Tahiti’s new economic challenge

FRENCH Polynesia faced the im portant challenge in the coming years in finding a way to sustain itself on a more economically independent basis, according to a new report on the territory from the Bank of Hawaii. French Polynesia has endured persistent merchan dise trade deficits in recent years.

Although an abrupt change in the French government’s role was not ex pected in the near future, these deficits could be a problem if the economic contribution from France were to dimin ish. These expenditure inflows, effectively exports of services to metro politan France, provide the single most important source of financing for French Polynesia’s external imbalances. In 1989 the territory’s merchandise trade deficit ofcfpBl.4 billion (US$695 million) was equivalent to 28.5 per cent of gross domestic product.

The Bank of Hawaii sees tourism as an obvious candidate for export earnings growth. No consistent data is available, but tourism receipts are thought to have reached about 18 per cent of the value of merchandise imports in 1986 and 1987.

The report said that tourism had tended to be concentrated on Tahiti and parts of the Windward and Leeward groups, but had room to grow in the territory as a whole. The Bank of Hawaii recommends ecotourism and cruising as sectors which could be developed. The report said the stagnation in growth of the territory’s economy during 1988 and 1989 was partly due to a dramatic decline in tourist arrivals following the axing of some air services from the United States and the ending of regular

cruise ships working out of Hawaii.

Travel to French Polynesia by Ameri cans has yet to make up the ground lost in the mid-1980s. But the report said that structural features of French Polynesia’s trade relationship with France and the European Community may contribute to import dependence. While the territory enjoys preferential access to European markets and products, this treatment combined with heavy reliance on import duties to generate revenue introduced distortions in the prices of tradeable goods. “In the aggregate, it might be more efficient, and French Polynesia’s terms of trade more favourable, for the current tariff structure to be phased down and for trade outside the extended European Community to be substituted for trade within it,” the report said.

Over the next 50 years, great export potential lies in the ocean resources French Polynesia controls. The terri tory’s EEZ covers about four million square kilometres of ocean, and Japan, Korea, Taiwan and the United States have fishing rights in that zone. □ Cable TV study FRENCH Polynesia’s government is to study a report from the territory’s Ministry of Posts and Telecommunica tions on the introduction of cable television, which would be additional to the existing free-to-air channels operat ing from Papeete which are beamed by satellite to all islands in the group. The service, with nine channels to select from, will cost USS3O a month, or US$6O for access to a 3 two-channel selection. □