Micronesia appetiser for US businesses
p. 54 · Read in the full issue
AMERICAN companies, especially smaller ones, who are interested in doing business in the Pacific Islands and their numbers are growing are obtaining their first taste for it in the islands of Micronesia, particularly Guam.
Private American (and Japanese) investment has helped transform Guam’s economy from one dominated solely by US
federal expenditure to one at least as
dependent on private enterprise. The
business-led expansion resulted in Guam having a year of extremely high growth in 1990 and, it seems from the latest reports, 1991 too.
The unemployment figures are well down as jobs in Guam’s private sector have doubled in the past 10 years. Jobs increased 38.4 per cent between 1986 and 1990, and then 13 per cent in the 12 months to June 1991.
The increased local income and investment levels should continue through 1992 and 1993, according to a Bank of Hawaii survey.
A group of us from the South Pacific private enterprise and government were given these details in January when we were invited to attend a two-day Pacific Business Opportunities Conference in Honolulu, spon sored by the bank, the AT&T company and Continental Airlines. The South Pacific
delegates included Ratu Isoa Gavidi, Director of the Fiji Trade and Investment Board, Nigel Ligonia, of the PNG Department of Trade, PNG businessman Wayne Golding, and Andrew Drysdale, chief executive of Air Pacific.
The focus of the conference was to educate American businesses on the opportunities available in the Pacific Islands and encourage them to take action. We were there to take part in panel discussions on the various opportunities.
The 250 or so participants, mostly from small businesses and entrepreneurs, learnt a lot about business in the Pacific Islands, and I believe it might help them be more adventurous in future about investment opportunities in the region. For while it was never intended that way, interest at the conference was heavily concentrated on the islands of Micronesia.
The conference showed that American business eyes are focused on what they see as the growing opportunities in Micronesia, and that American businesses are not really aware of the wider opportunities for two-way trade available in all the islands below the equator. This is despite the fact that PNG and Fiji have the largest populations of all the Pacific islands, their economies are sophisticated, and PNG is the most richly
Tradewinds
endowed in natural resources of any island.
I think the extent of the US interest in Micronesia came ; something of a surprise to the South Pacific group, but a explanation was to be found in the useful political and histon overview of the region that the conference got from Dr Be Kiste, director of the University of Hawaii’s Centre for Pacifl
Island Studies, who is knowledgeable about tH entire region, not merely the islands north of tH line.
He pointed out that while traditionally tH Pacific Islands were divided into the three cultu i areas of Polynesia, Melanesia and Micronesii today it probably was more useful to look at tH region from the point of view of its political an economic characteristics. That way, the diverse 2 political entities divided into three major sphen of influence those with historical connections the United States, those with past or present linj to the Commonwealth, and those that are part France (French Polynesia, New Caledonia, Walli
and Futuna).
“Sphere of influence” is the key phrase here American Samoa, the Commonwealth of tH Northern Marianas, and Guam are politicall integrated with the US (with Hawaii they ha* formed their own “progress association”, tH Pacific Basin Development Council, to cc
ordinate relations with the USA federal government an promote co-operation and economic development). TH Federated States of Micronesia, the Republic of the Marsha Islands, and the Republic of Palau have very close economr links with the US. The political institutions of all these islain are similar to those in America, all the islands are financiall subsidised by the US, and the US dollar is legal tender then It is hardly surprising that American businesses will attemp to cut their Pacific export teeth on island groups whose waj of doing business are similar to their own, and whose busine and customs procedures they can mesh with.
But those of us who took part in the panel discussions, an who sat down with participants informally, found there was? lively interest in a wider range of investment, selling and buyin opportunities, but ignorance of the region as a whole, and jn what is available, has mitigated against closer involvement Greater involvement will not come overnight and it certainr won’t come without continued education, including the kin provided by conferences of this sort. Meanwhile, island natiox searching for overseas investment can’t afford to stop beatin the bushes to flush it out.