Pacific Islands

V

Economic Activities

The economies of New Zealand and Hawaii are not discussed in this section. For information on those economies, see the articles on New Zealand and Hawaii.

The economies of Pacific Island nations are still largely dependent on the primary sector—that is, on agriculture, fishing, and mining—and industrial activity is minimal. Most Pacific Islanders are subsistence farmers and fishers. On some of the larger islands, plantation agriculture, mining, and forestry are also important commercial activities. Tourism and cash remittances from the many citizens who live abroad are also increasingly important sources of foreign revenue. Indeed in some places, such as Niue and Tonga, more citizens live abroad than reside at home. Some of the smallest political units of Oceania, including Niue, Tokelau, and the Cook Islands, earn significant sums of foreign income by selling postage stamps to collectors worldwide.

A

Agriculture, Forestry, and Fishing

Most Pacific Islanders grow crops that they use themselves. Farmers on the high islands, where soil is generally richer and rainfall heavier, are able to grow bananas, breadfruit, and root crops such as sweet potatoes, yams, cassava, and taro. During the colonial period, plantation agriculture and commercial crops were introduced to the high islands, especially the larger continental islands. Coffee plantations are important in New Caledonia and Papua New Guinea; sugarcane is Fiji’s principal export crop; vanilla is raised for export on Tahiti; and cacao, the source of chocolate, is important in Melanesia. Ginger, oil palm, and rubber were also introduced during the colonial period and continue to be of local significance on a few islands.

The most common crop of low islands is coconut. Coconut plantations are a widespread source of copra, or dried coconut meat, which is sometimes the major export of such islands. Low-lying Vanuatu and Kiribati, for example, rely heavily on copra exports.

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Extensive rain forests, and thus timber, are found only on the larger high islands. The majority of New Guinea is covered in either mangrove, rain forest, or alpine vegetation, and sawn timber from the rain forests accounts for about 5 percent of Papua New Guinea’s export revenues. Forest products are also important exports of Solomon Islands and Fiji.

Fishing is an important source of food for almost all Pacific Islanders living near coastal waters. It is also a major export earner for some economies, such as Solomon Islands. Other products from the sea such as pearls are important in some areas, as in French Polynesia, where cultured pearls provide export revenues. Occasionally the nations of the Pacific Islands have had fishing disputes with larger nations such as the United States and Japan. In 1986 a treaty signed between the United States and the South Pacific Forum Fisheries Agency ended a long-running dispute over the size of U.S. fish catches in the Pacific.

B

Mining and Manufacturing

Minerals are a valuable source of income on some Pacific Islands. Kiribati’s Banaba (Ocean Island) and Nauru have been major sources of phosphate rock. However, phosphate has been exhausted on Banaba and is nearly gone on Nauru. New Caledonia has rich deposits of nickel, chromite, and iron ores. Fiji and New Guinea mine gold. One of the world’s largest copper deposits and considerable reserves of oil and natural gas are found on New Guinea. The Pacific seabed has also begun to be exploited for its vast mineral resources. Large reserves of petroleum lie in the continental shelves along the Pacific Rim. On patches of the ocean floor lie fields of “manganese nodules,” potato-sized nuggets of iron and manganese oxides that sometimes also contain copper, cobalt, and nickel. Programs are under way to examine the feasibility of mining these deposits.

In most of the Pacific Islands, manufacturing is limited to handicrafts and food processing. However, some of the more developed economies, such as Fiji’s, have also established export-oriented industries, including textiles and garments.

The contribution of mining and manufacturing to the earnings and employment of the Pacific Islands varies but is generally small, especially compared with agriculture. In Papua New Guinea, for example, industrial employment (including mining, manufacturing, construction, and utilities) accounted for 4 percent of jobs in 2000 although the industrial sector made up 42 percent of the gross domestic product (GDP) in 2003. Manufacturing, construction, and power in Fiji accounted for 34 percent of total employment in 1998 and 25percent of GDP in 2005. A few of the islands are extremely dependent on a single commodity. One example is Nauru, whose only significant export is phosphate rock, derived from rich deposits of guano.

C

Trade

Pacific Island countries receive imports from and deliver exports to their former and current colonial powers—which include the United States, Britain, New Zealand, Australia, Germany, and France—as well as Canada, and increasingly, Japan. In the early 1990s the three leading markets for Papua New Guinea’s exports were Japan and two former colonizers, Australia and Germany. Papua New Guinea received most of its imports from Australia, Japan, the United States, and Singapore. Most countries in the region export primary commodities such as crops and minerals and import manufactured goods and mineral fuels. The vast majority of Pacific Island nations experience a trade deficit. In the mid-1990s, for example, the cost of Fiji’s imports was about 1.5 times the earnings from its exports; Tonga’s imports were nearly 5 times its exports; and Vanuatu’s imports were more than 4 times its exports. Papua New Guinea was a rare exception, with mining-led exports far outpacing imports.

In 1981 several nations of the South Pacific signed the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) with Australia and New Zealand. In the hope of addressing the huge trade imbalances of the Pacific Islands, SPARTECA was designed to ease restrictions in Australia and New Zealand on imports from the islands.

D

Tourism

Tourism has become one of the major income earners and employers of local workers in the Pacific. Fiji attracts more tourists than any other Pacific Island nation, with 549,911 visitors in 2005. In 1989 tourism surpassed sugar as Fiji’s prime source of foreign income. French Polynesia was the second most popular tourist destination. In 2005 it had 208,067 visitors, the majority of whom stayed on Tahiti. As with trade goods, tourists come to the Pacific Islands from former colonial powers and nearby larger countries. Thus many travelers from Japan, the United States, Britain, France, Australia, and New Zealand vacation in the Pacific Islands. Recently, Japan has become the largest single source of visitors, especially to the island nations in Micronesia closest to Japan.

Most tourist facilities are owned by foreigners, however, and much of the profit from tourism leaves the Pacific. Furthermore, many of the products used for tourism (such as food, drinks, and hotel furnishings) are often imported and further drain already poor economies. Although tourism is an important source of employment, jobs are often seasonal, and typically only low-skill jobs are open to islanders. Another problem related to tourist activities is environmental degradation, especially of coral reefs and rain forests. Many once-pristine coastal areas have been taken over by buildings and other developments.

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