We Say 2

Pacific Islanders are being forced to widen their horizons. The comfy days of uncomplicated aid, coconut, cocoa, taro, banana and fishing focused existences are fast retreating in some of their localities and have gone in others.

Globalisation, whatever exactly that may be, has pushed the islands towards a free trade area in which there is little to trade towards "closer economic relations" with large industrialised countries and gigantic trading blocs.

All that, they are being assured, will be good for them. They are being pressed to open their ludicrously weak economies to assault by the economic goliaths. In pursuit of their national interests, the goliaths are quite blatant in declining to practice all that they preach.

The Pacific Islands are told that they should adopt a common currency, maybe, have a single regional airline and airline market, perhaps. They are being ordered to accept a One-China policy, or else, bribed to accept a Two-China policy and to dismantle little businesses like offshore banking arrangements that don't now suit the convenience of financial powers that engineered the opening of them in the first place.

The management of their affairs is interfered with by such institutions as the World Bank, International Monetary Fund (IMF), Organisation for Economic Cooperation and Development (OECD), and now, the World Trading Organisation.

Mini-states are being made to feel that they deserve to be treated as threats to the security of countries that have made security paranoia a new global industry. Should they feel discomfort caused by the stress of bother, bewilderment and bullying, or all the above, the Pacific Islands can take comfort in the knowledge that as victims of globalisation, and all that, they are not alone.

A report from the World Development Movement, a British organisation engaged in fighting government and business practices and policies that keep poor people poor, tells the tale of Senegal, a debt-burdened West African country, forced to accept all the cures prescribed for it by the IMF and World Bank: cuts in public spending, tight monetary and fiscal policies, exported growth, trade and liberalisation, and selling off government enterprises. That package was, in theory, supposed to transform Senegal's fortunes for the better. What actually happened was the liberalisation of agriculture destroyed peasant livelihoods, malnutrition went in 1990 from 23% to 25% of the population, and 80% of the people scrape along on less than US$2 a day. None of the large developed countries became rich through free trade. America, Britain, France, Japan, Taiwan and German grew firstly by protecting their emerging industries and freed up later when it suited them. They still remain notoriously protective of their agricultural industries, which they subsidise to the tune of tens of billions of dollars while preserving barriers that keep the cost of tropical products at abysmally low levels.

The big free trader countries demonstrate that really they are not so. Free Trade prime ministers and presidents know that power requires the votes of producers who can't produce without massive subsidies. In the Pacific Islands, one of the few reasonably successful economies, Fiji's, grew partly because of protection for fledging manufacturing industries. The families that owned them grew rich because the poor were blocked from cheaper foreign supplies of flour, cement, nails, paper products, biscuits, packaged and canned foodstuff and vegetable oil.

Now that the Pacific Islands are moving to free trade, initially between themselves, embryo industries in smaller countries are doomed to be throttled by competition from Fiji, as Vanuatu, the Solomon Islands and Papua New Guinea quickly found. That is a growing pain of development, one that threatens some of Fiji's industries also.

Intensifying competition from cheap Chinese goods, a great worry for American manufacturers, is another factor that is bound to constrain the already narrow range of Pacific Islands growth opportunities. For islands countries that lack of opportunities for heavily exploiting tourism, timber, fisheries and agriculture, the outlook is not something to be over optimistic about.