Trouble In Paradise - Pacific Peoples Under Free Market Assault

by Aziz Choudry (January 1999)

Three lawsuits lodged this January seek over US $1 billion in damages, seizure of profits and unpaid wages from 18 top US companies on behalf of thousands of Asian workers lured to Saipan, in the US-administered Northern Marianas Islands in the South Pacific. Over 50,000 people, mostly young women from China, Bangladesh, the Philippines and Thailand have ended up working in appalling conditions, subject to constant surveillance and harassment, for some 32 Saipan factories mostly owned by Chinese, Japanese and Korean subcontractors, making popular clothing tagged with a "Made in the USA" label, and which enjoys duty-free access to the US market.

Meanwhile, this year's APEC host, the New Zealand government, says it will "ensure that the Asia-Pacific community being constructed through APEC reaches out to those nations that sit in the Pacific as well as around its edges." It claims that "our "Pacificness"" will be a "feature of our hosting of APEC leaders".

And while there is little acknowledgement of the existence of Pacific lands and peoples within the official APEC process - and even among many of the alternative activities and campaigns on APEC in the region - increasing pressure is being brought to bear on them to reorient and restructure their economies in line with the neoliberal agenda.

New Zealand, Australia, Papua New Guinea, Fiji and the Solomon Islands already belong to the World Trade Organization (WTO). Samoa, Tonga and Vanuatu are in the process of joining. New Zealand, Australia and Papua New Guinea are APEC member economies. Both APEC/WTO members and non-members in the region are being encouraged to view APEC and the trade and investment liberalisation agenda as a model for economic development.

The South Pacific Forum Secretariat, which represents the governments of 16 countries in the region has observer status at APEC Ministerial meetings. Forum Leaders and Ministers have increasingly focussed on an economic agenda already promoted throughout the region by World Bank/IMF structural adjustment programmes, Asian Development Bank loan conditionalities, free trade arrangements like the WTO and APEC, as well as pressure from donor countries like New Zealand and Australia which explicitly links future aid commitments to undertakings by governments of recipient countries to pursue further economic reforms to open up their economies and decrease government size and expenditure.

In Madang, Papua New Guinea in 1995, South Pacific Forum Leaders endorsed the APEC non-binding investment principles. The 1997 Forum Economic Ministers Meeting (FEMM) stated that "private sector development is central to ensuring sustained economic growth, and that governments should provide a policy environment to encourage this". The July 1998 FEMM in Nadi, Fiji exhorted Forum members to implement "domestic measures consistent with WTO and APEC principles and obligations". The Forum Secretariat has asked that Forum countries report on progress in implementing WTO and APEC principles and obligations at the 1999 FEMM. The theme of the August 1998 South Pacific Forum meeting spoke volumes about its narrow agenda: "From Reform to Growth: The Private Sector and Investment as the Keys to Prosperity". Plans are also afoot for the creation of a "Forum Business Advisory Council" modelled on the APEC Business Advisory Council (ABAC) and to be formally linked to the Forum to strengthen business input into regional policy-making.

Not surprisingly, the export-oriented, exploitative model of development which characterises the situation in the Northern Marianas is far from unique in the Pacific. Take Fiji. A recent ICFTU report on Fiji states that "the violation of fundamental workers' rights in the area of freedom of association is clearly an important factor in the cost of Fiji's exports and so has a significant effect on Fiji's position in international trade. By 1993, the tax free export sector contributed US$75 million out of Fiji's total GDP of US $885 million....[T]he government has argued to the [Fiji Trade Union Congress] that it cannot improve labour law as Fiji needs a cheap labour force to attract foreign direct investment and so increase exports."

Samoa's biggest private sector employer, Yazaki, the Japanese electrical parts manufacturer, was lured to the country by its low labour costs, non-unionised labour, and political stability, as well as incentives from the Samoan government estimated to cost around US$8 million. The plant produces wire harnesses for Toyota, Mitsubishi, and General Motors. Cuts on overtime mean that most workers earn US $22 for a 40-hour week, just above the minimum wage but not enough to keep up with inflation. Samoa retains the wages paid out to local workers, but the export earnings go to the parent company, a Yazaki subsidiary in Australia. Samoa, with the support of the New Zealand government and other donors, has been pursuing policies of privatisation and deregulation since the early 1980s. At the same time as the poverty gap continues to widen, Prime Minister Eti Alesana asserted that there is no poverty in Samoa - because of the jobs provided by Yazaki!

With much of the fishing, timber, mining, tourism and other sectors now dominated by a handful of transnationals throughout the Pacific, "development" and "reform" have wrought havoc on local communities.

Meanwhile "rightsizing" continues throughout the Pacific. In the Solomon Islands, the New Zealand government aid programme has part-funded a programme to reduce the public sector's size by 7-10%, while New Zealand consultants have provided advice. In Vanuatu, the Asian Development Bank-imposed and New Zealand government-supported Comprehensive Reform Program (CRP) includes significant cuts to the size of the public sector, the introduction of a value-added tax and tariff cuts.

After former PNG Minister for Public Services, Bart Philemon announced in 1995 that he would use New Zealand as a model for privatisation and sweeping civil service reforms, columnist for the Times of PNG, Kumulau Tawali wrote: 'Changing systems and adapting is not as simple as taking a video tape and slotting it into another video machine. Politics involves people and cherished values of generations." But the market ideologues arrogantly claim that anytime, any place, anywhere, market-based solutions are the best - and only - answers.

Moves to push small Pacific nations further and faster in this direction ignore the structural causes of their economic, social, and environmental problems, and the strengths of traditional lifestyles, values, resource use and social support systems. They take no account of the realities of countries like Papua New Guinea where as much as 85% of the population is engaged in the subsistence economy.

They ignore the diversity of the distinct peoples, cultures and societies which make up the Pacific. They obscure the political and economic agendas behind the aid programmes which have resulted in well-founded accusations of "boomerang aid". In many cases, 70-90% of official aid returns to donor countries like Japan, Australia and New Zealand in the form of education services, consultants, and technical services, creating lucrative investment opportunities and new markets for goods and services.

Forced dependency on imports has had dire consequences for small Pacific island farmers, unable to compete with lower priced products from overseas. While Pacific nations are being told to export more to earn more foreign exchange and repay loans, commodity prices on world markets continue to plummet, and the floods of imports of overseas goods and services continue unabated. And as the economic crisis continues, the region's three largest economies, Fiji, the Solomon Islands, and Papua New Guinea have been the worst affected, according to the World Bank.

The South Pacific Forum's narrow economic focus flies in the face of demands from Indigenous Peoples from Bougainville to East Timor, from West Papua to "French" Polynesia for the right to self-determination. And it ignores the vulnerability of small, exposed nations to the vagaries of unregulated markets.

Pressure to open up small island economies to the global market smacks of the same callous disregard with which the Pacific has long been treated by Pacific Rim powers. It has been used as an unwilling guinea pig for nuclear tests, toxic waste dumping, and as a source for cheap raw materials. The latest economic blueprint for the region sees the Pacific Islands having little input into the development of macroeconomic policies which they are supposed to accept.

A key "practical impediment" to rendering Forum Island Countries attractive to investors is the enduring strength of traditional land tenure systems. In 1995, in Papua New Guinea, where 93% of the land is in community hands, and seen as "our bank, our fridge, our supermarket" by the people, massive popular opposition to a World Bank-driven program to register customary title forced the defeat of the government's proposed Land Mobilisation Bill designed to attract foreign investment. Throughout the region, the strong connections between peoples and the land and ocean are under renewed threat from a vision of development that sees only dollar signs and commodities to be bought and sold on a mythical level playing field of the free market.

As a Fiji Council of Churches/NGO submission to the 1999 National Budget puts it: "In recent years we were told to follow the tigers of South East Asia. Now their economies have collapsed. What confidence can we place in those who advise us on economic policy? This leads us to ask: are we trying to make Fiji into something it was never meant to be - a poor copy of large nations, reliant on an economic model in which we will always be dependent or losers? In our current system some may profit but most are excluded or exploited. We believe that this system is not made for us."

Pacific peoples have proud histories of struggles against colonialism. Free trade and investment regimes are resulting in a new relationship of servitude to the economic powers - countries and companies - which have their eyes on the region. After centuries of colonial domination, the Pacific deserves far better than to be locked into a permanent race to the bottom to provide cheap labour and natural resources and new frontiers for profit at the expense of its peoples and fragile environment.

For more details, please contact the Aotearoa/New Zealand APEC Monitoring Group at mailto:gattwd@corso.ch.planet.gen.nz or Fax (64 3) 366-8035 or Phone (64 3) 366-2803

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