rich as New Zealand"

Business

French Polynesia "as rich as New Zealand"

By Michael Field

FRENCH Polynesia’s

economy has recovered from the end of nuclear testing with its gross domestic product growing and its per capita income making it as rich as New Zealand.

France used Mururoa and Fangataufa atolls from 1963 until 1996 when the bases, 1300 kilometres south-east of Tahi ti, were closed. Its associated activities were the major revenue sources.

When testing ended Paris established the Contract for Development, an econom ic development programme from 1996 to 2006, currently worth around 18 billion French Pacific franc (US$2lO million)

annually.

The Bank of Hawaii said when nuclear

testing stopped gross domestic product

dropped 0.6 percent and in the following year rose only one percent.

It has grown since with a strong 4.1 percent in 1997 and a 3.1 percent rise in 1998.

“Every indication is that 1999 will be another year of growth, perhaps as much as another 3-s,percent,” the bank said.

But growth over the entire post-nuclear period has been slower than the last five

years of the nuclear testing era. “The con clusion of nuclear testing in French Polyne sia meant a significant change in regime and, therefore, a cause for potentially seri ous economic disruption in the territory,” the bank said.

“Given this change and France’s own fiscal problems, French Polynesia’s eco nomic growth of the last three years, how ever modest, is an achievement. Also notable is the fact that this growth occurred

while income-generating assets, mainly

hotels, were being built in order to create jobs in the years to come.”

The ending of testing removed the main issue causing social discontent.

The independence movement had peaked as its supporters now had to con vince the majority of voters to accept a pos sible decline in living standards in return of

political independence.

The bank says French Polynesia now has the second highest per capita income among the Pacific Islands after Guam and is now equal to that of New Zealand.

The Contract had led to the construction of new hotels in Tahiti, Bora Bora and Moorea and the creation of a new carrier, Air Tahiti Nui. Aggregate income and employment levels were rising from 1996.

“French Polynesia is expected to remain a stable and predictable market, as it has been throughout most of its association

with France,” the bank said.

“In addition to the beauty of its natural environment and its tropical quality of life, French Polynesia has the most complete basic physical, social and financial infrastructure in the Pacific after Hawaii and Guam.”

The Bank says the territory’s resources are still under-utilised. Transfer payments from France funding consumption would remain at the core of the economy and the basis of high living standards.

“France will maintain transfer pay ments close to the current level until 2006 when a policy review may occur... It is unrealistic to expect that a totally self-suf ficient economy will ever exist in the islands.

However, the current push in that direction is not only useful in the long run, but has also given the territory an economic boost that may not have occurred otherwise...

“While there is room for speculation on France’s long-term intent in French Polynesia, there is no indication that France, even under a Socialist regime is seeking an exit. If France had any inten tion of leaving the Pacific, it would have done so two years ago when the current Socialist government in Paris first came to power.”

The territory has accepted its links with France were legitimate and long term.

“Anecdotal evidence suggests that dis content in French Polynesia may have peaked with only a quarter of the Territo

rial Assembly held by the pro-indepen

dence movement.” ■