Communist
p. 13 · Read in the full issue
turmoil affects business
By David North
FHE collapse of Communism continues :o cause tidal waves and ripples in South Pacific business circles, most recently hose in New Caledonia and Tonga. In Caledonia, Russia’s desperate need or hard currency has meant it is lumping its exports on world markets to aise needed cash and credits. While lussian exports of vodka, diamonds, and obalt have little impact on the islands, ts export of newly produced (and jrobably stockpiled) nickel has done errible things to New Caledonia’s nickel ndustry. fhe average price for a pound of nickel vas U 556.25 in 1988, when sold for cash >n the London Metal Exchange (LME).
Yhile the nickel price is volatile, the innual average LME price has been Iropping steadily in recent years, falling o 56.05 in 1989, and then in succeeding ears to 54.02, 53.70, 53.18 and to 52.51 n mid May of this year. This is a lecrease of close to 60 per cent, fhe sharpest drop came after the ttempted coup by Mikhail Gorbachev’s opponents in Moscow; once that failed, 11 restraint on the part of Russian •olicymakers vanished, and they flooded he world markets with nickel. The
;eneral world depression did not help
ommodity prices either.
Caledonia’s nickel producers, who hip various types of ore and concentrates o customers in Japan, Australia and the JS, sought to recover by producing more lickel. The annual production in the quivalent of pure nickel moved up from 0,527 metric tons in 1988 to 98,247 tons a 1990; it drifted down to 92,127 tons ast year. But an increase of production f3O per cent (between 1988 and 1992) annot compensate for a price drop of learly 60 per cent.
Vhile the distant Russian problems have •rought gloom to New Caledonia, the qually distant bloodshed in the former Jugoslavia’s Bosnia has been mildly iclpful to Tonga. As a result of sanctions n Serbia, Serbian businessmen and •oliticians find it easier to do deals on •assports of countries other than Yugo lavia and Serbia. America’s National ’ublic Radio has reported that there is booming market in Belgrade for other iations’ passports, with Tonga getting ome of the action. □