Kiribati

has a range of invest ment deals five years’ exemp tion from income tax, customs duty exemptions and protection from competing imported products but no company has yet availed itself of these incentives.

The country has development prob lems enormous even by Pacific standards: its population of 65,000 is spread over no less than eight million square kilometres, and from the capital on Tarawa to Christ mas Island on Kiribati’s western extreme is more than 3000 kilometres. In 1986, the country imported SA23 million worth of goods and exported SA3 million worth (mainly copra and fish).

In brief, self-sufficiency is almost im possible in the forseeable future; factors in the gloomy picture being the country’s geographic isolation and the dispersal of its islands over such a vast tract of ocean, plus the lack of local infrastructure and re sources. Apart from exports the main sources of income are tourism, and the li censing of foreign fishing boats.

Kiribati is desperate for foreign invest ment, and advisers from Westpac have identified its fishing industry as having the greatest economic potential, with tourism

also capable of growth. Like Tuvalu, Kir ibati suffers from inadequate and expen sive air links for any large-scale tourist push. The most popular route to Tarawa is on an Air Nauru 737 via Nauru; Air Tungaru flies to Fiji and Majuro in the Marshall Islands, and operates other routes under charter arrangements. The capital has about 40 hotel rooms in total.

The Kiribati Government has recently begun discussions with a European com pany interested in funding airstrips and hotels for tourists, but arrangements are far from being finalised. Christmas Island has a hotel, which caters mostly to Americans flying in by charter from Honolulu: the main attraction there is fishing, as it is on Tarawa, though there is some traffic from former US servicemen visiting World War II battlegrounds. Sailing and snorkelling are also available.

Another project under discussion is salt production on Christmas Island, but the realisation of this would depend upon subsidised shipping. Commercial fishing remains the real potential given Kiribati’s economic zone, with skipjack tuna the main species. The country is receiving royalty payments from the US tuna indus try, and has licensed South Korean, Tai wanese and Japanese vessels to fish its waters; the Government is also looking to develop a local tuna fleet and processing facilities.

Kiribati has little infrastructure to sup port its push into the investment and banking world.