Micronesia's A

Trader's Gamble

By Ken Mcgregor

“It is important for merchants U believe they can ship to the Trus Territory without undue risks. If not responsible merchants will find trad ing to Micronesia too risky and onl; unscrupulous merchants will b attracted to the area. They will hui our local businessmen and the cor sumers.”

These are the recent words of Par Corbitt, formerly counsel to the Tru District Legislature and now manage of the Truk Transportation Company Mr Corbitt’s comments are but th top of an iceberg of growing criticisr from most traders to Micronesia c the way their goods are handled and paid for —when they arrive in th mid-Pacific. Most of the imports t the territory are flowing from thre directions —Japan, the US and Aui tralia.

The Japanese have adopted shrewd policy of handling problen associated with non-payment c accounts. They demand that the representatives join Micronesian con panics with bad debts ratios, rath( than insist on minor shareholdings i the companies in return for writir off debts. The Japanese advisers c accountants learn where impor originate overseas and re-direct entii buying orders to Japanese supplie exclusively. Thus, the Japanese ai acquiring a much bigger share of tl Micronesian market.

Japanese traders have also forme two clearing houses for Micronesiai bound goods to oversee the arriv and distribution spheres. AmericE traders to Micronesia have not fo mulated a similar policy to cope wii up to $ll million in claims again Micronesian shipping companies ar trading concerns.

Albatross Inc, of San Francisco, major exporter with a turnover < several million dollars, is known have had major troubles. Australis traders to Micronesia are divided oy< the extent of trading and shippii chaos.

Criticism is mainly levelled Micronesia’s shipping service and tl handling of goods at terminal ai trans-shipment ports. Transpac, tl internal Micronesian shipping con pany, admits to problems betwc port authorities and consignees, says powerful consignees within dl tricts bring all sorts of undue pressu to bear on terminal personnel to g goods released before Bills of Ladii are properly exchanged. The coi

pany disclaims responsibility for re lease of goods and claims for unpaid goods from overseas traders.

Mr J. Connor, managing director i of C. Sullivan (South Pacific), told PIM that trading irregularities were increasing in Micronesia. The area had a far worse reputation for irregu larities than any comparable Islands region, he said. If all exporters asked for immediate payment for goods sent to Micronesia, businessmen in the area would be bankrupt overnight.

Sullivans suffered from big delays in receiving payments but had not yet made major losses.

Last year the company sent about j $300,000 worth of foodstuffs to Micronesia and this year it expected f to send less because of Australia

[revaluation.

Business briefs

• Fruit Distributors Ltd, of New Zealand, has made a grant of $7,500 to the Western Samoa Agricultural [Department to help compensate for Dosses suffered when the Tofua had |to abandon 3,757 cases of bananas [early in January. The Tofua, because of heavy seas, was unable to dock for several days. The bananas started to ripen and had to be left behind, along with some taro. The Western Samoa Produce Marketing Division then sold the abandoned food locally at well below cost, and suffered a loss because the growers had already been paid the contract price. ® A grant of $135,000 from the [Office of Economic Opportunity to American Samoa has a threefold object—development of the taro programme in Manua, further de velopment of the dory fishing pro gramme and a feasibility study of an all-Samoan shopping centre, proposed for the Fagatogo area. • A wood pulp mill is a possibility for Papua New Guinea. Four en gineers from the Parsons Wittmore Co, a major US wood pulping com pany, will make a feasibility study of a suitable location. • Solomons Wholesale Union Ltd and Island merchants C. Sullivan have merged their Honiara interests through Solomons Wholesale Union buying a 25 per cent interest in a Sullivan - owned company, E, V, Lawson Pty Ltd, with an option to take up a further 25 per cent. In future the importing side of both companies will be combined. Solo mons Wholesale Union is 97 per cent owned by Solomon Islanders. The major shareholders are Malaita De velopment Co and Are Are Masina.

Solomons Wholesale Union was started two years ago by the Malaita

Development Co, Are Are Masina and the then Ports Autnority manager, Mr W. Ramsey. • The Papua New Guinea Govern ment will receive $4,720,000 of the net earnings of Bougainville Copper Pty Ltd for 1972. It is made up of $2.2 million in dividends (on 20 per cent shareholding), $1,320,000 in witholding tax on the dividend paid to the major shareholder, Bougainville Mining Ltd, and $1.2 million in royalties. PNG Investment Corpora tion, which also has a 20 per cent interest in Bougainville Copper, gets a dividend of $2.2 million. Net earn ings for the year were $27,681,000.

The final dividend takes $ll million with another $ll million to go in loan repayments. • Now an independent country with the right to make its own in ternational agreements, Fiji will scrap all civil aviation rights which were negotiated for it in the past by Britain and will seek new agreements with such countries as Canada, the United States, Britain, France, Aust ralia, New Zealand and India. These countries have landing rights in Fiji which ask for reciprocal rights in readiness for the day when its own carrier, Air Pacific, will go inter national.