Business and Development

French Pacific unhappy at franc drop— but short term visitors will benefit

Caledonians are expressing grave concern at the Pans de cision of August 8 to devalue the franc by 12i per cent., a move which has also hit Tahiti. The New Hebrides franc is not expected to be affected.

Trade union leaders in Noumea have held talks with the Administra tion in a bid to avoid a rise in living costs, since nearly half the territory’s imports come from foreign countries outside the franc zone, mainly Aus tralia.

Since the franc is now worth 12i per cent, less than before, foreign goods, airfreight and fares have automatically risen by at least this amount.

The overseas spending allowance has also been hit. Caledonian tourists, who already could take no more than SA27O out of the territory in one year, can now take only $240.

Caledonian resentment at the French devaluation is intensified by the fact that this French territory is in full economic expansion, especi ally with a second nickel company having been formed in February.

Moreover the nickel territory has a significant surplus of foreign currency earnings over imports.

New Hebrides denial

In late August the Joint Adminis tration of the New Hebrides put out an official statement “denying rumours that have been circulating throughout the territory since the Bth, according to which the New Hebrides franc was to have been de valued at the same time as the Noumea franc”.

The statement pointed out that one New Hebrides franc was still worth one cent Australian. It said 100 New Hebrides francs were now worth 112.5 Noumea francs.

There was not quite the same con cern expressed in Tahiti as in New Caledonia.

Initial reaction in French Polynesia was that devaluation will have two principal effects—(a) there will be

a growth in tourism because visitors will get more for their money, (b) at the same time costs of imports will rise by 12.5 per cent, because almost no consumer products are manufac tured in Tahiti.

Thus what French Polynesia will gain on the roundabouts it might lose on the swing.

Visitors to Tahiti were benefiting

immediately after devaluation. The US dollar was worth 12.5 per cent, more, but there had been no in crease in hotel charges, and it is likely visitors will continue to enjoy these advantages for a month or two yet —and may even continue to enjoy advantages, although on a reduced scale.

Australia and New Zealand, both of which supply goods to the French Pacific territories, expect that de valuation will mean a tightening up of import licensing in the French territories. This is not likely to affect exports of foodstuffs from Aus tralia and New Zealand, because the French need these. But the licensing is expected to restrict other products from Australia and New Zealand, making it harder for these countries to sell. The French will try to bring more of their imports from the Com mon Market countries.

Devaluation was announced only a few weeks before the launching of “Australia Week” in New Caledonia in the beginning of September. It was promoted by three leading retail stores in Noumea, to push Australian goods, and supported by the Aus tralian Trade Commissioners for the Pacific Islands, Mr. W. R. Carney and Mrs. Beryl Wilson, both of whom were in Noumea at the end of August —no doubt also looking at any other likely effect in Australia of the French devaluation.

All sorts want to

invest in Tonga

The Kingdom of Tonga so far is happy with the reactions it has got from its decision in April (P/M.

May, p. 19) to open its doors to overseas investment. Inquiries are still rolling in.

The April announcement, made by Tonga’s Finance Minister, Mahe U.

Tupouniua, invited overseas capital to establish and operate a wide range of businesses and industries, as varied

as the exploitation of seaweed and the assembly of television sets.

In Tonga all land is State-owned and commercial development has traditionally been the prerogative of the Crown.

Inquiries have come from the Pacific, America and Europe.

Enterprises mentioned in initial in quiries in the Pacific area are: Australia—The construction and running of hotels and motels in the Vavau Group and the establishment of a pharmacy.

New Zealand—Farming mussels, a cannery, a soup factory and a boot and shoe repair service, also the establishment of a handcraft agency, a cargo airline service and a com mercial radio station.

Fiji—A rubber beach sandal factory, paper bag manufacture, a slipway and enterprise connected with the sea and its resources.

There is even an inquiry from Norfolk Island about running a vehicle hire service, motels and aquatic sports. One firm elsewhere is interested in the manufacture of beach sandals, wearing apparel, canned fruit juice and the assembly of transistor radios, while a West German agency mentions building a bungalow type hotel.

At least two American firms of consultants, who service large inter national corporations, have written for additional data on the kingdom’s new investment opportunities. In addition, an Australian bank, with branches in Australia, New Zealand and the Pacific, is keen to know more about the new move for local develo ment.

Questioned about the vital matters of land tenure and incentives, the Minister said in August that while the constitution absolutely forbids the freehold sale of land in Tonga, it is possible to negotiate satisfactory leasehold properties at reasonable rates, either through private allot ment holders or the crown. Tonga has a stable government and there are a number of expatriate property holders in the kingdom who have held and worked land for close on a century.

He said that because the govern ment was keen to see private enter prise participating fully in the economic development of the country and provide employment opportuni ties it was doing its utmost to arrange conditions of lease, taxation, import export licences and duty that would provide the necessary incentives.

Negotiations have already started over some firm proposals received from abroad.

p-„| • w i .| J r CON in WOilO

demand

There s a current world-wide demand for cultured and na jural pearlshell. Buyers ¥, * buy e ”°JJgh .fr° m f Loaded with growing orders from European, Japanese and American houses, buyers are snapping up every ton they can find from the three major Islands producers, the Torres Straits, Cook Islands and French Polynesia.

In August, prices for most of the eight quoted grades of shell at

Thursday Island firmed. Operators said, however, the shells, in quantity, weren’t available.

In French Polynesia and the Cooks, living continued in outer atolls for natura j pea rls, as did experiments on cultured pearls by government and private enterprise in French Poly .

In the Solomon Islands a licence to start cultured pearl shelling was submitted by Solomon Islands Sea Pearl Company. This group, formed by Mr. Robert Balziel in partnership with one of the big Thursday Island operators, has been collecting shell

in the Western Solomons for the past 18 months.

Plans are to begin operations in the Manning Strait, between Choiseul and Isabel Islands. Ten other areas have been selected, should first ex periments prove successful. ll will be a while, however, before Solomons pearlshell finds buyers—it’s two years before a cultured pearl is produced.

Fiji's balance of

trade improves

Figures for the first half of 1969 show a substantial improvement in Fiji’s balance of trade. The Bureau

of Statistics reports that after five successive months of deficits, the month of June showed a surplus of $2,326 million.

It cut the overall deficit for the first six months of this year to $15,582 million, compared with $20,2 million for the same period last year. Exports for the period totalled $21,227 million—a rise of 69 per cent over the first half of 1968.

Imports also rose—but not so sharply. They totalled $36,809 mil lion, a rise of 12.1 per cent. The value of exports in the month of June rose to the record monthly total of $8,630 million, mainly be

cause of increased sugar shipments.

Imports during June amounted to $6,304 million.

Machinery and transport equipment was the largest item in the import bill for the first half of 1969, fol lowed by manufactured goods, food and petroleum products. Exports were dominated by sugar and coconut products, followed by miscellaneous transactions and commodities and coconut oil and fats. Petroleum products for re-export were valued at $2,154,000.

Drought hits Fiji

sugar cane industry

At a time when Fiji’s sugar cane industry is again in the spotlight, vast tracts of cane in the Nadi- Sigatoka area have been withered and stunted by continuing drought.

Farmers such as Raviravi grower, Sundresan, have felt their hopes for a good season wither with the cane.

Sundresan, with 13 acres of flat land between Lautoka and Ba, last year harvested 283 tons of cane from five acres. “This year,” he said, I’ll be lucky to get more than 50 tons from this same five acres.”

In their annual report to share holders in August, the directors of South Pacific Sugar Mills Ltd. stated that the drought would be “very seriously felt” this year, even if growing conditions improve.

“The 1969 crop at first looked most promising, but these early hopes have been dimmed by a return to dry conditions which have retarded growth,” the report said.

“Less than half the normal rain fell in the first quarter of this year and these dry conditions have continued.’’

However, the report added an optimistic note: “Sugar cane has remarkable recuperative powers, as was shown last year, and the crop prospect, at present unfavourable, could improve as the season pro gresses.”

Fiji had a record crop last year, with 2,826,136 tons of cane being harvested from 114,314 acres. The report stated that the yield of 24.7 tons per acre indicated a return to more normal conditions compared with the 1967 yield of 19.4 tons per acre—which was the lowest recorded in the last 10 years.

It took 7.18 tons of cane to make a ton of raw sugar, compared with 7.22 tons in 1966 and 7.43 tons in 1967. “Burnt cane in 1968 represented 13 per cent, of the crop and was higher than in 1967, when onlv five per cent, of cane was burnt before harvesting,” the report said.

It attributed some of the increase in burning to anxiety on the nart of growers who feared that if the mills

were closed at the usual time, their cane might not be harvested.

Pointing out that the manufacture of high-quality sugar depends on the supply of unburnt cane, the report warned: “Fiji’s sugar has a good reputation on world markets and the loss of this reputation could make more difficult the task of extending or maintaining existing sugar markets.”

In the year to March 31, the SPSM made a profit of $2,231,050 — nearly $1 million more than for the previous year.

The annual report said that the directors have recommended that the 7i per cent, annual dividend of recent years should be retained, which would mean $1,387,500 would be paid to shareholders.

'Coke' in Lae

and Rabaul

Two new soft drink plants costing nearly $1 million at Lae and Rabaul, New Guinea, will begin operating about October for the Coca-Cola Ex port Corporation. Lae’s New Guinea Industries, with the New Guinea mainland (except Papua) franchise for Coke, will spend $335,000 on its plant in Milfordhaven Road, and A.

Akun and Company Pty. Ltd., with the NG Islands franchise for Coke, will spend a similar amount.

Bottles will come from Australia but when Australian Consolidated In dustries glass and bottle manufactur ing plant in the territory begins at Lae in February next year, all bottles are expected to be bought in NG.

Cooks win first

round on fruit

The Cook Islanders’ “get tough” policy of banning the export of citrus fruit to New Zealand has paid dividends. The New Zealand Gov ernment is investigating a way of “obtaining more favourable con ditions for the industry”.

The storm broke in June when Fruit Distributors Ltd. refused to carry the increased cost of four cents a case of oranges and demanded that the islands’ mandarin produc tion be reduced.

Cook Island Premier, Mr. A. R.

Henry and his cabinet, decided to divert all export citrus fruit to the fruit processing factory in Rarotonga.

No Cook Islands citrus fruit would be available in New Zealand.

The Cook Islanders reversed the decision in July ( PIM , Aug. p. 124) following promot reaction from the NZ Government. is the back ground to the squabble:

On June 24 the premier, in a radio broadcast, pointed out that the citrus industry was the most important one in the Cook Islands and said that recent events had signalled its ultimate end.

The government action in banning exports was taken to obtain more favourable conditions for the industry and to protest against what he called the “uncompromising attitude” of Fruit Distributors Ltd. He wanted a full investigation into Fruit Dis tributors’ marketing of Cooks’ fruit in NZ.

“The argument over fruit prices and conditions of fruit acceptance for the NZ market has been going on for the past 60 years,” Mr. Henry

said. “The ultimate result of this argument has always been that the grower carries the burden, and the Cook Islands Government is left to make the excuses.

“This year the government con siders that the argument and the result are so drastic that only drastic action can be the answer”.

When the NZ Government gave Fruit Distributors the sole rights to import and distribute citrus, bananas and pineapples, one of the conditions was that the firm would encourage the development of fruit growing in Islands territories dependent on New Zealand.

In March, 1963, the firm increased prices for Cook Islands’ mandarins

and tangerines beyond the demand of the growers in order to encourage production of the fruit, and in October, 1954, the company offered prize money of $2OO each year for annual competitions for the growing and packing of mandarins in Raro tonga.

“The devaluation of the NZ cur rency resulted in prices and costs increasing to such an extent that the future of this fruit industry, built up in years past, will be doomed un less a better understanding between the marketing organisation and the producers in reached,” Mr. Henry claimed.

During his visit to New Zealand last April-May the Premier said he interviewed Fruit Distributors to explain his concern over the future of the Cook Islands citrus industry.

He requested the firm to carry the extra cost of four cents a case for oranges, and this request was “flatly refused”. The firm’s represen tatives also said it would be neces sary to reduce mandarin production in the Cook Islands as the demand for them in New Zealand was very limited.

When the Premier returned to Rarotonga on May 19 he found that mandarin growers had lost over

34,000 cases over three shipments— the April and May Moana Roa calls, and that of the Pagensand, because Fruit Distributors Ltd. did not want them.

It was estimated that they would lose a further 16,000 to 18,000 cases of mandarins on the Moana Roa’s June call. This was mainly because most of the fruit was over-ripe. A total loss of 52,000 cases at $1.35 per case worked out at about $80,400.

When this situation became clear, Fruit Distributors Ltd. was asked through the NZ Government to reconsider their decision on prices for the 1969 season.

“They would not budge,” the Premier said, “and it was then that the cabinet, without hesitation, un animously resolved that all citrus fruit this (June) Moana Roa be diverted to the juice factory in protest against Fruit Distributors

Ltd.’s uncompromising attitude. . . .

I feel that if we do not offer resistance to the system to which we are subjected . . . which I liken unto a stranglehold, then we must surely expect the decline and eventual deatn of the most important industry in the Cook Islands.”

Fight against beetle

to cost more

The war against the rhinoceros beetle in Fiji will need more finance during 1970. Superintendent of the Coconut Pests and Diseases Board, Mr. Don Burness, said the board would seek an increase in next year’s budget in order to continue the fight.

He said the board operated on about $120,000 and copra producers, who financed the board with the help of government, could not afford much more money. Nevertheless more funds would have to be found to help prevent the beetle from spreading to Fiji’s major copra pro ducing areas in Caukaudrove, Taveuni and the Lau Group.

Most people are co-operating with the board in its efforts to curb the beetle’s progress, but a shortage of inspectors is a problem, particularly in the vast cane areas.

Sugar cane mill mud, used for fertiliser, provides a perfect breeding ground for the beetle if spread too thickly. The board finds it difficult to police this because of lack of in spectors.

But in August the master of one of Fiji’s inter-island ships was fined $4O for sailing from a beetle-infected area to an uninfected area without a clearance certificate.