Business and Development

Fiji Spreading The Welcome Mat

To Overseas Industry

From a PIM staff correspondent in Suva

“Welcome” signs for industrialists in Australia, New Zealand and other developed countries are going up all over Fiji, with the government lead ing the campaign to provide jobs for its workforce, swollen each year by between 6,000 and 7,000 school leavers.

A few years ago there was no industrial land to be had, especially around Suva where companies were competing for a few small plots in Walu Bay and the suburb of Lami.

Now, the government, with private developers jogging alongside, is spend ing thousands of dollars acquiring and developing land for local and over seas firms and giving tax holidays and customs duty concessions to at tract the foreign investors.

Not only that, but red tape is being cut to speed up the processing of ap plications for land and licences to build factories.

Since the drive began in earnest in 1970 about 200 acres have been carved out of Crown and Native land reserves and by the end of this year nearly three quarters of a million dollars will have been spent by the government on developing the land for industry. But Crown land is in short supply and the Native Land Trust Board, guardian of the Fijian owned land, much of which is in “reserve” and doing nothing, is being persuaded to release land at Sigatoka, Tavua and Rakiraki.

Biggest areas of development are, naturally, near the capital and main port—43 acres at Nabua and 41 acres at Kalabu—but there is also important site development at Vatukoula, the gold town, Ba and Labasa. The Lautoka Town Council has also weighed in with a land-reclamation scheme of its own which will be used for factory sites. The government is anxious, however, to avoid large in dustrial concentrations in a few places to the detriment of many other smaller centres of population. Near the ports will go the manufacturers of goods for exports. The rest will

be spread over as many areas as pos sible on the two main islands of Viti Levu and Vanua Levu.

The industrialist, looking from Australia or New Zealand, Japan or anywhere else for an opening for in dustrial investment can expect to get from the Fiji Government a piece of land already serviced for a factory, with electricity and water laid on, tax holidays, in some cases for as long as eight years, a lower import duty for his machinery—lo per cent from non- Commonwealth countries and half that from Commonwealth areas—for raw materials or semi-processed items and for accessories such as packaging materials.

If he opts for a site at Vatukoula, he’ll get the maximum concessions.

These are; • A tax holiday for eight years, during which he won’t pay any tax on profits; other areas will be up to five years; • No import duty at all on manu facturing components, machinery and raw materials.

The government, with admirable

foresight and, maybe a little trepida tion, has classified Vatukoula as a “depressed area” although gold is still coming out of the ground. But for how long?

Bolstered up by government sub sidies over the last few years, the gold mine provides jobs and a living for a township of 5,000 people, the largest concentration of workers outside the capital. But, its future is very much in doubt. Labour troubles—there was a brief strike in October and a longer one a few weeks before that—could force a closure any time.

So far there have only been hints that Emperor Mines Ltd is losing patience and money. Any more serious trouble and the doors might be shut.

In any case, if more reserves of gold bearing ore are not found soon, there’ll be no mine.

This, perhaps more than anything else, has been the driving force be hind the government’s industrialisa tion policy, though maybe the thought that Fiji looks like being the manu facturer for the Islands has had some thing to do with it. At any rate, the

Pacific Singapore

accent is on Vatukoula. With the mining company’s agreement, the government has earmarked 120 acres in the area for factories, and 43 acres are now being developed.

Vatukoula is an each-way bet for the government. If the mine continues, then other workers can be brought in to man the new factories. There’s plenty of room in which to spread the town. If the mine closes, then in coming industrialists will find a ready made work force, disciplined in work

ing conditions.

“The whole idea of all these favour able concessions is to divert industry to Vatukoula in preference to any where else in the dominion,” Mr Shardha Nand, Secretary to Fiji’s Ministry of Commerce, Industry and Co-operatives, told PIM. “But we want new industries wherever we can get them and we think we have an attractive proposition for investors in Australia, New Zealand and else where.

“We have a large labour force, and though much of it is unskilled it can be trained. Fiji is the Singapore of the Pacific and has much to offer.

We would welcome especially off shore industries which can supply

ready-made or partly-completed goods for use in more sophisticated in dustries in the developed countries such as car parts, including cable, and also components for heavy industry.

“Many Australian and New Zealand investors might find they can invest here and generate industrial growth for onward expansion of the market beyond Fiji into the South Pacific region including Latin America. What is more, there is no hit and miss about our planning. We see things clearly and should be able to supply answers to any queries. We have the machinery for processing applications quickly.”

This machinery, a recent innova tion, is the Industrial Review Com mittee on which sit Mr Shardha Nand as chairman, the Secretary for Finance, Commissioner of Inland Revenue, Director of Economic Planning, Comptroller of Customs and Com merce and Industry’s economist.

They’re able to give an application the once-over in a week and, usu ally, never take more than a month to do the job. Any delays are usually outside their control, due maybe to protracted negotiations over mach inery or partnerships or through in adequate information being given.

Already several new industries are being set up including a flour mill, now being built at Walu Bay, a steel

rolling mill in the same area, a foam rubber factory which is coming from the United Kingdom and will be built at the Suva suburb of Vatuwaqa, a garment manufacturing firm from Taiwan, a laminated board factory

and a ginger processing plant. There

are others in the pipeline but pro posals are confidential until the in vestors want to talk publicly.

The last word on any application to set up an industry comes from the Minister of Finance, Mr C. A. Stin son, and the Minister for Commerce, Industry and Co-operatives, Mr M. T.

Khan.

Guarantee of local participation is almost an “open sesame” to any over seas applicant but some, especially those requiring high capital invest ment, “foreign” skill, technical know how, marketing expertise and inter national marketing connections, have an easy passage without having to promise to allow a local finger in the pie. In others there must be guarantees of local participation. In the flour mill and steel rolling mill ventures the requirement is up to 49 per cent of the shares for locals.

There are restrictions however.

There’s little chance of an outsider getting a permit to set up a restaurant, or in tailoring, laundry, curry powder making, blacksmith shops or any

business already “native” to the place.

Some butchers’ shops got in from overseas recently but this Minister Mr Khan put down to a “lack of co ordination” and government mach inery not being “geared to deal with this sort of thing.” Those will be the last to break into the exclusive local circle.

Private enterprise is also taking a share of the operation, for profit of course. One such estate is being deve loped on 50 acres of reclaimed man grove swamp at the side of the Queens Road three miles from Suva.

Named the Wailada Industrial Estate by the developers, Industrial Developers (South Pacific) Ltd, it will be completed by next August. Already 60 of the 100 lots have been sold, many to overseas companies in Aust ralia, New Zealand and Hong Kong.

Some of the sites, however, will be for warehouses rather than factories.

The same company has similar schemes, but smaller, at Vatuwaqa, Nausori and Kinoya on the Kings Road, and has also embarked on the construction of a four-acre shopping complex on the corner of Mead and Princes roads Suva. In the complex will be a department store, super market, speciality shops, a 12-storey, 60-bed hotel with a restaurant on top and a 14-floor apartments block—all for $1,800,000. Building will begin early next year with completion in two years.

The high cost of

spreading the word

When the Islands get together in the South Pacific Forum and the South Pacific Conference around 1974 a lot of the talk will be about tele communications and the Islanders’ ambitions for improved togetherness.

And they’ll talk in millions of dollars.

The desire for closer links in the way of telecommunications was first pinpointed by Nauru’s President Hammer Deßoburt at the Forum’s first meeting, in Wellington in August, 1971.

Australia and New Zealand offered to do a preliminary study and this year they came up with the result.

A communications network linking all Island territories is feasible —if you don’t consider the cost.

President Deßoburt thought a sub marine cable network stretching 8,000 miles at a capital cost of about SUSSO million might provide a satisfactory link for regional com munications. The experts in Australia and New Zealand doing the preli minary study came up with a much bigger figure—sAB3.2 million for the submerged plant of a submarine cable

system with major and minor ter minals.

The system, the experts considered, would cost $A 10,944,000 a year to run it. And their estimates do not include the cost of customs duty and sales tax on equipment, though that could be waived, the cost of land for stations and staff houses, the cost of housing and also landline transmis sion equipment.

The experts studied several systems as well as the submarine cable. They discarded two the tropospheric scatter system, which is transmission at ultra-high frequencies with reflec tion from the troposphere, and the microwave system, with transmission at ultra-high frequencies from tower to tower mounted in the ground. They considered they were unsuitable.

The other systems which are avail able, are the submarine cable, satellite and the high frequency radio system.

The capital cost of a satellite earth station was estimated at $A4,220,000 and the annual running costs $1,017,000, plus an annual space segment rental for a half circuit of $A15,000. The experts estimated that 12 such stations would be needed, making a total capital cost of $A50,640,000 and annual running costs $A 12,204,000 plus the space segment rentals.

Capital cost of HF radio with

sufficient stations to cover the region was estimated at $A9,968,000 with annual bill at $A2,480,000.

The United Nations Development Programme (UNDP) has taken a hand in the project study and has appointed experts to make a complete study. They are expected to come up with the answers by 1974.

Fiji revaluation

hits copra growers

With the pound sterling afloat, Fiji revalued its dollar in October by 5i per cent, and upset the des pondent and struggling copra growers who stand to lose $3.90 a ton on top of the $BO a ton they are down on the 1970 price. The planters have been sore for a long time about what they feel is governmental neglect of them.

They were given a freight subsidy of $5 to $lO a ton, but this latest move, they say, robs them of the small advantage they got from the subsidy.

Minister of Finance Charles Stinson explained that as most copra exports went to the UK payments for the coconut oil and meal would now be less. This would also apply to sugar but there are other markets in which the sugar industry will benefit from revaluation.

Fiji’s food bill, which is paid in Australia and New Zealand, was growing bigger. Since June it had increased by 9.7 per cent. To offset this the government decided on revaluation.

Why, ask some, must Fiji be still tied to sterling when the dominion is now independent? According to Mr Stinson, Fiji will be affected by an undulating pound until she gets her own central monetary authority. That would provide the machinery for real independence in the financial field.

But the experts fear that, when Fiji gets this authority, it will be out of the frying pan into the fire.

Little Fiji with no Fort Knox — although it’s got a gold mine—and precious little to support its dollar, will be at the mercy of the world’s financial bandits and the chill winds of economic recession. • UTA French Airlines will take delivery of five new DC 10s, the Douglas Corporation’s version of the jumbo, beginning in December, The airline has options on three more.

The first will be seen in Fiji on June 1 next year. • Air Micronesia, in association with Continental Airlines, is putting its Second Boeing 727 into service on December 15, greatly increasing TT services.