future-on one leg

Trade

Winds

Planning the New Hebrides’ economic future-on one leg

Britain, with what seems to be a modicum of lukewarm support from its partner France, is planning an economic operation in the New Hebrides designed to assist the condominium to paddle its own canoe when independence comes. Ken McGregor analyses the whole operation which has been mounted in new headquarters in Vila.

Less than a couple of blocks from where the tear gas flew last November 29 in Vila, the closest thing the New Hebrides has to an economic think tank is quietly ticking away.

With the grandiose title of “Joint Office of Development Planning”, a small, virtually one-man operation is tucked away on the ground floor of the uninspiring Oceania Building.

David Potton, a British economist with considerable economic and business plan ning experience outside Bri tain, is the man in the hot seat.

His French equivalent, in what is still officially a joint facility, Bruno Cazals, is long since departed, his term of contract outside Paris up. The French, which did not go very much for British “develop ment plan” type organisations for troublesome colonies, didn’t bother to replace their representative and have no future plans to do so.

JODP, however, is strug gling on, aware that its impact is thus blunted somewhat by lack of direct French par ticipation in initial studies md at least a 12 months’

Jelay in seeing any of its re commendations followed up because of continued political incertainty.

Which is all rather a shame )ecause, when examined, (ODP has produced and is •till producing a wealth of )asic material, terms of eference, economic thinking )n non-political progress in he currently most unweildy condominium.

What isn’t generally ap

>reciated, unfortunately, is

he fact that, despite some 18

nonths of publicity mostly

concerning party politics, werseas big country involve nent and possible violence alk, economic action has >een mostly positive.

With a couple of excep ions, as Mr Potten notes, re ceipts and production from nost industries in the New lebrides have all been up in his period. This includes

tourism, copra and cocoa, some of the major con tributors to the New Hebri dean economy.

Good news here has made it easier to forecast plans for the base of a viable several-year development plan for this is land group, of the sort ex- African British colonials love to detail at financial reporting time under Pacific coconuts.

Most commodities exceed ed 1976 growths, Mr Potton points out, and he described turnaways of overseas liners, such as P & O’s Arcadia in early December, as mere “un fortunate hiccups” in the in creasingly attractive tourism sector.

Mr Potton remains scepti cal of revenues from liner calls anyway, because, he notes, in 1976 four ships ac counted for 60% of total liner receipts because of their size and the buying madness ashore of their passengers.

JODP’s job, then, to date, has been to identify various sectors worth scrutinising, such as currency and overseas aid, study them and put for ward various “what if’ con jectures in these areas should significant changes take place in the future.

Its reports and there are a growing number of them, such as an analysis on specific passenger expenditure from visiting liners, for example, due in February are com pulsory reading for a funda mental understanding of the ground rules in the New Hebrides.

They should not, in any way, be construed as in-depth strategy scrutiny of everything involved with a particular sector. Those looking for a cheap and ready answer for an immediate investment deci sion will go away disap pointed.

In the same context, those rushing in, expanding or even pulling out would be most un wise to over-look the Cazals- Potton reports.

A more recent report con cerning the alternatives for the condominium’s two cur

rencies, for example, is a must for bankers and the New Hebrides is the most over banked town in the South Seas!

The JODP’s Resource Survey Factors Affecting the Choice of Development Objectives is one of the ma jor accomplishments of this operation. It is a start, at least, for a blueprint for an eventual central planning office for the group, if the French can ever be persuaded to re-fill the va cant Cazals spot out of renew ed interest or the secondment of another French economist.

This survey discusses a three-year economic and social development plan, 1978/80. Approval of such a plan is now clearly “not on” because it was due out in detail early this year, which it won’t be, and because of the New Hebrides lameduck legislature.

It is fascinating to note here that while plentiful supplies of French versions of the plan still abound in Vila shops, English translations of the survey were sold out weeks ago.

In its survey, JODP got down to some straight talking: “A development plan for any country requires two main foundations knowledge of the resources available and basic objectives ...”

It notes that its report covered the resources that were available, except the future size and structure of the New Hebrides admin istration and the future likely levels of financial assistance from Britain and France. It says that basic long-term guidelines for the develop ment plan called for various objectives which could in clude development of rural and agricultural areas, a more equal distribution of income, more Melanesian participa tion in industrial and com mercial enterprise and rapid growth in national income.

Others could include strengthened balance of pay ments, increased financial

independence, reduced

vulnerability to fluctuations in the international economy, rapid replacement of ex patriates by New Hebrideans and improved social services.

It produces three examples of new projects: • Cocoa it will benefit New Hebrideans in rural areas and tends to assist those who have land. It will not create new jobs, but its may provide more work for village dwellers and reduce migra tion from rural areas. Econ omic implications here in clude government or overseas aid, increases in export tax revenues, increased exports and results in the medium to long-term. • A brewery would pro vide jobs for unemployed New Hebrideans in urban areas but would need some expatriate managers. Economic im plications here would include funds from overseas investors, no effect on government revenue, will reduce imports and would produce results in the short term. • A rural wharf construc tion project which would benefit rural areas and en courage other economic development in rural areas.

The effect on labour force would be insignificant. Econ omic implications would in clude funds from government or overseas aid, would in volve annual maintenance costs, may help increase ex ports of agricultural products and each wharf could take three months to construct.

Another fascinating JODP study is titled Possible Indus trial Opportunities in the New Hebrides, which comes up with a list of new industries intended mainly to substitute

for imports. It makes the sobering comment initially, however, that the New Hebrides import bill could not be chopped by more than |lo%.

The statement here is made after earlier conclusions that 65% of current imports by value could never conceiveably be replaced by production in the New Hebrides. It says 17.80% of current imports were represented by induses felt to have an “outside chance” of establishment.

A balance of 11.39% of imports represented items “very unlikely” to be replaced by

local production.

JODP emphasises that the above percentages do not mean that imports could feasibly be reduced by 23.61% by

establishing all the listed‘“im port-substituting industries .

This is because many indus tries listed would depend heavily on imported raw materials and, also, the estab lishment of such industries would not necessarily replace all imports of related pro ducts.

JODP’s “good chance” new import replacement industries still makes interesting read ing. It is; biscuit manufactur ing, beer, cement, ice cream, paints, tyre retreading, soap, and footwear, Those with an “outside chance” are tobacco process ing, boxes, canvas goods and battery assembly, Budding entrepreneurs may now step on the blocks mark ed “Go”.