Country reports

Fiji

Political stability is the key to economic success

In most of the ACP states featured in our Country Reports, the vital issues are usually economic and social ones. How is a nation with a poor natural resource base to achieve lasting development ? What can be done to improve the skills of the people? How can a vibrant private sector be created ? Can better health care be delivered and how should it be paid for? Some of these questions might well be valid for Fiji but the visiting journalist soon discovers that they are all secondary issues. For this is a country whose political system itself dominates the agenda. The fundamental issue here is the relationship between the indigenous people of Fiji and the descendants of indentured Indian labourers brought in by the British between 1879 and 1916 to work in the sugar cane fields.

Fiji, in fact, is home to people of a variety of cultures. On the indigenous side, the majority are Melanesians but there are also some Polynesians (living on the island of Rotuma). The country even plays host to Banabans, from Kiribati, who were displaced from their homes on Ocean Island to make way for the phosphate diggers. They hold a freehold to the island of Rabi and enjoy a special self-governing status. And while the Indians form the bulk of the non-indigenous population, there are also small Chinese and European communities as well as a number of inhabitants of mixed race.

Despite this diversity, it would be inappropriate to describe Fiji as a melting pot. Ever since the rapid expansion of the Indian population, official policy has tended to accentuate the divisions. In the early days, it was the British who were responsible for this, although one has to be careful to avoid value judgments. The colonial administrators, it seems, were aware of the tensions that would arise by bringing in large numbers of people of a different culture, language and religion. Their eventual response was to provide guarantees for the local population, notably as regards land rights. The effect was to preserve the traditional land tenure system which was based on villages and families. At the time, it seemed a logical thing to do, but several generations on, the country now has a settled population of Indian origin (43% of the total) who have limited opportunities to own land - even though many of them work on it.

As the economy has developed, each of the two main communities has found itself 'specialising' in different fields. For example, cane farmers and retailers tend to be of Indian origin while the public service has traditionally attracted more native Fijians. Significantly, the army is almost exclusively filled by indigenous people - a crucial factor in the 1987 military coup.

On the political front, as Fiji moved towards independence, the idea of providing separate representation for each ethnic group also took hold. The independence constitution of 1970 reflected this with the two main communities being given parity (22 seats each) in the House of Representatives.

Shattered illusion

Although there was no real assimilation between 1970 and 1987, Fiji was seen by many as a model of a successful multiracial society. It was only when the country got its first Indian-dominated administration (sustained in power by a smaller native Fijian party) that this illusion was shattered. There was a military coup led by Lieutenant-Colonel Sitiveni Rabuka, who is now the elected Prime Minister,. Shortly thereafter, Fiji became a republic (Queen Elizabeth was formerly Head of State) and in 1990, a new Constitution was adopted giving political primacy to the indigenous Fijians. Needless to say, it was a time of greatly heightened communal tension.

The 1987 coup and the events that followed have been well covered elsewhere (including our previous Country Report which was published in 1991). It suffices to say here that while the last few years have been a lot less turbulent, tensions remain. In 1997, the country must adopt a new set of constitutional proposals and a big debate is currently under way about the shape of the system of government for the 21st century. This subject is covered in a later article and also features prominently in our interviews with the Prime Minister and Opposition Leader.

The main focus of this article is therefore on economic and social aspects although, as one soon discovers, this frequently leads us back to the ethnic question. This is particularly the case when one considers the overall economic performance of the country. Fiji is not poor by developing nation standards and it has enjoyed modest growth during 1995 and 1996, but there is a widespread view that it could be doing a great deal better were it not for the political uncertainties. The problem is summed up by the Economic Intelligence Unit in its Fiji Country Report for the first quarter of 1996: 'Political instability will continue to deter investment, other than that on highly favourable tax terms.' In other words, Fiji is paying a high economic price for its internal difficulties.

General unease about the future and, in particular, the outcome of the constitutional review process is compounded by specific concerns over land tenure. The long-term leases granted to (mainly Indian) farmers are approaching their end and the government must soon decide what it should do next. Will any of the sugar cane farmers be evicted and if so, how many ? What alternative arrangements will be made for them? These questions remained to be answered when The Courier visited Fiji in July although, as our keynote interviews show, the subject was clearly exercising the minds of the politicians.

A long-term strategy for agriculture?

The way in which the land question is dealt with will have a crucial impact on the sugar industry - still the country's most important product in terms of its contribution to GDP and the jobs that it generates (see the article entitled 'Sugar definitely has a future'). With other uncertainties facing this sector - in particular, the process of global liberalisation - there is a growing recognition of the need for a long-term strategy. The government has a two-pronged approach - improving efficiency within the sector and diversifying into other agricultural products. To learn more about this, we spoke to Luke Ratuvuki, who is the Permanent Secretary for Agriculture, Fisheries and Forests.

Mr Ratuvuki began by stressing the scope for increasing the sugar yield per hectare by as much as 75% (and by even more with irrigation). If productivity could be boosted on this scale, Fiji sugar would be in a much better position to compete in open world markets. He admitted, however, that the country would still face a struggle in maintaining market share and, looking ahead ten years, foresaw a slimmed down industry providing high quality sugar with more of a focus on niche markets. This inevitably meant looking at other agricultural products as possible long-term substitutes. The coconut (or as the Permanent Secretary dubbed it, 'the tree of life') is traditionally grown here and seems poised to enjoy a new lease of life following a period of decline. Fiji has also picked up the taro trade at the expense of Western Samoa, which is affected by taro blight, while there are significant exports of ginger to Australia, New Zealand, Canada and Europe. Mr Ratuvuki spoke enthusiastically about branching out into other areas such as pawpaws, mangoes, bananas and aubergines.

Fiji has potential for growth in a range of non-agricultural sectors, but farming is sure to play a vital part in the economy for many years to come. Currently, sugar represents almost three quarters of all crops by value (excluding subsistence growing) and the Fijians are only too aware that this makes the country particularly vulnerable to external shocks.

The other primary sectors are all present in Fiji, albeit on a more modest scale. There is some deep-sea fishing backed by Asian investors. This provides useful employment although perhaps not the best possible financial return to the country. As one would expect in a nation of three hundred islands, there is also extensive artisanal and subsistence fishing in the inshore areas.

The forestry sector divides into two parts: artificial softwood plantations which are said to be managed sustainably and the naturally growing hardwoods. As regards the latter, the EU is helping with a mapping project. Although Asian loggers do not operate in Fiji, there is considerable land clearance taking place, leading to problems of erosion and silting.

Prospects for mining

Gold is the main mineral being exploited with important deposits around Vatukoula. The sector has had its ups and downs but the Emperor Gold Mining Company has now embarked on an expansion project aimed at raising production from the current level of about 4000 kilos per annum to 6000 kilos by the year 2000. A huge copper and gold mine is also planned for Namosi, some 35 km from Suva. Other minerals discovered but not exploited include bauxite, iron, lead, zinc, phosphates and marble. Mining currently makes a modest contribution to overall GDP but represents an important component in the export earnings figures.

With one key exception, manufacturing is on a fairly small scale with an emphasis on staple items (butter, beer, soft drinks, paint, soap etc.) for the local market. The exception is the garment industry which provides some 20% of the country's export income and a considerable amount of employment.

The investments in garment manufacturing and mining have been important in jobs terms and in improving the trade figures, but there are those who criticise the fact that the government appears to derive little revenue from the operations. The exact fiscal benefits are not easy to determine, prompting some observers to suggest that official secrecy should be eased (see the article on the Constitutional Review later in this Country Report).

In the service sector, long-term growth is foreseen in the key area of tourism. The number of holidaymakers choosing Fiji dipped sharply at the time of the coup, illustrating the importance of political stability in attracting visitors. Tourist arrivals bounced back once Fiji's internal difficulties had receded from the international headlines. The politicians must be hoping that nothing will occur during the current period of constitutional discussion and negotiation to put Fiji back on the front pages. It is worth mentioning here that Fiji's national carrier, Air Pacific, is an example of a relatively rare bird - an airline that makes money ! According to journalist Avin Rahish, writing in the July 1996 issue of The Review (the news and business magazine of Fiji): 'It is one of the few government investments that is profitable on its own.'

If tourism is a success story, there is something of a shadow over the financial services sector, which is more extensive here than in most developing countries. The reason is the collapse last year of the National Bank of Fiji with losses of US$ 142m (equivalent to 10% of the annual GDP). The authorities were accused of a failure in supervision and the taxpayers have had to pick up some of the bill. More serious, however, is the undermining of confidence in the system and it will take time for this to be restored.

Social challenges

As a middle-income country, Fiji has relatively favourable social indicators in the areas of health and education. Medical facilities are provided by the government but it is said that the public health system is not as good as it once was. This is attributed, among other things, to the emigration of highly qualified staff in the aftermath of the events of 1987. Nonetheless, the country does have 27 hospitals and one doctor for approximately every 1900 people. At 72 years, life expectancy is high compared to the ACP average.

The education sector is well-developed with more than 800 primary and secondary schools (for a population of less than 800 000) and 41 technical or vocational institutions. As a result, primary school enrolment is close to 100% while the 1986 census revealed that 60% of 15-year olds were still in education. On the other hand, there are concerns over the proportion of teachers lacking qualifications, notably in the primary school system. In practice, there is considerable racial segregation at both primary and secondary levels, although there is no official policy to this effect.

Educationally, the jewel in the crown is almost certainly the University of the South Pacific whose main campus is in Suva. This regional institution, which has departments in a number of other countries of the South Pacific, draws students from various island nations. Dr Vijay Naidu, who is the USP's Pro-Vice Chancellor, outlined some of the special features of this unique university which has to cater for a highly dispersed population. Like traditional tertiary institutions, it provides a wide range of degree programmes on campus, catering for 3500 students. It has a further 9000 who are being educated using the 'distance mode'. Distance learning is organised through centres in each of the participating countries. Students can attend these centres from time to time but much of their work is done through radio and telephone linkages and, increasingly nowadays, by e-mail and satellite communications. The University, Dr Naidu stressed, also provides continuing education at non-degree level 'in everything from computing to basket-weaving'.

Like the health sector, the USP suffered a loss of highly qualified staff after 1987 - and not just among employees of Indian origin. As the Pro-Vice Chancellor pointed out, the coup created 'a new sense of insecurity' all round and teachers who decided to emigrate were quickly accepted in Australia and New Zealand. The loss has been particularly serious in the scientific disciplines.

90% of the USP's recurrent expenditure is covered by member government contributions with the remainder coming from Australia and New Zealand. For capital investments, there is heavy reliance on external donors.

In both of Fiji's main ethnic communities, a strong commitment to the family ensures that there is relatively little absolute poverty although things may be changing as the country become more urbanised. It is rare to see beggars in the streets in the South Pacific but Suva, sadly, has a number of these.

The overall picture is of a country with very considerable potential in both human and natural resource terms which needs to overcome a number of challenges to secure a more prosperous future. Some of these challenges - adapting to the world of free markets, tackling bureaucratic impediments, bringing development to rural villages, improving the infrastructure, and so on - are familiar to all developing countries. The single most important constraint, however, is the big ethnic divide, and the political uncertainty which flows from this. And this is something which can only be solved by the people of Fiji themselves.

Interview with Prime Minister Sitiveni Rabuka

'The last ten years have been very educational for me'

It is almost ten years since Sitiveni Rabuka led the military coup which toppled the newly-electerl coalition government The stormy events of 1987 are long gast end Fiji has returned to more peaceful ways, but the country is arguably not yet at peace with itself. Major-General Rabuka is now the erected Prime Minister, having led the SVT to victory at the polls in 1992 and 1994. But the gulf between the native Fijians end citizens of Indian descent remains - indeed, it is institutionalised in a political system which ensures a parliamentary majority for the former. A constitutional review is currently under way end a new text must tee adopted by July 1997. For both sides, the stakes are high. In this interview, Prime Minister Rabuka speaks frankly about the crucial issues facing Fiji as the nation gears up for the great constitutional debate.

Fiji also faces some formidable economic challenges and we began by asking the Prime Minister about these.

- The main challenge is the one that everybody faces: achieving an acceptable rate of growth to ensure job creation and address the unemployment problem. We also want to improve the standard of living of the people, to upgrade our infrastructure, and to develop both the urban and rural areas.

· What sectors do you see as offering the best hope for future growth ?

- We are looking particularly at tourism and the agro-based industries. In the international sphere, we are aiming to boost trade, particularly with our traditional trading partners, Australia and New Zealand, and with new partners that we are trying to cultivate in Asia.

We are very grateful for the Lomé Convention and the various arrangements associated with it - particularly as regards access to the EU market for our sugar products. Although it would be desirable for us not to have to rely on preferential pricing for sugar, for the moment, there is no alternative. And while we are looking for alternatives and seeking to diversify our economy, we will need that system to remain in place. We would like to continue the dialogue to ensure that this happens.

In the area of trade, as I say, our focus is on Australia and New Zealand, and the regional trade agreement that the Pacific island territories have with them. This agreement is currently under review. One important aspect is the clause governing the rules of origin. If we can convince Australia and New Zealand to reduce the local input requirement from 50% to 35%, then we won't need any aid from them. The effect will be to secure existing jobs and, indeed, to increase employment, particularly in the garment industry. At the moment, most of the textiles we import for further processing come from Australia. Because of the market we have to sell to, it is very good quality material. This means the costs are high, in comparison with the local input needed to turn it into finished products, and this makes it difficult for us to get up to the required 50%.

If we don't get that reduction, things could go in the opposite direction. Manufacturers might relocate and we could be facing jobs losses. You have to remember that we are competing with Asian producers who have very low wage costs.

· Is this proposal for a reduction in the local input requirement on the agenda with the Australians and New Zealanders ?

- The review actually excludes the clause on the rules of origin. Having said this, we have effectively raised the calculation of our local input in negotiations on a series of other points. On paper, the 50% figure is unchanged but in fact, there has been a reduction of about 5%, thus giving us a little margin.

· On the sugar issue you said you were hopeful that some form of preferential access to the EU market would be maintained. Isn't there a concern that this may not last beyond the year 2000, particularly given the increasingly liberal world trading system ?

- Yes, and we are looking at that. We should be gearing ourselves up for what happens at the end of the current Lomé agreement. It remains to be seen whether, with the WTO and the new trends, the curtain will suddenly be brought down on 1 January 2000, or whether there will be a grace period in which we are given time to consolidate our diversification.

· The other big issue in the sugar sector concerns the impending expiry of the land leases.

- That is a local issue and a very important one. It has high priority on our government agenda. We are currently talking to the landowners and lessees, explaining what will happen. The legislation (the Agricultural Landlord and Tenant Act) makes no provision for further extensions to the leases, which are now nearing their end. Do we need a new act or should we amend the present law to allow extensions beyond the 50 years originally allowed for ? And if we are to do that, what happens to the compensation provisions? At the moment, these are viewed in a rather one-sided way. The emphasis is on the situation where the landlord compensates the tenant for improvements made to the land. But the rules also provide for compensation in the other direction where the value has been reduced. This may be due to constant cultivation over 50 years. What if the owner wants to return the land to its original use, planting taro, yams or cassava, as his father may have done fifty years ago, and finds he can no longer do so ? There has to be a balancing act here.

Hopefully, most of the land will be leased again under a new agreement or under an amendment to the existing law - because we will need to continue sugar production. It is also worth noting that some sugar farmers are beginning to diversify into other crops, both subsistence and commercial.

· What arrangements do you envisage for those farmers who do not have their leases renewed ? Will they be relocated ?

- Right now, we are looking at the use of state land. There are two basic categories here - what used to be known as 'Crown Land under Schedule A' and 'Crown Land under Schedule B'. Schedule A covers the land not claimed by anybody during the Commission that was set up to determine the ownership of land in the very early colonial years. Schedule B is land that belonged to a community or landholding unit that has since died out: in other words, where there is no surviving member of the land-owning unit. So we have those parcels of land available. My party's policy is to restore land to the traditional owners where possible, but in those cases where you cannot identify the original owners, there will be land available for resettlement - although resettlement is perhaps not a very good term to use.

· It is somewhat emotive.

- It implies taking a person, family or community from somewhere and planting them somewhere else - and I hope we can avoid that. On the other hand, if you look at what people are doing nowadays, everybody's relocating. People are always resettling, moving away from home and setting up elsewhere. In this case it is perhaps a necessity, in the sense that the legislation has caught up with us.

· Can I turn now to the sensitive issue of the constitution. This is another area where decision day is looming. You currently have a constitutional review under way with the Commission's report due out soon. What do you think will emerge from this process over the next 12-18 months ?

- I don't feel that the constitutional issue is a sensitive one and do not think anyone should feel restrained in asking questions about it. It reflects the reality of the situation in Fiji. There is a requirement that the 1990 Constitution be reviewed and we have a Review Commission chaired by Sir Paul Reeves. He is a very capable man who is a former Governor-General of New Zealand and a very eminent constitutional lawyer. Assisting him, we have two party nominees - one from the main Fijian party and one nominated jointly by the Indian parties in Parliament. I have total confidence in that Commission. I believe they will come up with very objective observations and recommendations.

Let me explain the timetable to you. The report is expected by the end of August. It will be presented first to the President and then to me for submission to Cabinet. I envisage it being tabled in Parliament towards the end of September. We cannot debate it until three months have elapsed from the date it was tabled - which takes us to the end of the year. A lot of work will be needed during the first half of 1997. The Joint Parliamentary Select Committee, made up of members of both the upper and lower houses, will have to work on the report and try and build consensus on the various issues.

Given that the house is racially divided, and the possibility that a premature discussion on the floor of the house may raise the temperature, I would prefer not to have a full parliamentary sitting in the early part of next year. Instead, we should go into committee and deal with it there. And then when we are satisfied that the issues can be brought out into the open, we will debate them fully in Parliament. As soon as we start talking next year, the legislative craftsmen should begin their work. On the basis of this programme, I believe we can meet the deadline to the day, promulgating a new Constitution which has been accepted by both houses on 25 July 1997. So I am very hopeful.

· Without prejudging the final outcome, do you envisage a move away from strict communal separation ? I am thinking here, in particular, of the separate voting lists ?

- I think there may be provision for some cross-communal voting. There was something like this in the 1970 Constitution which had both communal and national rolls.

· What about the longer term. Do you foresee a political system developing in Fiji where ethnic origin is irrelevant - perhaps a 'right-left' divide, if that is still a meaningful concept ?

- I am not bold enough to say that that will happen. I have seen the darkest side of Fijian nationalism. I have seen the fear that was in the Indian population in 1987. But if we move too quickly to remove the racial safeguards that are in the Constitution, we may run the risk of prolonging the bad relationship between the races that we now have. So I would say we should proceed very cautiously and let the natural healing process take its course. We also need to look beyond the Constitution at aspects such as our education system and enhancing the ability of the Fijians to compete.

· I believe the education system is also very divided.

- Some schools are reserved for Fijians although, slowly, there are Indians from families close to the schools who are beginning to enter them.

· Do you think that this is a promising sign for the future ?

- I think so. I went to a purely Fijian school and when I came out of that, everything was Fijian for me. I went straight into the army which is another Fijian-dominated institution. It was not planned that way. It is just the way it happened. My tolerance level of other races was very low. But you cannot expect somebody who gets to this level of leadership to have a low racial tolerance level. I must admit that the last ten years have been very, very educational for me - very good for my own being. I consider what I used to think before and the way I used to feel before. I have never been threatened by an Indian, but I had always been in Fijian 'safe' areas - a Fijian school and then in the army. But since coming out of that sort of cocoon, I have managed very well to accept that I have to compete with them, I have to look after them, and I have to devise policies and programmes that will be good for them as well as being good for us.

· One final question. Do you envisage Fiji seeking to rejoin the Commonwealth in the near future ?

- I think seeking is the wrong word. We will do what we feel is good for Fiji and its people. The people of Fiji are those who are here now but it will include some of those who have moved on looking for greener pastures and who are willing to come back. We were not expelled from the Commonwealth; our membership lapsed. It is up to the Commonwealth to say whether they are prepared to reconsider our member ship.

Profile

General information

Area: 18 272 km². Fiji has two main islands (Viti Levu and Vanua Levu) and about 300 smaller ones. It has an Exclusive Economic Zone of approximately 1.3 million km²).

Population: 790 000

Population density: 43 per kilometre²

Capital: Suva (situated on the island of Viti Levu)

Main languaqes: English, Bauan

(main Fijian language)

Currency: Fiji dollar (F$). In June 1996, 1 ECU was worth approximately F$ 1.80. (US$1 = F$ 1.40)

Fiji

 

Politics

System of government: A bicameral parliamentary system consisting of an appointed Senate and an elected House of Representatives. The President is a non-executive head of state chosen by the Great Council of Chiefs. The President appoints the Prime Minister.

Under the Constitution, adopted in 1990, the Parliament is divided along racial lines. The Senate has 34 members, 24 of whom are indigenous Fijians. In the 70-member House of Representatives, 37 seats are reserved for native Fijians, 27 for Indo-Fijians, 5 for 'general voters' (other ethnic groups) and 1 for Rotuma Island (whose inhabitants are Polynesian). The 1990 Constitution provides for a review within seven years and discussions are currently under way with a view to amending the Constitution by the 1997 deadline.

President: Ratu Sir Kamisese Mara

Prime Minister: Major General Sitiveni Rabuka

Main political parties: Soqosoqo ni Vakavulewa ni Taukei (SVT - Fijian), National Federation Party (NFP - Indian), Fiji Labour Party (FLP - Indian), Fijian Association (FA - Fijian), General Voters Party (GVP).

Party representation in Parliament (1994 election result): SVT 31, NFP 20, FLP 7, FA 5, GVP 4, Others 3.

Economy

GDP: (1995) F$ 2.85 billion

Annual GDP per capita: approx US$ 2600

GDP growth rate (1995): 2.2% (2.9% predicted for 1996)

Principal exports (1994): Sugar (US$ 182m), Garments (US$ 96m), Gold (US$ 43m), Fish (US$ 38m), Timber (US$ 21 m) Main trading partners (in order of importance):

Exports - Australia, UK, USA, Japan, New Zealand.

Imports - Australia, New Zealand, USA, Japan, Singapore.

Trade balance (1994): exports - US$ 547m, imports - US$ 826, deficit - US$ 279m. The current account figures also usually reveal a deficit but this is much smaller due to tourism earnings and official transfers.

Inflation rate (1995): 2.2%

Government budget (1996): revenue - F$ 759m, expenditure - F$ 851 m, deficit - F$92 (about 3.5% of GDP)

Forma/sector employment: 98 112 (out of a total economically active population of about 265 000)

Social indicators

Life expectancy at birth (1993): 71.6 years

Adult literacy (1993): 90.6%

Enrolment in education: all levels from age 6-23: 79%

Human Development Index rating: 0.853 (47th out of 174)

Sources: Economic Intelligence Unit, UNDP Human Development Report, 1996, EC Commission.

An interview with opposition leader Jai Ram Reddy

'We need to move to a more racially neutral system'

Fiji is not unique in having a political system that is heavily influenced by racial or communel issues In places as diverse as Northern Ireland, Belgium, Guyana and Trinidad - not to mention many parts of Africa - people vote for parties which claim to represent the particular ethnic, religious or linguistic group to which they belong. Where Fiji is different, however, is in having a Constitution that gives primacy to one particular community. Since the 1987 coup, native Fijians have held the upper hand with a guaranteed majority in Parliament and a firm grip on the levers or power.

The 1990 Constitution, adopted when communal feelings were still running high, contained a requirement for a constitutional review within seven years. When The Courier visited Fiji (July 19961 the work of a three-member Commission appointed to carry out the review and make recormmendations was nearing completion. All sides seem to accept the need for reforms designed to help bridge the sharp racial divide.

The big question is how radical these reforms are likely to be. We sought the views of Jai Ram Reddy, the leader of the opposition National Federation Party (NFP) which has the support of most of the country's Indian (Indo-Fijian) community.

· You are the first opposition leader I have met who cannot, constitutionally, become Prime Minister. How do you feel about that ?

- It is something that rankles with me - the mere thought that I am not equal with my fellow citizens of other races. I think that's generally the way the Indians feel here. All the constraints and limitations, the denial of basic human rights, are the source of a great deal of unhappiness.

· You talk about basic human rights. Obviously, the political aspects are very important but I get the impression that, in other respects, this is a fairly free and easy society: there is free expression, for example.

- Yes, but free expression is only one aspect of human rights. The fact is that discrimination based on race is widespread and institutionalised. About 45% of the population is Indo-Fijian but you will find they are not fairly represented in the higher levels of the public service. At the Permanent Secretary level, there is definitely a government policy to have a limited number of Indians - and there are hardly any in the more crucial ministries. The same is true of managerial positions throughout the public sector. In the statutory bodies and major public undertakings, there is a deliberate policy of excluding Indians. So we are very much a marginalised community in the public sector.

· Wouldn't it be true to say that Indians have quite a lot of economic power ?

- No, I don't agree. There is a tendency for people who come here, end for some people in Fiji, to project this image of Indians controlling the economy. It is a fallacy. It all boils down to how you define economic power.

Let's take natural resources. The land, and therefore the forests, are almost exclusively owned and controlled by native Fijians. Even in the corporate sector, the largest business undertaking is the manufacture of sugar, and 80% of the shares are owned by the government. The Indians don't own this industry. They are the small sugar cane producers working on ten-acre plots. And who controls banking and insurance ? Certainly not the Indians. Most of the financial services companies are foreign-owned.

The area where the Indians are most visible is in the retail sector. But those little shops you see in the towns are small family businesses. The shopkeepers work up to 15 hours a day, and you will discover that many of them do not even own their premises; they are tenants. So the idea that Indians control the economy is a bit of a myth.

· The Constitution, and in particular the system of racial differentiation for voting and holding certain offices, is obviously a key issue for you. With the Constitution currently under review, what is your party's policy in this area ?

- The first elections under the current Constitution took place in 1992 and we took part in them under protest. We made clear that our participation should not be construed as acceptance of the system. Indeed, the sole issue on which we campaigned was our rejection of the Constitution. But we accepted the fact that we needed to get into the system as it was, and to try and create an environment where there would be widespread appreciation that it had to change. The 1990 text, in fact, laid down that it had to be reviewed by the seventh anniversary of its promulgation. I think the architects of the Constitution realised themselves that it was deficient. And we laid great emphasis on the need for dialogue; a general recognition that the country would be much better off with everybody working together and that there was nothing to be gained by oppressing or marginalising a community. And that is the kind of environment we have tried to create.

· The Constitutional review will shortly be published. What do you hope will come out of that exercise ?

- I am reasonably optimistic. I think the environment is more favourable now and there is a general recognition that the system has to change. I am sure you will get confirmation of this when you talk to the government side. We need to move away from this very polarised, compartmentalised political system to a more racially neutral one. I think views may diverge as to how far we should go. That will be the contentious issue. But I believe we will make progress.

I certainly think we will get a good report from the Constitutional Review Commission. One of our fears, when we started on this journey, was whether it would be independent and be given fair terms of reference. Largely because of the cooperative and accommodating attitude that we ourselves adopted, and to which the government responded, we were able to get a Commission that was well-balanced. We are very fortunate to have Sir Paul Reeves, a former Governor-General of New Zealand. His independence is taken for granted. The Commission also has one nominee from the indigenous side and one from the Indo-Fijian side. So we certainly expect a good report. There is already a kind of acceptance I think on all sides that political parties need to prepare themselves for a more multiracial approach to governance in the future.

· On this point, I see that the SVT (the governing party) is looking at the idea of opening up its membership to other groups.

- That's right.

· Do you think there will be many nonnative Fijians interested in joining ?

- Not straight away but at least it is a beginning. It is an acceptance that they can't remain racially exclusive. If, for example, the Commission recommends a move toward a racially neutral system - at least for a certain number of seats - then it would be important for the SVT to have non-Fijians in their party.

· Can I turn to economic issues, which I presume cannot be divorced altogether from political ones ? There is a lot of discussion about the future of the sugar industry which is tied in with the question of renewing the land leases This is an issue which is due to be resolved soon. How concerned are you about the impending decision on the leases ?

- This is something that concerns us very deeply. As you correctly observe, you can't separate the political and economic aspects. The two are very closely interlinked here - perhaps more so than in other countries - because of the land situation. The bulk of Indian peasant farmers, both within and outside the sugar industry, are on leases that will begin to expire next year. If these are not renewed, the problem will not just be an economic one but an enormous human one. What do we do with these people who all belong to a particular racial group. It really boils down to our very survival. Despite the growth in the towns, the bulk of the people are still rurally based. They are small subsistence farmers, living in the country areas with no more than 10 or 12 acres to cultivate. So the social implications of non-renewal in terms of poverty, dispossession and hardship are enormous.

· But how real is the concern ? Surely, the overwhelming economic logic is for the leases to be renewed. After all the land is being put to productive use at the moment

- Yes, but unfortunately, when you have a communal dimension to the problem, logic does not always prevail. If you think about it, there was no logic in the events of 1987. The trouble is that every issue here has a racial twist. After the coup, communal sentiments were aroused and sharpened. There was a prolonged period of anti-lndian propaganda and in that environment of anger, a highly racial constitution was adopted. There were people in positions of influence openly advocating non-renewal, threatening to take all the land back. Now they need to undo all this and it will not be easy, given the enormous strength of feeling that has been aroused. Having said this, I believe that we are now in the process of restoring sanity to our public life. It is also beginning to dawn on everybody that the sugar industry is vital for Fiji and it will continue to be so for some years to come.

· I have heard that view expressed on all sides, but I wonder if people are sufficiently aware of the implications of global liberalisation. It has been suggested that this will make sugar increasingly unviable.

- I think a lot of people are unaware of the implications, because there has been very little public education in this field. But amongst those 'in the know', there is certainly an appreciation. I am a member of the Parliamentary Select Committee on Sugar and we were recently addressed by the head of the marketing company and the head of the Sugar Commission. At that level, there is an awareness, but if you speak to the average farmer who has been growing and selling sugar for many years, he will probably assume that life will just go on as before.

Isn't it true to say that sugar depends heavily on the Lomé Convention arrangement with the European Community ?

- Very much so. In my view, the sugar industry is run so inefficiently that but for the huge subsidy we get from the European Community, it would not be viable.

Presumably, this means that measures must be taken to improve efficiency ?

- Yes, absolutely. But the first issue to resolve is the land question.

There is no point talking to the farmers about efficiency - asking them to improve their husbandry and focus on sugar content rather than the quantity of cane produced - when they don't know if they will have land to cultivate after next year. So you see all other issues have become completely subsidiary to the tenure question. At the moment, we are in a limbo. The government and the people urgently need to resolve this problem. Then we can put it behind us and address the other concerns.

Are there any other economic sectors which you feel offer promise for the future of the country ?

- Any growth outside of tourism will, I think, have to be centred on the agricultural sector. We need more agro-based industries and more diversification. We could grow a lot of other crops here - mangoes for example. We also need to improve extension services to farmers, and make an aggressive effort to identify markets. The farmers will grow the crops but they must be sure that somebody will buy them. Every year, for example, we have a glut of tomatoes - so many that they can't even give them away in the markets. This kind of problem kills the incentive to produce.

There is obviously heavy state involvement in the running of agriculture. Do you see scope for more privatisation or 'corporatisation' in line with global trends ?

- I think that growth, even in the agricultural sector has to be private-sector driven. At the same time, you have got to create the right environment and infrastructure for this to happen. Unfortunately, it keeps coming back to this question of land. If big investors, for instance, want to come here and invest in agriculture, they need to know what sort of tenure they are going to get and whether they can buy the freehold. I am sure there are people, particularly now from the Asian region, who would be interested in investing in agriculture, but the land problem is a big constraint.

Do you think Fiji will rejoin the Commonwealth at any point ?

- Well, we hope so. You know we are all very strongly in favour of rejoining. One of the things that I personally feel very strongly about is the unfortunate severance of our link with the Queen. I don't know, constitutionally, whether it can be restored. Obviously, there are difficulties in that area, but I think a large majority of ordinary people in this country would like at least to see Fiji back in the Commonwealth.

Seeking a lasting constitutional settlement

When The Courier visited Fiji in July, the report of the Constitutional Review Commission headed by Sir Paul Reeves (former Governor-General of New Zealand) had not yet been completed - and what it would contain was a major topic of speculation. As readers will see from the interview we publish with the Prime Minister and Opposition Leader, the impartiality of the three-member Commission was not in question - at least within the political mainstream on both the native Fijian and Indian sides. Nonetheless, there were doubts about whether a consensus could be found. For the Indo-Fijians, a scaling down of the 'racial' features in the Constitution was seen as a prerequisite. Yet the ruling SVT, in its own submissions to the Commission, had effectively supported the status quo. In view of this apparently unbridgeable gulf, could the compilers of the Report come up with recommendations capable of forming the basis for a lasting constitutional settlement ?

The long-awaited Report was formally transmitted to President Ratu Mara on 6 September and a few days later, it was tabled to a joint session of the Senate and the House of Representatives. It now falls to a joint select committee of the two Houses to thrash out a new set of constitutional proposals. These will be presented to Parliament for debate and decision in the first half of next year with a view to meeting the July 1997 deadline foreseen in the 1990 Constitution.

The Report of the Review Commission is lengthy (almost 800 pages) and contains no fewer than 697 separate recommendations. The key ones, however, relate to the system for electing members of the House of Representatives. Currently, separate electoral lists based on race are used to fill all 70 seats (37 native Fijians, 27 Indo-Fijians, 1 Rotuman and 5 'General Electors', covering all other races). It was widely expected that the Commission would propose a mixture of 'reserve' seats and 'open' ones, with the latter, as their name implies, being chosen by the whole electorate.

45 'open' seats proposed

This is precisely what they have done - but the suggested breakdown may have come as a surprise to some. The proposal is for 45 open seats (15 three-member constituencies) and 25 single-member 'reserve seats (12 native Fijian, 10 Indo-Fijian, 1 Rotuman and 2 'General Electors'). If adopted, the new system would no longer legally guarantee a majority for people of Fijian origin in the country's legislature. What would happen in practice would depend on a number of factors including the nature of the voting system in the three member open constituencies, the willingness of people to cast their ballots across the ethnic divide and the actual turnout of voters from the different communities. It should be pointed out, however, that native Fijians now constitute half the population, large numbers of Indians having emigrated over the past nine years. So long as communal voting patterns persist, this will presumably be reflected in the Parliamentary arithmetic.

It is also proposed that the bulk of the 35-member Senate (Bose e Cake) should be made up of elected representatives of Fiji's provinces. In the field of local government, it is suggested that the present system based on villages and provinces, which applies only to native Fijians, might be replaced by an arrangement applicable to all races. In this context, the rote of the Council of Chiefs (Bose Levu Vakaturaga) would be reduced.

Although the sections of the Report relating to representation are bound to attract most attention, the Commission also put forward a series of other proposals aimed at improving the governance of Fiji. One idea, which appears designed to alter the political culture, is for the 'Official Secrets Act' to be replaced by a 'Freedom of Information Act'. The presumption of secrecy would be replaced by a rule that official information should be accessible to the public except where there is good reason to withhold it. In a similar vein, the Report recommends an 'integrity code' to govern the behaviour of holders of public office.

Initial reactions to the outcome of the Commission's work were mixed. Key players, including the President, Prime Minister and opposition spokespersons broadly welcomed the Report but more nationalistic elements were quick to reject it and one group even mounted a ceremonial burning of the document.

It is obvious that a great many more words will be exchanged - and some of them will no doubt be heated - in the coming months. It is difficult to see how everyone can be 'brought on board' but the hope must be that a compromise can be crafted that is acceptable to the majority on both sides of the communal divide. The people of this Pacific island nation are well aware that prosperity and stability go hand in hand. The single most important achievement in ensuring stability for the longer term would be to secure a satisfactory settlement of the constitutional issue.

'Sugar definitely has a future'

This was the key sentiment expressed by Isimeli Bose, Fiji's Trade Minister, when he spoke to The Courier earlier this year. Mr Bose insisted that 'no matter what anybody says, sugar will be the backbone of this country's economy for years to come.'

When we discussed Fiji's current economic situation and future prospects with the Minister, it was not surprising that sugar should have featured so prominently. The sector faces a difficult future for both internal and external reasons. At home, the long-term leases granted to the farmers (mainly Fiji Indians) under the Agricultural Landlord and Tenant Act are due to expire over the next few years. No provision was made for their renewal and the resulting uncertainty has provoked widespread concern, not least among the leaseholders themselves. The external 'threat' comes from new international trade rules administered by the World Trade Organisation. At present, Fiji's sugar industry is heavily dependent on the preferential access to the EU market which was granted under the Lomé Sugar Protocol. No one is quite sure what will happen when Lomé IV expires at the turn of the century but it is clear that the stakes are high.

Mr Bose was quick to acknowledge the importance of ending the uncertainty facing the sugar farmers. 'But the real challenge', he said, 'is to ensure the maintenance of our markets for sugar.' He was aware of the encroachment of global trade liberalisation but stressed that the industry's leaders and the government were 'doing the work now and planning for the future.' At the same time, the authorities are clearly hoping that the European Union will be able to continue with some form of preferential arrangement after the year 2000, if only to buy time so that the industry can adapt and farmers can diversify.

On the subject of trade diversification, Mr Bose pointed out that 'the field is very limited'. He continued; 'However, since 1988, we have seen garment production picking up from very humble beginnings. By 1995, we had about F$185 million-worth of exports in this area.' He also spoke enthusiastically about the government policy of encouraging manufacturing in tax-free factories and zones. 'This developed well between 1989 and 1992 and then there was something of a slowdown.' Tax-free factories have been established in a number of locations and the first real tax-free zone is now being set up in Kalabo. Mr Bose indicated that EU assistance was being provided in this area.

Privatisation

Our conversation then turned to the changing economic role of governments - throughout the world, they are withdrawing from active involvement in industrial and commercial operations. We asked how far this process had occurred in Fiji and, in particular, whether there was a privatisation policy. The Minister replied in the affirmative, pointing out that government departments 'do not usually make very good businesspeople.' The policy, therefore, was to 'corporatise' and 'privatise', although the process is still in its early stages. The Trade and Commerce Ministry has a public enterprise unit which is responsible for drawing up a policy framework for the government. In 1995, Mr Bose explained, a public enterprise bill was presented to Parliament, 'but there were so many concerns expressed to the previous Minister that it was referred to a select committee - which, in fact was chaired by me before I took up my present poet.' The committee had now completed its work and the Minister indicated that the issue would go back to Parliament in September.

Despite the legislative delay, Mr Bose was keen to stress that his department was already working on individual programmes. The post and telecoms business, for example, had just gone through another stage towards privatisation.

There is, of course, an important distinction between 'corporatisation' and 'privatisation' - the former implies staying within the state sector but at arms-length from the administration. This point was acknowledged by our interviewee who explained that the approach was a step-by-step one. The first stage was to reorganise a department along commercial lines. Corporatisation came next 'and then finally you have privatisation by disposing of shares.'

He stressed that the most important aim was to ensure an element of competition wherever possible. 'There is no point simply moving from a government monopoly to a private monopoly', he insisted, 'although obviously, there are utilities like water, electricity and even telephones where this may not be easy.' The minister concluded; 'Where they are natural monopolies, we will regulate them.'

Our final topic of discussion was the possibility of regional integration in the Pacific.

How far had the South Pacific countries gone in this direction and did the Minister think there was a need for closer economic cooperation? Mr Bose replied that he thought economic integration was a good thing. He pointed to a document on his desk containing a draft proposal for a bilateral trade agreement with Papua New Guinea. 'We will soon be holding negotiations with them, and have also just signed an agreement with Tonga.'

The focus on bilateral trade arrangements at this stage suggests that the region still has some way to go on the regional integration path.

But the Minister nonetheless insisted that it was something 'that can and will happen'.

Our daily bread - courtesy of a remarkable Fijian businesswoman

How can a businesswomen succeed in Fiji's patriarchal society? Mere Samisoni, the entrepreneur behind the 'Hotbread Kitchen' gave us an appropriate answer when she said 'I roll with it', although the pun was probably unintentional In fact, it is difficult to imagine this dynamic lady being pushed around. Anybody who manages to build up a chain of bakeries from scratch, capturing 35% of the country's urban consumer market in the process, must have a lot of determination. At the same time, Mrs Samisoni displays a strong sense of social commitment. She believes in community values, advocates group decision-making and consensus, and even describes the tax system as 'reasonably fair'. In short, she contradicts the widely-held view propagated by lurid American TV series, that a dogeat-dog attitude is needed for business success.

In fact, Mrs Samisoni started out with the idea of working with one of the caring professions. Trained in nursing administration in Australia and New Zealand, she returned to Fiji only to find that there were no openings available. That was when she decided to go into the private sector, establishing 'Samisoni Enterprises'. And over the years, she has succeeded in building up one of the largest bread-making operations in the country. The Hotbread Kitchen operation is highly decentralised with the bread being baked in different locations for sale through the company's local outlets. Her business is also the first Fijian one to franchise out its operations. And having already won a big chunk of the urban market, she is now looking to expand operations in the rural areas.

Samisoni Enterprises, of course, is not simply a bread-making operation. The company now offers a line of 62 separate bakery products, with some local adaptations to suit varying tastes. It employs some 275 staff with perhaps another 50 working in the related franchise operations. And the business had an important breakthrough when it won the contract for 'MacDonalds' in Nadi. With branches of the famous hamburger chain likely to open in other parts of Fiji, this could be the start of something big. In fact, there is even a suggestion that Fiji could be used to source Macdonalds' operations in New Zealand, the rolls (or buns, as the Americans like to call them) being exported frozen.

Constant quality

For Mrs Samisoni, the key to a successful and profitable operation is 'constant quality' and unfailing attention to customer service. As she puts its, 'if you let quality slip just once, you can end up losing customers for a very long time.' Baking is a labour-intensive business and she is keen to stress the importance of developing people's abilities - in particular, the human relaitons skills of those who deal direct with the customer.

As if running a business wasn't enough, Mere Samisoni is also busy completing a Masters in Business Administration (MBA) at the University of the South Pacific, with a thesis on indigenous business. From what we discovered, speaking to this remarkable Fijian entrepreneur, she should have been helping to teach the course!

Viti Levu - island of contrasts

Anyone from overseas who is travelling to the Fijian capital, Suva, will soon discover that the country's largest island is a very diverse place. Roughly circular in shape, Viti Levu provides more than half of Fiji's total land area and is home to about three-quarters of the population.

The journey to Suva on the south-east coast will almost certainly involve transiting through Nadi International Airport (pronounced Nandi) which is situated in the west. This is the country's only major international gateway and while it is ideal for tourists heading for the resort hotels, it is less convenient for business travellers whose destination is Suva. Their journey has to be completed either by road (which takes several hours) or on one of the small commuter planes which ply regularly between Nadi and Nausori (itself a half-hour drive from the capital).

The biggest surprise to those who are unfamiliar with the country is that the west and the south-east have very different weather patterns. When your aircraft lands at Nadi, the chances are high that the sun will be shining. On reaching Suva, you are more likely to encounter rain. This part of the country enjoys - if that is the correct term - a micro-climate which is good for tropical vegetation but less appealing to human beings. The 'blame' for locating the Fijian capital in such a spot is said (not too seriously) to lie with the country's former colonial rulers. According to the story, a British envoy visited Suva on one of its rare sunny days and, on the strength of this, designated it as the seat of administration. The British can hardly deny their involvement since it was in 1882, during the early years of colonial rule, that the capital moved from Levuka (situated on the much smaller island of Ovalau). But the key reason was almost certainly the fact that Suva, with its large bay, could be developed as a port. Whatever the explanation, one must have some sympathy with the foreign diplomats who keep a raincoat or umbrella to hand at all times, and yet are viewed with envy back home because they have a 'paradise' posting.

To be fair, Suva has attributes other than its weather which make it an interesting place. It has, for example, some very attractive architecture, both local and colonial. The views across the bay can be dramatic - and, in this respect, the rolling cloud formations may actually enhance the picture. And the centre of the city buzzes with activity (except on Sunday because of the Sabbatarian influence).

The population of the greater Suva area is about 160 000. This may not be enormous, but it is the largest concentration of humanity to be found between Hawaii and Australia. In some ways, it is the 'capital' of the South Pacific - a point which is underlined by the fact that the Forum Secretariat is based here. It is also the site of the University of the South Pacific's main campus. The local population is mainly ethnic Fijian but there are Indo-Fijians as well as citizens of Chinese and European extraction. Add to this the diplomatic corps, foreign businesspeople and students from other parts of the region, and you get a very cosmopolitan mix. This is reflected in the variety of cuisines available in the local restaurants.

The western part of Viti Levu is also cosmopolitan but in a very different way, with a stronger Indian influence and, of course, a constantly changing tourist population.

Most of the island's inhabitants live a relatively short distance from the sea. Thus, in demographic terms, Viti Levu is like a doughnut with a thick layer of humanity around the edge and a hole in the middle. The analogy may not be entirely apt since the 'hole' is, in fact, a spectacular mountainous area. This makes the road that runs round the island a key arterial route. Meanwhile, those who choose to fly from Nadi to Suva, assuming they are not of a nervous disosition, can enjoy the experience of travelling below the height of the surrounding peaks.

The few people who do occupy the central region live in traditional Fijian villages and have a lifestyle far removed from either the town dwellers or the sugar cane farmers. Its size may be little more than ten thousand square kiLométres but Viti Levu is truly an island of contrasts.

Fiji-EU cooperation: comprehensive package

by Ernst Kroner

Fiji was a signatory of the first Lomé Convention in 1975 and, to date, the country has been allocated some ECU 190m in EU development cooperation funds.

Starting with a relatively modest ECU 9.9m under Lomé I, the national indicative programme rose to ECU 13m under the following Convention. Without neglecting rural development (feeder roads in Vanua Levu), under Lomé I most of the resources were devoted to transport infrastructure (a main road on Vanua Levu). Under Lomé 11, cooperation concentrated clearly on agriculture and rural development, in particular by means of the funding of microprojects, with infrastructural programmes (the extension of the Vanua Levu road, social infrastructure) taking second place. Under this Convention, a new field of action was also addressed: trade development.

Tax free zone

Trade development was addressed further under Lomé III (6th EDF, ECU 20m, of which ECU 5m in special loans), with support given to an Investment and Trade Development Programme. The longer-term objective of the project was to widen the economic base of Fiji and to create employment. The more immediate objective was the i establishment of a Tax Free Zone near Suva. In order to promote this scheme and to secure markets for exporting the goods which would eventually be produced, the project included a programme of trade and investment promotion to be implemented by the Fiji Trade and Investment Board. Due to problems linked with identifying an appropriate site, the project, which had been given the go-ahead in 1990, only came on stream in 1995.

Rural and agricultural development continued to be one of the main sectors of cooperation, with the funding of three major projects. The first was a coconut rehabilitation and development project, situated on the island of Taveuni, which aimed at improving the productivity of coconut plantations through the introduction and multiplication of high yield hybrids. The project also provided for the establishment of a 30 hectare coconut nursery centre, which was expected to finance itself through the sales of seedlings. EC support for this project ended in 1992, since when the scheme has been taken over by the Government. A second project (a large-scale microprogramme divided into two sub-programmes) aimed on the one hand at the construction of access roads to facilitate the development of cocoa plantations, and on the other at the introduction and development of pineapple plantations in Vanua Levu. The first component was closed after disappointing results. The second component, however, produced very interesting and promising results, which will, however, need private and governmental support in order to become sustainable. A rural electrification project involving 28 rural electrification schemes and the supply and installation of a small power plant is still ongoing.

Developing human resources

Under Lomé III, the formerly prominent transport infrastructure sector lost some importance. The Kubulau Peninsula road project on Vanua Levu brought to an end the work started under previous Conventions. This road, which filled the last gap in the circuminsular road, was opened on in July 1994. Lomé III also saw the beginning of human resources development as a new theme of cooperation, with Technical Assistance funded for the logging school. This area, embodying strong links with forestry and environmental issues, has been further developed under Lomé IV with the reconstruction of the school burnt down in 1993, and the enlargement of the training and education provided to what now constitutes a Forest Training Centre.

The national indicative programme relating to the first protocol of Lomé IV (7th EDF, ECU 22m in grant aid) identifies rural development and social infrastructure as the sectors of concentration to which 65% of resources are to be devoted. The remaining 35% will be used for non-focal activities, including trade and services, tourism, cultural cooperation, training and technical cooperation.

Building bridges

Unfortunately, it was only following the very destructive cyclone Kina in January 1993 that cooperation activities could start in the form of the rebuilding of four bridges either severely damaged or completely destroyed by the post-cyclone floods.

Work on two smaller bridges of major importance to Viti Levu (Korovou and Vunidawa, ECU 1.135m) was started in 1994 by the Public Works Department and completed in January 1995.

The Financing Agreement for the two major bridges (ECU 10.24m) was signed in June 1994 and provides for the rebuilding of the bridges of Ba and Sigatoka. These form part of the main road around the island of Viti Levu and are therefore vital for the movement of people and goods on Fiji's main island. The new bridges, 190 and 182 metres long respectively, will be two-lane, and will provide for footpaths and utilities. To enable the traffic to by-pass the often congested towns of Ba and Sigatoka, new sites for both bridges have been chosen, which also call for the building of new approach roads. Building works were under way in early 1996 and completion is expected by April 1997.

Non programmable aid for Fiji has been considerable over the years. While Stabex transfers for losses on coconut oil (totalling ECU 5.4m under Lomé I - Lomé III) came to a halt under Lomé IV (because levels of exports fell below the required dependency threshold), emergency aid (total ECU 9.5m) has continued, unfortunately, to be needed. Time and again the islands have been hit by cyclones (the most recent occasion being in January 1993, when the EU made available ECU 1 m for food rations following cyclone Kina).

In the past, a significant feature of EU-Fiji cooperation was the credits provided by the European Investment Bank. It was very active under Lomé I to Lomé III, providing loans from its own resources to a total value of ECU 87.5m with a further ECU 6.1 m allocated in risk capital. Loans went to the energy sector (hydropower scheme), industry (wood processing) and services (telecommunications, sea and air transport). Considerable interest rate subsidies (totalling ECU 14.1m) have also been made available under the various EDFs in support of these loans. More recently, the EIB has financed an aircraft maintenance centre (1991) and a telecommunications project (1995).

Trade cooperation

Over and above financial cooperation, Fiji benefits from the second largest quota (165348 tonnes per annum) under the Sugar Protocol annexed to the Lomé Conventions. This covers some 45% of its total sugar exports. The yearly benefit from this provision is estimated at between ECU 45m and ECU 55m - in other words, only slightly less than the total of all programme aid granted since Lomé I (ECU 64.9m). About two-thirds of these benefits reach the farmers, so that the EU subsidises every sugar smallholder, on average, to the extent of some ECU 1500 a year.

Recently, Fiji's quota under the Sugar Protocol was increased by 881 tonnes, as a result of the reallocation of the shortfall of deliveries by Barbados. Furthermore, Fiji benefits from an annual special tariff quota to the tune of some 30 000 tonnes up to the year 2001.

Industrial development and external trade have been supported by the relaxation of the rules of origin for exports to the EU of canned tuna to the extent of 500 tonnes a year from 1993 to 1996. A similar arrangement, applicable for certain quantities of garments up the end of 1993 was recently extended to the end of 1996.

Fiji's main exports to the EU (sugar, fish and garments) - and the resulting surplus in its trade relations with the EU - are consequently highly dependent upon the continuity of these preferences.

Support for tourism

In the field of services, and specifically in tourism, the EU - through its support of the Tourism Council of the South Pacific - has contributed to the fact that every sixth tourist or so arriving in Fiji comes from a member country of the Union. Tourism being by far Fiji's most important source of foreign exchange earnings, receipts from European tourists amount at present to some ECU 30m, and are greater than those from the export of fish and fish products

Taking the Sugar Protocol into consideration, the EU is by far the most important of Fiji's development partners, followed by Australia. The country also benefits from bilateral cooperation arrangements with EU Member States (UK, France, Germany).

Tonga

Hoping to maintain harmony

'None of the most civilised nations have ever exceeded these islanders in the great order and regularity maintained on every occasion, in ready and submissive compliance with the commands of their chiefs, and the perfect harmony that subsists among all ranks.'

These were the words of Captain Cook who visited the Tonga archipelago several times on his voyages around the world in the eighteenth century. The famous explorer was obviously impressed by the social organisation of this island nation and, although it is more than two centuries since he undertook his Pacific voyages, many of his observations hold true today. Talk of submissive compliance may no longer be appropriate, but in contrast to the turbulence of much of the outside world, Tonga certainly ranks as a peaceful society, which is respectful of hierarchies and strongly attached to 'traditional values'.

The reference to harmony is particularly apposite, as The Courier discovered when we visited Tonga earlier this year. It was fortunate that our trip coincided with the King's birthday celebrations and we had the opportunity to enjoy the superb choral music which plays a central part in many important ceremonies here. Like their Polynesian cousins in Western Samoa (featured in our last issue), the Tongans seem to have a natural flair for music and a talent for spontaneous harmony. The question is whether these 'Friendly Islands' - a name they certainly deserve - can maintain their reputation for social harmony into the third millenium.

In order to answer this, one has to identify where discordant notes could creep in. The biggest challenge appears to come from the process of globalisation. New technologies, particularly in the field of communications, are rapidly breaking down barriers. The tide of the international economic system, with its emphasis on mass production, con sumerism and free trade, is lapping at the islands' shores And political systems everywhere are under pressure to con form to a 'democratic' model which some would argue places the individual above the community.

Of course, external influences can be both positive and negative Cultural exchanges can be enriching, and new ideas and techniques may offer opportunities for improving the quality of life. The key is to adapt without undermining the social fabric. And in Tonga, as in other countries, a harmonious future will ultimately depend on the way the country evolves both politically and economically.

Looking first at the current political set-up in Tonga, one cannot fault the use of the term constitutional monarchy which is the preferred description locally. It is important, however, to recognise that the constitution - which dates back to 1875 - gives considerable power to the monarchy. There is a measure of democracy in that all adults over 21 have a vote, but they only elect nine of the 30 Members of Parliament A further nine are chosen by the country's 30+ nobles while the twelve Cabinet Ministers, who sit in the House ex officio are nominated by the King. Tonga may' be small (it has fewer than 100 000 inhabitants) but it nonetheless attract: the interest of political scientists as one of the few remaining states with a hereditary ruler who wields substantial power.

Critics of the system view it as an anachronism, although their emphasis is on reform rather than revolutionary change. Defenders argue that the arrangement works well in a small, homogenous nation which values its unique culture and traditions (even if the constitution contains many 'British' elements). The latter also point, with some justification, to the attitude of the population. There are dissenting voices but the majority appears to be happy with the existing set-up, thereby lending it democratic legitimacy - at least indirectly.

There may not, at present, be any overwhelming demand for constitutional reform but things can change. In particular, a people's view of their political system and how it might evolve is likely to be influenced by the prevailing economic conditions.

Economic outlook

Tonga's economy is not exactly booming with the most recent estimates suggesting a 2% GDP drop in 1995-96. Several of the traditional problems faced by developing countries are to be found writ large here. The local market is not just small but tiny by global standards, and this makes it exceptionally difficult to achieve economies of scale. There is heavy demand for imported manufactured items and few viable export opportunities to balance the equation.

The education system compares favourably with those of other developing nations but the pool is so small that Tonga inevitably suffers from human resource shortages. This is exacerbated by a steady 'brain drain'. Qualified Tongans, who may already have experienced life abroad at college or university, are tempted by a range of attractions including higher salaries, better housing and more extensive career prospects. The skills shortage is particularly severe in the medical profession. In a recent issue of Matangi Tonga (the 'national news magazine'), it was reported that the country would only have one anaesthetist by 1997 - with a local doctor observing wryly that there was no need for one since the main hospital's only specialist surgeon had recently left to take up a post abroad.

Although it would be better for Tonga to retain its qualified people, the fact that the country 'exports' labour does have its positive side. Tongans have a strong sense of family and community, and overseas workers send significant amounts of money back home. This injection of 'foreign' funds boosts the local economy and reduces the overall balance of payments deficit.

Agriculture

Agriculture is by far the most important economic sector, with most crops being grown for local consumption. The islands benefit from a fertile soil and a tropical climate, allowing the cultivation of a wide variety of fruit and vegetables. All land is vested in the Crown, with estates allocated to the nobles. By law, each adult male is also supposed to be allotted three hectares although there is not enough land to go round. Despite this difficulty, which means that some people do not receive their allocation, the result is that most Tongans are involved in farming. The advantage of the arrangement is that it guarantees a living for the bulk of the population even if their cash income is low. On the other hand, it is obviously a feudal system which favours the upper echelons of Tongan society. In addition, it tends to hinder the development of larger units which could benefit from economies of scale. While anxious to make farming more efficient (and export-oriented), the government currently has no plans to introduce land reform.

In export terms, the main crop is squash (pumpkins). Production increased dramatically in the early 1990s when a market niche was identified in Japan and it soon became the country's biggest foreign exchange-earner. More recently, income has been depressed, with overproduction in 1994 leading to a drop in prices, and poor rainfall the following year reducing yields. The November export figures for the last three years (November is the month when squash deliveries peak) illustrate the extent of Tonga's reliance on this single product. In November 1993, the country's overall export income was T$15m - more than half of the annual total. Twelve months later, the figure had dropped to T$9m and last year, it fell below T$6m. When The Courier visited Tonga, the authorities were talking about limiting the amount of squash exported to Japan this year to 15 000 tonnes, in the hope of maintaining premium prices.

The government is also acutely aware of the risks of mono-dependence and is looking for other outlets for its agricultural produce. Demand for copra, Tonga's traditional export, has apparently been reviving, but the price has not been high enough to attract local farmers back into the market. Other crops sold abroad include vanilla, cocoa, coffee, black pepper and ginger.

One farmer who is doing his bit in the quest for export diversification is Masao Soakai, a former general manager of the Copra Board. He is now the managing director of a company that specialises in the import and export of produce. This energetic 73 year-old gave us a guided tour of the plots he had rented. He cultivates an astonishing range of different crops which include potatoes (for Fiji), cassava, taro, yams, carrots, broccoli, cauliflowers, strawberries, bananas and capsicums. He also rears cattle and pigs (a Tongan tradition). Masao Soakai stresses the importance of rotation in maintaining yields and believes strongly in planting for the future.

Other sectors

Wherever you happen to be in Tonga, the Pacific Ocean is never far away. Evidence of the country's maritime tradition can be found in accounts of the appropriately named William Mariner (see box article on this page). But while, in the past, Tongan vessels sailed far and wide, and the country has a huge exclusive economic zone (EEZ), the fishing industry is relatively undeveloped. The sector generates about 5% of GDP. A project sponsored jointly by the FAO and the UNDP revealed that there was considerable scope for expansion, both in the inshore and reef zones and in the deep sea area. The main species which could be exploited commercially are albacore, skipjack and yellowfin tuna. Tonga has received assistance to develop its fisheries from the USA and Japan, and the government has offered tax advantages in the hope of promoting investment, but there is still a long way to go before the country realises its full potential in this area. Hitherto, the country has not licensed foreign vessels to fish in its waters but there is talk of this policy changing.

Tourism could also generate a lot more income although it currently faces a number of infrastructural and practical constraints. The government is committed to expanding the sector but Mrs Papiloa Bloomlield Foliaki, the owner and manager of Nuku'alofa's third largest hotel (the 'Friendly Islander') feels that a lot more could be done. She pointed out to The Courier that a healthy tourist sector would provide employment as well as stimulating new business for food producers, builders and craft industries. She focused, in particular, on deficiencies in training and marketing, and suggested that some of the resources allocated to agriculture might be better spent in tackling these.

Tonga's natural assets make it a 'dream' location for visitors looking for a complete change of scene - particularly if they happen to be keen on sailing, snorkelling or scuba diving. The problem is that the country is so far off the beaten track that it is expensive to get to (some would see this as an advantage in deterring mass tourism). Nothing much can be done to change this but it does mean that they have to aim at the upper end of the market. This requires top quality accommodation - of which there is a distinct shortage at the moment. As regards marketing, Mrs Foliaki was hopeful that the recent formation of a hotel association would enable the Tongan tourist industry to raise its profile abroad. Despite her optimism - echoed by all those we spoke to in official circles - the latest figures for visitor arrivals show a downturn.

In the manufacturing sector, the story is, sadly, one of long term decline. Clothing production ceased in 1994 and the output of leather items has been falling. There are very few industrial activities in which Tonga has a comparative advantage (whether actual, or potential) and this is something which is recognised locally. There may be some scope for adding value to agricultural products through processing but it is unlikely that industry will take off in a big way in the foreseeable future.

The sale of passports (see the interview with Prime Minister Baron Vaea) is an issue which attracted publicity - not all of it favourable - some years ago, when the government launched the TPPP (Tonga Protected Person's Passport). This was designed to be a travel document which did not confer the right of residence in the country. The authorities adopted the scheme with an eye firmly on Hong Kong, a British colony which is due to be transferred to China in 1997. Some passports were sold but the project never really took off as the immigration authorities of other countries refused to accept the document. Now there are suggestions that the idea may be revived, although this time involving normal passports.

The foregoing survey of Tonga's economy does not paint a particularly happy picture but it should be stressed that there is very little real poverty in the islands. In many ways, the informal economy is more important, and subsistence agriculture and fishing ensure that people do not go hungry. With their traditional family structures and strong attachment to the Christian faith, the Tongans have not yet encountered many of the social problems associated with more consumption-oriented societies. But to paraphrase a famous saying, 'no nation is an island' nowadays - even if it happens to be surrounded by water! In an era of increasing globalisation, the key question is how to manage change. Let us hope that the people of Tonga can find the right answer.

Interview, Prime Minister Baron Vaea

'Constrained by our geography'

No-one can accuse Tonga's Prime Minister of being a starry-yed optimist. As the following interview reveals, Baron Vaea, who heads a twelve-member ministerial team, is refreshingly honest about the economic difficulties facing his small island country. The Courier interviewed him in July, at his office in Nuku'alofa.

· You have suffered a GDP drop and a general slowdown of activity in recent years. What is the government doing to restore the situation ?

- It is true that the economy has been declining. The main cause is the excessive demand from the private sector for imports from New Zealand and Australia, combined with diminishing exports. Our exports fell when the price of copra dropped. Another problem is New Zealand's quarantine rules. New Zealand is very particular on quarantine against insects, notably fruit flies, which may damage their own export trade. We have endeavoured to balance this out by selling squash to Japan and indeed, it has been a saviour as far as our economy is concerned. Squash is something our farmers know how to grow. Of course, the market goes up and down. Recently, we made the mistake of over-producing and quite a lot of the crop could not be sold abroad. I think our farmers are now realising this, and that they have to plant according to the quota that we ourselves have imposed. Tourism is another important area although levels of room occupancy are very dependent

on the economic situation in other countries. Then there are passport sales.

· Is this something you are still doing ?

- Yes, but it has been hit by technical difficulties. A number of Hong Kong Chinese bought our Tongan Protected Persons Passport (TPPP) in the hope that they could travel. The immigration authorities in other countries decided they would not accept the document so this source of income dried up. We have changed to national passports which people can use to travel. We are hoping to revive this in order to suit the conditions of the Hong Kong people.

· Is this being done on the assumption that the people who purchase such a passport would not ultimately settle here ?

- Yes. The main reason people in Hong Kong want a passport is to keep open the option of leaving after the changeover.

· Has this policy prompted any criticism from other countries ?

- No. The main problem is the Chinese themselves who are due to take over Hong Kong next year. It is possible that they will not recognise these passports. We are planning to have discussions with the Chinese on this.

· Going back to the agricultural sector, are you not putting too many eggs in one basket in focusing so heavily on squash. What efforts are you making to diversify ?

- We have just signed a trade agreement with Fiji. They are such a close neighbour yet we have had virtually no trade with them. This should change with the agreement, to the benefit of our economy.

· What products are we talking about here ?

- Mainly vegetables, particularly those that are favoured by the Indian community, such as chills and spices. A trade mission has just returned from Fiji where they picked up a number of orders. The representative of a group of growers also recently returned from Japan. He took a sample of dried pawpaw, a crop which is popular with the Japanese, and apparently received an excellent response. This is an area which is promising.

The key issue, however, is the amount of space available in the aeroplane. You can't ask everyone to grow pawpaw when the airline tells us that they can only take eight tonnes at a time. Only a limited number of farmers can be involved, so that we can continue to supply the tonnage that the airline can handle. We will encourage the rest of the farmers to concentrate on other products.

· What is your policy regarding foreign investment ?

- We encourage overseas investors to engage in activities that local people are not involved in. Land leases are available for anything they want to do which fits in with this policy.

Tonga has an extremely limited manufacturing sector and there appears to have been a long-term decline. What prospects are there for reversing this trend ?

- For many years, the policy of the government has been to encourage exports. We have had entrepreneurs here who have exported things like woollen garments, small boats, horse saddles and so on - but it didn't last. The sad fact is that hardy anything is exported from Tonga. The main reason is that we are constrained by our geography. We are so far away from the main markets. The raw materials have to be brought in and by the time the article is finished, there is no way that it can compete in price terms. This has always been our problem. We are always looking for new markets but it is not easy.

A second limitation is the private sector in Tonga. This is weak in terms of technology, marketing and product quality.

· What about further processing of local products - perhaps value-added agricultural activity ?

- Yes, this is something that we would hope to do, though the same kinds of problem arise. People don't set up the processing plant because they say there isn't enough local cultivation to make it worthwhile. And the farmers don't grow the crop because they say there is no market.

· So it is 'chicken and egg' situation ?

- Yes. The result is that people only grow for home consumption.

I should mention here that there are other resources we have yet to exploit, notably in our waters. We have reserved these for ourselves and do not allow foreign fishing vessels. So we are trying to recover resources from the sea.

There is also the possibility of drilling for oil. Research ships operating in the Pacific have found a limited number of locations where it would be worth looking for oil reserves and two of them are in our waters. We have been publicising this with a view to encouraging further exploration.

· This would presumably involve drilling licences for oil multinationals.

- Yes. Some companies have done this in the past although only on a small scale. The answer we got from the oil companies is that they are interested in exploitation - but not now because of the low oil price. When the price goes up, I think we may attract interest again but that is clearly only a long term possibility.

· A lot of young Tongans leave the islands to work overseas. What is the explanation for this ?

- It is true that a high percentage of our population migrates. These are people in search of a better life, who seek to reap the benefits of their abilities by working overseas. They can have a nice house and get a good education for their children.

I should stress that we have a good education system here but there is a heavy emphasis on gaining qualifications in order to get into the civil service. Where we are lacking is in the field of technical education. We have some facilities of course - an Institute of Science and Technology and a Marine Institute to train people to go to sea. This is very much in its infancy and we hope it will help for the future. But even some who have gone through this system end up looking for jobs overseas.

· Turning to political issues, you have a monarchy here which is still very powerful. Do you anticipate any changes in the system ?

- There has been some public pressure for change. I don't think people want a radical upheaval but there is a feeling in certain quarters that the present system could be improved upon. As you probably know, Parliament has nine members elected by the people and a further nine selected by the 28 nobles from among their own number. The third component is the government - 12 ministers who are appointed by the King. It has been suggested that qualified people who don't presently sit in Parliament should be there to help deal with the economy. One idea is to change the Constitution so that whole population elects 30 members. The King would then choose his ministers from these 30.

· Has this idea made any headway ?

- No, not so far. We are maintaining the old system. The proposal has been aired but it hasn't been passed in the House. There are a lot of people, I think, who prefer the present system because they feel the monarchy works for the benefit of all the people. Would a new team necessarily stick to this principle? There must be a danger that they would tend to favour just one section of the population.

· Can you comment, finally, on Tonga' relations with its partners in development cooperation ?

- As you know, we have good relations with the EU through the Lomé Convention. We also have strong bilateral links with Australia and New Zealand which have been giving us assistance. But I think we have to face up to the fact that the aid cannot continue. The UK, for example, used to provide us with our judges. That has been taken over by Australia and New Zealand - but for how long ? I think it is bound to be phased out.

So we will continue to have relations with our partners, but we need to recognise that they are concentrating their efforts now and adapt accordingly.

Profile

General information

Area: 669 km². Tonga has about 170 small islands and four main island groups (Tongatapu, Ha'apai, Vava'u and the Niuas). It has an Exclusive Economic Zone of approximately 700 000 km,).

Capital: Nuku'alofa (situated on Tongatapu)

Population: 99 000 (1994 census)

Population density: 149 per kilometre²

Life expectancy at birth (1992): 68 years Official languages: Tongan and English Currency: Pa'anga (T$) made up of 100 seniti. The currency is pegged to the Australian dollar. In September 1996, 1 ECU was worth T$ 1.57 (US$1 T$ 1.22)

Tonga

 

Polities

System of government: Constitutional monarchy based on the Constitution promulgated in 1875. Considerable powers remain vested in the King. The Parliament has 31 members - the Speaker, 12 ministers (including the Governors of Vava'u and Ha'apai) who are appointed by the King, 9 nobles chosen by the 33 members of the nobility and 9 People's Representatives elected by universal suffrage. There are no political parties although there has been talk of setting up a 'people's Party'. The twelve cabinet ministers hold office until they reach retirement age.

Head of State: King Taufa'ahau Tupou IV

Prime Minister: Baron Vaea of Houma

Economy (estimated 1995 figures unless otherwise stated)

Annual GDP per capita: approx US $1900

GDP growth rate: -2% (1995/96)

Principal exports: squash, vanilla, manufactured goods and fish. In the early 1990s, squash accounted for more than half the country's total export income. In 1995, however, the harvest was affected by drought and exports dropped significantly.

Balance of payments: A trade deficit of US $38.8m (exports - US $18.3m, imports - US $57.1 m). The current account deficit is much smaller thanks to 'invisible' earnings, notably from tourism and remittances from Tongans living overseas. Inflation rate (April 1995): 4.5%. Total external debt: T$ 44m (1993)

Sources: Tonga in Profile (on the Internet - http: 11l www. netstorage. com/kami/ tonga) Economic Intelligence Unit Country Report 1996.

Interview with people’s representative, Teisina Fuko

'There is much more political awareness'

People's representative, Teisina Fuko offers an alternative view

While Tonga has no political parties, and the main levers of power remain in the hands of the monarch, it would be a mistake to conclude that there is no questioning of the status quo in this small Pacific kingdom. As The Courier discovered on its recent visit, Tongans are happy to speak openly about their political system and to criticise (or praise) aspects of it me local media may not be particularly extensive but it nonetheless allowe for different viewpoints to be expressed, including criticism of the authorities.

Those who advocate political reforms in Tonga face something of an uphill struggle. There is no overwhelming demand for change and although the lever of popular support for the current system is not easy to judge, there appears to be widespread acquiescence - which effectively amounts to the same thing.

In recent years, the focus of 'opposition' has tended to be within the ranks of the people's representatives who sit in Parliament We spoke to one of these elected members, Teisina Fuko, who comes from the Ha'apai island group and began by asking how democratic the thought the system was.

- I would say about 50%. Up until the 1970s, the system was very traditional but we now seem to be westernising quite quickly. People are returning from overseas with different ideas and this is having an impact on the way we are governed.

· Do you think you will ultimately have a Parliament whose members are all elected by universal franchise ?

- I would say it is more certain now than ever before. There is much more political awareness. We see it in the schools, where children are being taught to think independently. There are also the new economic trends - commercialisation and the focus on foreign earnings which imply the need for modernisation.

· You sound quite enthusiastic about the 'westernisation' process. Are you not concerned about the possible negative aspects in terms of the survival of your traditional culture ?

- I think we have to strike a balance. We mustn't go to extremes. Our culture and traditions are important but there are new things we need to take on board and some old habits we should drop. Take business opportunities: we have to be more democratic in this area. If one group has all the power then they will tend to favour their friends which isn't necessarily efficient. What it boils down to is a lack of checks and balances.

Given the present economic difficulties, I also think we need to move quite quickly. I recently wrote an article arguing that the King should transfer his power to appoint ministers to the people. Ministers should be elected so that they can be accountable to the taxpayer. We are a close-knit family here and there is no question of getting rid of the monarchy. But we need to sit down and hammer out a compromise which will allow us to improve our economy and make it more competitive.

Let me give you a practical example. Defence is now third on our list of priorities. That doesn't make sense to me. We would be better spending the money on economic development. We also need to boost the private sector so it can create jobs, instead of tying its hands. At present, 50% of our revenue goes on paying civil servants. What for 7 It may create employment, but it is not productive. So the government has to be minimised. Having said this, there are some positive signs. I am glad, for example, to see new blood being brought into the ministerial team.

· Parliament is currently composed of three groups - twelve ministers, nine nobles and nine people's representatives. On paper, that suggests that no group can dominate ?

- Yes, but the ministers and nobles often work together and we are outvoted. It is difficult to imagine the nobles saying 'no' to the King although, to be fair, they do sometimes abstain and some of them recognise the need for certain reforms to the system.

· Turning to the economy, which areas do you think offer the best development prospects ?

- Tonga's potential lies in fishing. We are an island nation that has always depended on the resources of the sea and we have the necessary labour force. What the people need is the know-how - advanced technologies to develop this sector. We also have to set up credit programmes so that people can invest in boats and equipment. I believe we should spend a lot more on fishing.

Unfortunately the government does not take the same view. It has put a lot of resources into small industries, airlines and so on. Yet the reality is that these sectors are in decline. Manufacturing has fallen and so have agricultural exports. Fishing is the only sector that is expanding.

· What about the prospects for agriculture ?

- I think we have reached the limit in this sector. There is very little scope for expansion. I also believe we should be concentrating on what we can produce to use locally. There is very little more we can do in terms of commercial exploitation. Tonga is somewhat overcrowded and we cannot use too many chemicals because the water table is so low.

· One local issue, which presumably has economic implications, concerns the possible expulsion of foreigners who have been here for a certain amount of time. Apparently, the decision has been taken not to renew certain residence permits. What is your view on this ?

- I think Tonga should encourage skilled people who are here to stay. We should use make use of their skills, particularly where they have expertise that is lacking locally. At the same time, there are some people here who just came for a visit and ended up staying without doing anything very productive. There are also a number who came after the coup in Fiji and I think we should give them some leeway.

On the whole, I don't think it is a big problem. Tonga has traditionally been very liberal in the application of its immigration law. We have never been colonised so we tend not to have a suspicion of foreigners. And whatever we do must be in accordance with the law.

· Could you sum up your vision for the future ?

- You only need to look around you to see that we have a youthful population here: a lot of young people who need to be catered for. We are investing heavily in education which I think is good but we need to do more to adapt to the changing world. We were peaceful in the past because most Tongans were on roughly the same level in terms of wealth. Now the poor are getting poorer while the rich get richer. This could lead to an increase in social tensions. With a more democratic system, we should be able to close the gap and work for a peaceful and more prosperous future.

Seeking business overseas

New Minister outlines economic strategy

If the policy of appointing Ministers for life - or at least until retirement age - is maintained, then Dr Giulio Masasso Tu'ikolongahau Paunga can look forward to a long career in the Tonga Cabinet. At just 32, he has recently been been given the job of Minister for Labour, Commerce and Industries (with responsibility also for tourism). He may be relatively young, but the new minister has impressive academic credentials. He took a master's degree in Japan (in Japanese) and as we soon discovered, he has some new ideas about how to achieve economic development in his country.

Dr Masasso's portfolio covers a wide range of economic activities and we began by asking what he thought the main focus of his work would be. He identified three areas - agriculture, which is the single most important sector; fisheries which has potential for growth; and tourism. He would also like to see more manufacturing, particularly for export, but acknowledged that the current prospects in this area were very limited.

Looking first at agricultural production for export, we noted that a significant change had taken place over the last decade. Coconut-related products had been largely replaced by squash, a 'gap' in the Japanese market having been identified when other sources of supply were not available. Tonga may have been the first to spot the opportunity but was there not a danger that other countries might 'muscle in'? The government was 'very aware of this danger', said the Minister and was trying very hard to diversify its export products. He mentioned vanilla, papaya, beans and, in particular, carrots. The last-mentioned crop grows well in the islands and there is apparently a growing taste for carrot juice in Japan. A list of products with export potential, which could be grown successfully in Tonga, had been drawn up in cooperation with the Ministry of Agriculture, and Dr Masasso's department would be actively seeking new business overseas.

The government is obviously interested in developing trade with Japan and other countries in Asia, but the Minister felt that New Zealand and Australia were likely to remain the principal markets for Tongan farm products in the future. He was looking forward to easier access to New Zealand once new quarantine facilities had been set up at the international airport on Tongatapu. This, he said, should allow for a larger throughput of export crops.

Efficiency, of course, is the key to winning and keeping overseas customers. With this in mind, our discussion turned to the land tenure system. The allocation (at least in theory) of parcels of land to all male Tongans discourages the development of larger farms or plantations. Was this the most effective way of exploiting the country's fertile lands? Dr Masasso acknowledged that the system hampered efficiency but stressed that the question was a very sensitive one. The right to cultivate a plot of land is deeply rooted in Tongan culture, and radical changes to the property laws are not on the agenda. As the Minister put it; 'We are trying to maximise our efficiency under the present system of land tenure.'

Turning to tourism, Dr Masasso observed that 'this has been the most stable industry over the past ten years,' bringing an average of T$ 12 million into the country every year. In looking at possible growth, however, he stressed the need to take account of the environmental and cultural impact. 'Tonga is a very small country, and it would not be right to build too many hotels and related facilities. It might be possible, but the long-term effects would be a little too much for the country.' Dr Masasso said he favoured tourism which has 'e closer relationship with people - a cultural exchange, targeting people who really wish to understand our country.'

Fishing is a sector which appears to have huge potential given the size of Tonga's exclusive economic zone. Dr Masasso explained how Japanese assistance was being used in a boat building scheme designed to produce vessels that local people could afford. He also spoke enthusiastically of the research that had been carried out to determine the nature and size of the fish stocks. He recognised, however, that while most of Tonga's fishing was inshore, there was scope for a great deal more revenue from deep-sea fishing. In this connection, negotiations were underway with the United States, Taiwan and Japan, to allow vessels from these nations to fish in Tongan waters.

The conversation then moved on to the more general issue of entrepreneurship and the role of the state in the economy. The Minister indicated that the government believed in privatisation but stressed that this was not simply 'because other countries are doing ft.' The main issue at this stage, he said, was to create a sufficiently large pool of well-trained people to take over activities currently run by the authorities. 'The government wishes it didn't need to get involved but we are a small developing nation, and to get things started, you need capital and know-how - which locals sometimes don't have access to.' In these circumstances, the state had to activate projects which could later be privatised once the necessary skills had been built up. Another 'major strategy' was to develop a much closer relationship between the Ministry and the private sector.

This led us into a discussion about Tonga's attitude to foreign investors who might also be in a position to supply capital and know-how. The authorities had recently threatened that a number of residence permits would not be renewed. Was this not a disincentive to potential overseas investors ? Dr Masasso was keen to offer clarification. 'The media makes it look as if Tonga doesn't like investors but they have misinterpeted the situation. He insisted; 'we want the foreign investment here and are encouraging it in those areas where locals cannot get involved.' Defending the actions of the immigration authorities, the Minister stressed that what they were doing was normal practice. 'Those who stay here illegally and do not extend their visa have to be deported.' The action, he argued, was not directed against foreign investors and indeed, the latter should be encouraged by the government's commitment to upholding the law.'

Tonga-EU cooperation

Developing the Vava'u islands

by Myfanwy van de Velde

EC-Tonga cooperation began in 1975 with the first Lomé Convention, soon after Tonga gained full independence in 1970. Grant aid totalling ECU 19.8m (Lomé I - Lomé IV) has been allocated to the country during its 20-year membership of the Convention.

Under Lomé I, funds were directed principally towards two main projects: the construction of the wharf at Neiafu, Vava'u, and funding for the Ministry of Works to procure road maintenance equipment and build schools, rural health centres and small wharves at Ha'apai and Vava'u. Remaining funds were used to finance studies involving dredging, trade promotion and designs for Vava'u and Faua fisheries harbours. The EIB also financed a line of credit of ECU 130 000, under Lomé I, to the Tonga Development Bank.

Lomé II funds focused on the fisheries sector, and on initiating works relating to the upgrading of the Vava'u airport. There were also projects in the fisheries sector, aimed at encouraging fishermen to undertake commercial fishing to meet local demand. To this end, the Faua Fisheries Harbour for small boats was built, and marketing and cold storage facilities were provided.

By the time Lomé III funds came on stream, Tonga had adopted a regional development approach with regard to its various island groups. The aim was to have a coherent development programme taking account of the specific constraints and potential of each. The Vava'u group of islands became identified as the focal area for the use of EC assistance, and Lomé III resources (ECU 6.5m in grants and ECU 0.5m in the form of risk capital to be managed by the EIB) as well as Lomé IV funds (ECU 6m and ECU 1 m respectively) have duly focused on its development.

Located in the north of the Kingdom, Vava'u is the second group of islands both in terms of population (16 000) and land area. With an abundance of natural resources, the group is thought to have greater potential for agriculture and tourism than other parts of the Kingdom. However, this potential was largely untapped at the time Lomé III was initiated. This was due to a variety of constraining factors including relatively low productivity, undeveloped marketing infrastructures, substantial import levels and poor distribution of utilities and other public services. One particular constraint preventing the development of tourism was limited access caused by a lack of transport infrastructures.

Two main projects aimed at addressing these problems have been implemented. The first, costing ECU 1.24m, involved completing the upgrading of the local airport at Lupepau'u (begun under Lomé II). In addition to runway improvements, a new terminal building was provided, complete with safety and navigational equipment. Passengers began using the new facilities in early 1995. The second project, entitled the 'Vava'u Development Programme', was allocated the sum of ECU 5m. This money is being used to pay for a series of activities including road upgrading, the provision of photovoltaic equipment for household energy needs and the supply of equipment for vocational training colleges. New buildings being funded include health clinics, a market and an agricultural quarantine building. The funds also cover the cost of establishing the Vava'u Development Unit as the monitoring and implementing agency for the programme.

The Programme continues under Lomé IV, with about 85% of programmable resources for Tonga (approximately ECU 5m) set aside for activities in the focal area. Funds will be directed towards developing the Neiafu urban area, in recognition of the need to upgrade access and services in the commercial centre of Vava'u. The projects envisaged include upgrading the town centre and urban roads, port improvements, and measures to increase the capacity and improve the distribution of piped and rain water to households. In addition, a multi-annual micro-projects programme will lead to the construction of jetties on the inhabited outer islands of Vava'u, thereby improving access to Neiafu which is the main centre of the archipelago.

In addition to the above grant aid, Tonga has received funds in the form of Stabex transfers for losses in export earnings in respect of coconut products, bananas and vanilla. It also received emergency aid in 1977, following an earthquake, and in 1982 following Hurricane Isaac.

EIB interventions have contributed to the share capital of the Tonga Development Bank and have increased the Bank's lending capacity to small and medium-sized enterprises.

Switching on the Iights

Uelingatoni Tevita Vaea (known as 'T' to his friends), proved to be a mine of information for The Courier, when we visited the Vava'u island group in northern Tonga recently. 'T' is a Tongan engineer who returned to his native land from Australia to work as assistant project manager in the Vava'u Development Unit. His help was particularly useful during the highlight of our visit - a traditional celebratory feast laid on by the villagers of Nuapapu. This is one of Vava'u's inhabited outer islands and the celebration was staged to mark the installation of solar powered lighting, courtesy of Lomé Convention funds.

Nuapapu is one of a number of outlying villages to receive solar installations under the Vava'u Development Programme. In all, some 350 homes have been wired up. Units attached to individual buildings collect the power and convert it into electricity which is stored in a battery. When night falls, the lights can then be switched on. Although the bulk of the installation costs are covered by the project, each participating household is required to pay a lump sum to have a unit fitted. They are also contracted to pay a modest amount each month towards maintenance of the system.

It may all seem rather prosaic to those of us accustomed to electrical power at the flick of a switch, but for the people of the villages in the Vava'u group, the project is little short of revolutionary. For centuries, their daily rhythm has been governed largely by the rising and setting of the sun. The only 'artificial' light available after darkness came from fuel-burning (and more recently, battery) torches or lamps - enough perhaps to reveal a path or highlight the position of an object, but certainly not to read or do intricate work with one's hands.

The formal 'switching on' ceremony was performed by the Dutch Ambassador, Mr van Thessen and Jonathan Rodwell, who is the European Commission's resident advisor in Tonga.

This was preceded by a courtesy visit to the village chief and the above-mentioned feast, which gave the European visitors an authentic and memorable taste of traditional Tongan hospitality.

The food was brought from all quarters of the village on long rectangular trays covered with leaves. Each was laden with food.

The fare was predominantly local: the famous roast pigs featured prominently along with fish, chicken, bananas, coconuts and a variety of root and tuber vegetables.

There were also some 'imported' items: the corned beef which is so popular here, some packets of crisps to add colour to the guest 'table' and boiled sweets woven into garlands.

The trays were laid end to end, stretching perhaps 20 metres and woven mats were placed all around. Having received our garlands of flowers, we were invited to sit down.

The feast was interspersed by various speeches and 'T' helped out with a translation and explanation of the proceedings. We began with a prayer in Tongan, delivered by the local minister. This was followed by a speech of welcome and thanks by the matapule (spokesman) of the village chief.

High ranking people in Tonga always have a matapule to speak on their behalf on such occasions. Ambassador van Thessen and Mr Rodwell then replied on behalf of the guests, (in English, with consecutive translation provided).

They expressed thanks to the people of Nuapapu for their hospitality and wished them success with their new electric lighting. There was then a short discourse by the District Officer followed by a closing prayer.

References to all this speechmaking could leave a false impression that this was a formal and stilted affair.

In fact the reverse was very much the case: the mood was relaxed throughout and there is no doubt that the villagers know how to enjoy themselves. Music was supplied by a group of men playing a variety of instruments and the women joined in the festivities with what appeared to be spontaneous bursts of dancing.

There were also special solo dances performed by two young ladies whose bodies had been smeared with coconut oil.

As tradition dictates, once their performances (involving highly expressive hand and finger movements) were complete, the audience expressed their appreciation by slapping banknotes on the oily exposed surfaces of the dancers' bodies.

The light was fading as the feast ended and we moved to the brief 'lighting up' ceremony, carried out to the accompaniment of applause.

The guests (including the staff of the Vava'u Development Unit who have guided the project through its various stages) then took their leave of this hospitable community and set off by boat on the return journey to Neiafu. As the vessel drew away from the shore, we were able to look up and see, for the first time, the twinkling lights of Nuapapu.