governance’ in all but name as the underlying states rejected such ideas as premature. But concept and, as now, with airline all seem to be agreed on the need to go beyond rationalisation as a key policy objective (see what is currently in existence either to deal Fry 1994). This is not to mention the first with globalisation, to promote regional decade of the Forum’s history where a security (Australia) or to halt the development narrow conception of ‘pooled regional of a ‘ghetto of conflict and poverty’ (New governance’—that concerned with regional Zealand).2 There also seems to be agreement integration of sectors of the economy that this should be pursued under the including, most prominently, civil aviation— auspices of the Pacific Islands Forum. was pursued as the main objective of But within these broad parameters there regional cooperation and failed. At the risk is obviously ground for political contest over of simplification, I divide this rich history of the depth, breadth, form and purpose of regional cooperation in the Pacific into five future regional governance and the shape of main forms of attempted regional governance institutional arrangements. These are of with a rough correlation with different time course not new questions in a region where periods in terms of their prominence. regional governance in various forms has been attempted for so long. As Fiji’s Foreign Minister, Kaliopate Tavola, said when asked Comprehensive regional about the new notion of pooled regional integration (1971–74) governance in July 2003: ‘Well the concept is not new, I mean, the name Prime Minister The emphasis on regional economic John Howard has given it is new… But the integration in the early years of the Forum concept itself has been the basis of some of reflected the liberal economic and the regional initiatives’.3 development thinking of the time. It In its 34 years of history the Pacific proceeded on several simple premises which Islands Forum has provided a focal point for seemed to have common sense status and several different models of regional which bear a strong resemblance to the governance. It is the starting point for this rationale for ‘pooled regional governance’ as discussion that this experience provides promoted in the current context. They were some useful insights into the issues awaiting that larger units do better than smaller ones particular interpretations of the concept of (particularly very small ones); that ‘pooled regional governance’. While one rationalisation of industry across the region should recognise that there are new global would maximise economies of scale or at conditions and Pacific states are at a very least reduce the diseconomies of scale that different stage of their political development would otherwise occur; that small countries there are nevertheless lessons to be learnt could not each afford a shipping line, a from this history. It is at the very least university, an airline, and a development important to remind some new bank; and that a free trade area would be commentators that there is such a history. trade-creating for the region; and that cost- 112 Pacific Economic Bulletin Volume 20 Number 3 2005 © Asia Pacific Press PACIFIC ECONOMIC BULLETIN Feature cutting could be achieved through bulk South Pacific and the carrier Air Pacific— purchasing. These ideas were implicit in the had already been created in these sectors in early proposals of the Forum, in the tasks the last years of the colonial period. They given by the first Forum to a committee on became controversial in the 1970s as Pacific trade which met in 1971, and in the tasks island leaders outside Fiji began to question given to the new South Pacific Bureau for whether these Fiji-based institutions were Economic Cooperation in its founding adequately serving their interests.4 agreement (South Pacific Forum 1971, 1972). The idea of a regional airline, based on In the event, proposals for an extension of the existing Fiji Airways, was comprehensive regional economic first developed in the late 1960s by the integration—economic union, free trade area British, Australian, New Zealand and Fiji and industrial rationalisation ideas—did not Governments. In 1968 the existing pass initial inspection by consultants and shareholders in the consortium—Qantas, Air committees. They failed largely on the basis New Zealand, BOAC and the Fiji of the supporting arguments as examined by Government—were joined by the Western officials and consultants, rather than Pacific High Commission on behalf the because of political positions of member British Solomon Islands Protectorate, the countries in formal negotiations. Industrial Gilbert and Ellice Islands Colony, and the rationalisation was thought to be premature Kingdom of Tonga. In the following year when an industrial base did not exist in the Western Samoa and Nauru because island countries except in Fiji. Inter-island shareholders and in 1971 Fiji Airways trade was minimal because their products changed its name to Air Pacific.5 By the early were either the same (for example, bananas) 1970s, however, it was evident that it was or, where different, were not the type of only Fiji, among the island states, that was product that other island countries had the keen to further develop Air Pacific as a capacity to process (for example, copper). regional consortium. Despite their While a regional free trade area was judged shareholdings in Air Pacific, the to benefit Fiji’s economic development it independent island countries were clearly would be damaging to the island economies. interested in developing their own national Incorporation in a wider free trade area with airlines. Nauru had already established Air Australia and New Zealand was seen as Nauru in 1969 and Polynesian Airlines, with having similar implications. the Western Samoa Government as major shareholder, was set up in the same year. In 1972 Nauru formally withdrew from the Sectoral integration (1971–78) board of Air Pacific while retaining its shareholding and in the following year the While comprehensive economic integration King of Tonga announced his intention of was effectively removed from the regional establishing a national airline and Air New agenda in the early years of the Forum’s Guinea was established. The lack of activities attention focussed instead on commitment of the other island states to the sectoral integration, particularly in the areas