The Niue alternative

There’s one cheap option: move the community to Auckland

THE News for Niue has not been good. First, the New Zealand Government announced that aid was being cut, then the company which has been planning to prospect for minerals on the island ran into trouble with the Australian Stock Exchange and had its shares suspended a problem which could throw a question mark over its plans. There was some good news: the rebuilt government hotel was about to open, but overall the indications are that employment opportunities will shrink once again and more people will have to face moving to New Zealand.

At the harshest level of financial evaluation, the cheapest option of the New Zealand Government would be move most of the Niueans to Auckland and give them resettlement grants, per haps preserving just enough of a com munity on the island to service the small tourist industry. At the moment, aid is running at about US$3OOO per person still living on Niue. But it is a solution which is both politically unrealistic in the late 20th century and would also be opposed by a large section of Niue’s population (both among the 2300 on the island and the 10,000 Niueans living in

New Zealand).

It is true that the country had had a bad run. First there was a severe drought, then came Cyclone Ofa and disruptions to the island’s air links when Air Nauru was grounded. An earlier hurricane had destroyed the most prom ising export industry: coconut cream which had contributed nearly NZ5450,000 (U 55270,000) a year to Niue’s export trade. South Pacific Trade Commissioner Bill McCabe said it was the best coconut cream produced in the world. More important, the factory provided a cash income for farmers and

paid a reasonable price for their produce, After the hurricane wiped out most of the trees, the factory tried unsuccessfully to continue on with imported coconuts, The advent of Niue Airlines now chartering a Boeing 737 from Air Nauru, has at least restored regular and accept able ser vices to Alofi. The aircraft can a i so takee out fresh fruit and vegetables f or sale in the Auckland markets, and Niue does not have the same guarantine problems in New Zealand which face the f u u y independent island states. But mor e important the airline will bring in tourists. As Pacific Islands Monthly recently reported, the airline company is P art °f a consortium planning to build a second hotel on the island, But there are signs that the airline is making heavy weather of the Auckland- Alofi route. It ran only one flight in June, and has announced that from July the service will continue at fortnightly fre quency. Bargain fares are also being offered for old people and children, is so f ar i n t o a vicious circle: no tourists are going to spend two weeks on Niue. Nor, said Bill McCabe, would many want even a week there; there is only one tiny beach, some diving and few evening diversions. He argues that the islands needs twice-weekly connections, Niue Airlines is looking to extend services to Nadi, which would allow tourists to include Niue as part ofa Pacific holiday package but, again, frequency is the

key (especially for Japanese tourists, who

like to be on the move). Routes which included links to Rarotonga and Western Samoa would improve the situation even further.

Another part of the vicious circle is that it will not be until the second hotel is built that there will be enough accommodation for a 737-load of tour

ists. And the aircraft will have to run near full if the company is to be able to offer cheap enough airfares to compete with other destinations. Air Nauru, when it operated Auckland-Alofi-Nadi, could never fill its aircraft after it returned to flying last year, Niue was one of the routes abandoned in order to save money.

Apart from tourism and some fresh produce exports, Niue has few options.

Manufacturing, except on a cottage craft or small factory (like clothing) level is not feasible. The island is not in the main tuna fishing waters, although it does receive some money under the multilaterial fishing treaty with the United States. Also, its lack of a harbour rules out the stationing of fishing boats there.

Meanwhile, turmoil surrounds a com pany which had planned to drill for uranium on Niue. The Sydney-based Roycol Ltd was intending to spend Asl million (U 55755,000) on an exploration programme there, which would involve the sinking of eight holes to a depth of about 600 metres to test targets. But Roycol has run foul of the Australian Stock Exchange which suspended the company’s shares over the fact that it had not obtained shareholder approval for the purchase of two New Zealand mineral sands companies. With battles going on to dump various directors, the Niue project remains in abeyance.

Even if drilling goes ahead, the plan is acknowledged to be a high-risk one and something on which the Niueans cannot place too much hope.

The recording of extremely high

gamma radiation levels (60 times higher than generally found in Australia) had given rise to the belief that uranium may lie under the surface of Niue. Roycol was also encouraged by the fact that the soil cover on Niue contained trace elements of mercury, gold, silver, bismuth and chromium.

An engineer’s report on the project said that, if initial work provides enough evidence to offer encouragement, a full

assessment to establish the size of the reserves would cost between Ass million and AS 10 million.

The more immediate problem con fronting the government of Sir Robert Rex is that of laying off people from the public payroll which, with 600 em ployees (about a quarter of the island’s entire population or 80 per cent of the paid work force), had partially disguised the fact that there is not enough work on Niue to provide jobs in private employ ment.

In 1989 the then Labour administra tion in Wellington urged Rex to stop using aid money to prop up the public service and channel more into develop ment projects, a plea that went largely unheeded in Alofi. There was a Niue Concerted Action Plan which, between 1988 and 1990, was to have seen some of the aid funds spent on agriculture,

forestry, fisheries and tourism, but there is little to show for it. A report in 1988 by the New Zealand Audit Office said that the Niuean Government had been negligent in its use of public money.

Now the Bolger Government has cut aid and this will force Rex to act. More to the point, it will probably force a few hundred more Niueans to act in terms of packing up and moving to New Zealand as the island’s labour market shrinks even further.

In the end, Niue is too small to be a viable economic entity. Development projects can offer only marginal improve ments. The island will continue to be a responsibility of Wellington.

But there is little patience there these days with what are seen as unnecessary or indulgent uses for scarce funds. Niue can expect a few chill economic winds in the coming years. □