There is a considerable diversity in the economies and economic characteristics of the countries of the South Pacific. Australia and New Zealand operate as "developed" countries, both with considerable wealth in natural resources, skilled and educated populations and substantive financial resources. Australia's economy has built primarily on its vast natural resource wealth, most particularly its agricultural and mineral resources. The greater size and diversity of the Australian economy make it generally more robust than that of New Zealand and hence it was better able to absorb the shocks of the 1970's - notably oil shocks and Britain's entry to the European Common Market. Consequently, in the 1980's Australia's economy was in considerably better shape than that of New Zealand. Since the Australian economy was less in need of urgent reform the extent of reforms in New Zealand over the past decade have tended to overshadow changes in Australia. However, over the past 5 years Australia has moved more cautiously, and more at a State level, but along the same market-led path. More moderate levels of "user-pays", privatisation and subsidy elimination have been evident. In 1990 Australia and New Zealand signed a bilateral free trade agreement. The most recent Australian elections elected a Government campaigning on a market-led economic platform. This should see moves to place Australian industry, including forestry, on a purely market-oriented basis. An example is the July 1996 privatisation sale of the South Australian State Government's timber processing business. While this is unlikely to foreshadow complete privatisation of State forest resources in the foreseeable future, it is an example of Australian government moving toward making domestic industry more globally competitive.
The Melanesian group of islands, Papua New Guinea, Solomon Islands, Fiji, Vanuatu and New Caledonia, are all relatively well endowed with significant land area, fertile soils and natural resources. Their export bases tend, however, to be narrow. Papua New Guinea's exports are centred on minerals, particularly copper and gold, while logs, coffee, palm oil and copra are also important. New Caledonia's economy is founded on its extensive nickel reserves. Fish, timber and copra are the staple exports of Fiji, Vanuatu and the Solomon Islands, with the Solomons also additionally exporting palm oil and cocoa, Fiji exporting sugar, garments and gold, and Vanuatu exporting beef. All of the countries of Melanesia and Polynesia receive development aid although Fiji, and to a lesser extent Papua New Guinea, are considerably less dependent on aid than most others. The various territories receive allocations from their parent Governments according to policy and requirements. Of these, New Caledonia and French Polynesia are particularly noteworthy as having a generally high standard of living compared with their island neighbours.
The islands of Polynesia and Micronesia are generally less well endowed with resources. Those which are of volcanic origin, for example Western Samoa and Tonga, have rich soils and agriculture or forestry provide development options. However, most of the smaller islands are coral-based and have very poor soils, small land areas and few land based natural resources. In the future the vast ocean areas falling into these countries' Exclusive Economic Zones may be found to contain resources to enable significant economic development. In many instances tourism is also a viable means of development. In the meantime, foreign aid and expatriate remittances form an integral part of the economies of these small nations. For example Siwatibau (Cole and Tambunlertchai; 1993) notes that, "the annual value of remittances to Tonga hovers at around three times the value of its exports, half the value of its imports and 30 percent of its GDP." For the smaller islands the dependency ratio is generally worse. Persistent trade deficits, welfare and investment expenditure in these countries can only be underwritten by foreign aid. For most of the small Pacific Island countries, geographic dispersion, lack of scale economies, immense distances and associated transport costs, lack of marketing expertise and vigorous competition present probably insurmountable difficulties to rapid economic or industrial development.
The Pacific Islands are not, however, desperately poor. Only a few islands are presently susceptible to population pressures. Most islands have a relatively strong subsistence economy and most people have access to land which often provides an alternative to waged work. In fact the existence of this alternative is a major reason why wage rates in the Pacific Islands are generally high relative to countries such as Indonesia and China. A further reason is the option, for many Islanders, of working abroad, particularly in Australia or New Zealand, and the need for domestic governments (particularly) and industry to be modestly competitive with this option to attract skilled employees.
The major impediment to development in the Islands is probably access to investment capital. With their narrow, and generally natural resource driven production, and the range of difficulties identified above there are few incentives for foreign investors to undertake major commitments in the region. Additionally, overseas aid may actually crowd some private investment out, particularly through its exchange rate and price ("Dutch disease") impacts .
Table 1 shows Australia, New Zealand, New Caledonia, French Polynesia and Nauru all with substantially higher GDP per capita levels than the other countries. New Zealand and Australia both have developed and diversified economies which are internally sustainable at this level, Nauru's future is dependent on the performance of its phosphate revenue investments. New Caledonia and French Polynesia are dependent on France to maintain these GDP levels. Secession for either, but particularly French Polynesia, would entail a substantive decline in living standards.
Western Samoa is the only Polynesian country with a timber export industry. However, forestry makes a substantive contribution to the exports of all the Melanesian countries and to New Zealand. The Solomon Islands is notably heavily dependent on forestry to earn overseas exchange. This is a concern given the current high extraction rates in the Solomon Island forests and questionmarks over long run sustainable harvest levels.
Table 1: Economic Indicators in the South Pacific (c.1993)
Country |
GDP/Estimated Income per Capita (US$) |
Value of all Exports (US$) |
Forestry Component of Exports (%) |
Australia |
14 464 |
43 104 000 000 |
2.0 |
New Zealand |
14 081 |
13 253 000 000 |
10.5 |
Papua New Guinea |
966 |
1 700 000 000 |
9.1 |
Solomon Islands |
750 |
140 000 000 |
56.0 |
Fiji |
2 140 |
424 000 000 |
6.9 |
Vanuatu |
1 230 |
19 000 000 |
12.5 |
New Caledonia |
13 400 |
447 000 000 |
0 |
French Polynesia |
17 200 |
252 000 000 |
0 |
Western Samoa |
980 |
7 000 000 |
5.0 |
Tonga |
1 610 |
18 500 000 |
0 |
Kiribati |
710 |
4 000 000 |
0 |
Tuvalu |
350 |
80 000 |
0 |
Cook Islands |
4 000 |
4 000 000 |
0 |
Nauru |
10 000 |
73 000 000 |
0 |
Nuie |
3 000 |
360 000 |
0 |
Tokelau |
760 |
36 000 |
0 |
Norfolk Isl. |
- |
- |
- |
Pitcairn Isl. |
- |
- |
- |
Wallis & Futuna Isl. |
- |
23 000 |
0 |
Source: Europa 1996
The future for most of the Pacific Islands countries is probably for modest, aid assisted growth. It is difficult to see any of them sustaining growth rates to match those of, for example, the Asian Tigers. Papua New Guinea might match such growth rates in the short run by rapid exploitation of its wealth of resources. The revenue from such exploitation would, however, need to be invested in competitive industrial and infrastructural development if the country were to sustain growth. This all seems an unlikely scenario. Nonetheless, Papua New Guinea and Fiji, with ODA comprising respectively 11 percent and 3 percent of GDP in 1990 appear to be the only two countries presently with capacity to comfortably exist without aid. Nauru, with its extensive phosphate trust funds naturally provides a special case, as do the various Territories in their relationships with their parent countries.
With a large number of countries and territories spread over an extensive area there is naturally considerable diversity in the range of political systems and situations that have evolved in the South Pacific. Nonetheless there is also a considerable degree of commonality as well. One factor shared by all the countries is, on a global scale, their relative youth. European settlement in the South Pacific did not really begin until the latter part of the 18th century and most countries have achieved, or had thrust upon them, political independence only in the past 25 years.
The majority of countries are members of the Commonwealth and have adopted political systems based around the Westminster system. Obvious exceptions to this are New Caledonia, Wallis and Futuna Islands, and French Polynesia which remain overseas territories of France. Tokelau, Samoa, Norfolk Island and Pitcairn Island are respectively overseas territories of New Zealand, United States, Australia and United Kingdom. Niue is a self-governing territory in free association with New Zealand. Fiji, formerly a Commonwealth member, declared itself a republic after the coup of 1987. Vanuatu is also a republic while Tonga, a member of the Commonwealth, is also a monarchy in its own right.
For most of these countries, lack of political stability is not generally perceived to be the greatest obstacle to development. Nonetheless, a number of the island countries have suffered civil disturbances in the recent past with secessionist violence in Papua New Guinea, Vanuatu, New Caledonia and French Polynesia and a coup in Fiji. Additionally, few of the countries in the region have been immune from political scandals involving misuse of funds.
Problems in Papua New Guinea and Fiji have probably assumed the highest profiles. Dolman, (General Manager of the PNG Forest Service) (1996) in reporting his experience of serving four Forestry Ministers in 10 months notes that "Papua New Guinea is a little on the wild side". Frequent no-confidence motions against successive Governments resulted in changes to the constitution granting an incoming Prime Minister a minimum of 18 months before such a motion may be presented. While the country as a whole is not overtly politically unstable, there are sufficient reports relating to violence, crime, corruption and civil unrest to generally dissuade many investors from considering Papua New Guinea an attractive investment destination. Civil war is effectively being waged on the island of Bougainville which is pressing claims to secede to the Solomon Islands.
Semi-political factors also contribute to criticism of Papua New Guinea's environmental record in forestry. Corruption and violence allegations against concession-holders are rife, particularly in the environmental media. Dolman (1996) notes a recent Cabinet approval of "Guidelines for Agro-development" which specifies "agricultural developments will comply with the existing laws (Forestry, Investment, Environment Acts) except where the provisions affect the pace of development".
Political instability in Fiji is probably more a matter of perception than reality. An election in 1987 resulted in the transferral of power from (in very simple terms) an ethnic Fijian Party to an Indian-Fijian Party. The ethnic Fijian military, responded by staging two coups and assuming power. Since the coups the new republic has consolidated and is relatively stable. However, Government policy dictates that political power remain in the hands of ethnic Fijians with other racial groups effectively disenfranchised. It seems plausible that cautious investors would note these problems and the problems of the past and may find them dissuasive. Naturally as time passes this perception will continue to weaken as new stability is proven. A similar degree of caution may apply to Vanuatu where secessionists briefly declared Espirito Santo a republic in 1980, and more recently New Caledonia where strong moves towards creating the Karnaky Republic in 1988 created civil unrest. The upshot was the suspension of direct rule by France and the establishment of three provincial councils. A territorial plebiscite on independence is expected to be held in 1998. In 1992, rioting in Noumea resulted in the burning of the principal commercial centre. Similarly, in French Polynesia, 1995 protests against French nuclear testing escalated to home-rule riots.
For most of the South Pacific countries (Papua New Guinea is probably an exception) it is difficult to argue these factors have seriously impeded development. However, it would certainly be fair to say they have not assisted in attracting investment.
Aside from stability, the dominant political issue of relevance to forestry across the region, for the future, will be balancing development objectives against environmental and conservation objectives. This will be particularly true for those countries with significant forestry resources and is probably as true for Australia and New Zealand as for the island countries. The South Pacific is surrounded by examples of countries which have exploited their natural resources to fund development. Nauru provides one interesting example. Malaysia, Philippines, Thailand and Indonesia also provide differing models of forest resource usage from which development lessons might be learned.
Hooper (Cole and Tambunlertchai; 1993) notes that, "Each Pacific society is comprised of three main parts, the Government, business and the professions, and the traditional part." Forestry interaction with society generally extends to each of these parts. However, from a social perspective the traditional aspect is most important.
At the centre of the "traditional" island sphere is land. While the importance of land tenure systems in landuse patterns and commercial forestry is discussed elsewhere these systems have equal importance in determining social structures in the South Pacific. It is notable that with the exception of Australia, New Zealand and several of the French territories none of the countries have been subject to large scale colonisation and consequently systems of land tenure have remained less disturbed than in many other regions. Consequently, there is often only a small percentage of landless inhabitants who are forced to sell their labour as a means of subsistence. The remainder have access to land sufficient to maintain at least a subsistence lifestyle including forest or scrublands which provide the main source of fuel, and fibre and wooden materials used for construction (for example, houses and canoes), general household implements, community and religious purposes.
Employment in forest-based industries is only substantial in the countries with significant forest resources. However, where subsistence and shifting cultivation are the norm increasing populations are having a significant cumulative effect on the forests. Population pressure and unsound landuse practices are significant contributors to deforestation and land degradation in the region. Table 2 shows population, densities and growth rates for the countries of the South Pacific.
Table 2: Population Indicators (1990)
Country |
Population |
Growth Rate (%) |
Population Density 1990 |
Population 2010 |
Population Density 2010 |
Australia |
17 090 000 |
1.5 |
2.3 |
21 366 000 |
2.8 |
New Zealand |
3 350 000 |
0.8 |
12.5 |
3 775 000 |
14.1 |
Papua New Guinea |
4 011 000 |
2.7 |
8.9 |
5 981 000 |
13.2 |
Solomon Isl. |
320 000 |
3.5 |
11.4 |
536 000 |
19.1 |
Fiji |
726 000 |
1.4 |
39.7 |
894 000 |
48.9 |
Vanuatu |
150 000 |
2.6 |
12.3 |
220 000 |
18.0 |
New Caledonia |
168 000 |
1.8 |
9.2 |
219 000 |
12.0 |
French Polynesia |
198 000 |
2.7 |
54.1 |
295 000 |
80.6 |
Western Samoa |
158 000 |
0.2 |
55.8 |
162 000 |
57.2 |
Tonga |
96 000 |
0.4 |
133.3 |
102 000 |
141 |
Kiribati |
71 000 |
2.0 |
97.3 |
96 000 |
131 |
Tuvalu |
10 200 |
4.1 |
392 |
19 000 |
730 |
Cook Islands |
16 900 |
-0.2 |
71 |
16 400 |
69.2 |
Nauru |
9 300 |
2.3 |
443 |
13 080 |
622 |
Nuie |
2 500 |
-4.0 |
7.7 |
1 400 |
5.4 |
Tokelau |
1 800 |
1.5 |
180 |
2 250 |
225 |
Source: FRA 1990; Cole & Tambunlertchai
It is evident from Table 2 that Polynesia, at least, is suffering significant population pressures. Only Niue has a population density below 50 people per square kilometre. Significantly, Niue also retains easily the highest rate of afforestation in Polynesia. In the island countries densities on specific islands may be markedly higher than noted here. For example, on South Tarawa in Kiribati the density is 1350 people per square kilometre.
Annual population growth rates are also high for many countries which may cause further difficulties in the future. Tuvalu and Nauru have very high growth rates as well as the concurrently high population densities. A simple extrapolation using the average growth rates (1980-1990) listed in the table shows marked increases in the population densities of several countries which appear likely to cause significant additional pressures on the forests. For countries such as Tuvalu and Nauru it seems evident the current rates of population increase cannot be sustained, even in the short run, without creating major resource pressures. Among the countries with larger populations, Solomon Islands and Papua New Guinea have rapidly expanding populations which will increase demand both for forest products, and particularly for revenues from forest products to fund social programmes. This is likely to maintain pressure on these countries to continue exporting logs.
Australia and New Zealand, as developed countries, are less susceptible to economic and subsistence imperatives impacting on their forests. The social values of forests are generally more easily separated from the economic values. Forests contribute as a focus for tourism and recreation. Activities such as trekking, climbing, camping, hunting, photography and sight-seeing are all dependent or extensively enhanced by forests. Forests are also important in a wide range of other recreational activities such as diving, fishing, horse-riding, boating, bird-watching, orienteering, mountain-biking and motorcycling.