Business and Development

Anz Revaluation Hits Island

Families In The Breadbasket

The New Zealand (10 per cent) and Australian (five per cent) re valuation of currencies on September 9 had the immediate effect of sending up the cost of imported food in a number of Pacific countries and ter ritories already battling hard to com bat the world-wide problem of in flation.

Overall the effects were varied.

Fiji had something of a “mixed grill” as it announced at the same time that preferential tariffs were to be abolish ed in January, 1974, in favour of a single line tariff. And on September 10, Fiji revalued its currency by five >er cent to offset higher prices for a number of key commodities and appliances it imports from Australia, aer biggest supplier.

Papua New Guinea was in a cleft stick as it operates within the Aus ralian monetary system. PNG trade vith Australia was unaffected.

Primary producers will now receive ess for their goods which are sold o the US, the UK, Europe and fapan. Copra and cocoa planters are mjoying high prices at present, ilthough lower than those of three nonths ago. Coffee and rubber prices are fairly good, but the tea narket is depressed, and the revalua ion is another knock to growers.

On the importing side, Papua New Guinea will pay less. Two of the nain suppliers, apart from Australia, ire Japan and the UK.

Bougainville Copper, overall, will irobably gain from the revaluation. \ gain of five per cent on loans of ibout $203 million is worth more han $lO million to the company.

Shipment and treatment charges, >aid in US dollars, mean another aving. The sales contracts are yritten in US dollars which, theore ically, means a drop of five per cent n earnings. But a forward cover for ix months at pre-revaluation prices vill offset much of that loss.

New Caledonia and the New iebrides which are big custo ners of Australia, now have to pay nore for imports, or cut them to the ame monetary value which operated >efore revaluation.

Fiji has been struggling hard to combat galloping inflation, parti cularly in food prices. That was one of the country’s reasons for abolish ing the preferential tariff as a number of importers found they could land food more cheaply from the US, than Australia and New Zealand.

By revaluing five per cent Fiji wiped out any possible adverse effect on imports from Australia; but it is still five per cent worse off in relation to New Zealand, from where it draws most of its meat, and a pro portion of butter, cheese and ghee.

The tourist industry will suffer to some extent. There will be no change for Australian tourists, regarded as the biggest spenders, but Americans will have to pay more, which may cause them to look elsewhere. New Zealanders will have cheaper holidays in Fiji, The Cook Islands will be unaffected in trade with New Zealand. Western Samoa, too, will not be affected much in dealings with NZ, but will have to pay more for Australian imports.

Tonga will have to pay more for imports from Australia and New Zealand, which are two big suppliers.

French Polynesia has been attracting a growing interest from Australian and New Zealand exporters, and will

have a bigger import bill with those countries.

Mr Julius Chan, the PNG Finance Minister, said the Australian dollar had, in effect, been devalued by more than 5 per cent since February because it was tied to the US dollar.

The latest move merely redressed some of the effective devaluation.

The prices of most of PNG exports were much higher than a few months ago. The revaluation would cause problems to one or two industries, but the government would keep those problems under review.

A. Samoa may

get refinery

A SUS3OO million oil refinery is a possibility for American Samoa. Gov ernor John M. Haydon is against it as an environmentalist, but as an ad ministrator he has to consider the impact of a refinery on the terri tory’s economy. The Office of Samoan Affairs will be asked to find out from the people just what they think about it.

Should the project go ahead it will eliminate Samoa’s dependence on the United States for money. A Texas firm, Guam Oil Refining Co, has in

dicated it would like to go ahead with the refinery as soon as possible.

Some of the benefits would be: • Employment for 1,500 for two years; • Permanent employment for 300 to 400; • Revenue of about $14.6 million a year.

The plant would be able to refine 200,000 barrels a day. An offshore pumping station for tankers of more than 250,000 tonnes would need to be constructed a mile from the coast between Leone and Vailoatai. The company would be expected to con struct a $1.5 million boat harbour facility at Leone, not only to serve tankers, but to provide a terminal for inter-island vessels. As a side benefit, this would cut nearly one third off the run to Western Samoa.

Also to be considered in the plan is a fair rent for 900 acres of land involved, crop losses and the reloca tion of people living in the area.

Only a small area of the land would be used for the plant. The remainder would be used for offices, ware houses, water treating basins, and a large tank farm. Some would be held for future use.

Under American Samoa law the land can only be leased for a maxi mum of 30 years, with an option to renew.