Currents of Power
The Status Quo Is Being Swept Away By Change
This past year has been one of great change in the Pacific, a change reflected in Pacific Magazine's latest Power 10. Our list, admittedly subjective, is our way of ranking the most influential people in our region.
Some of the changes are obvious. John Howard, long a Number One mainstay on the Power 10, lost badly in Australia's parliamentary elections last year. His replacement, Kevin Rudd, makes it to the Power 10 at Number One, but not simply because he is Australia's prime minister.
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And if you think those small gestures aren't important, all you have to do is remember what happened when Sir Michael was made to go through a security screening checkpoint in Australia on his way back to Port Moresby. The Howard Government could barely bring itself to offer a public apology for the embarrassing actions of an over zealous security officer.
We also note with considerable interest the inclusion, at the Number Two spot, of Denis O'Brien, the chairman and founder of Digicel, the mobile telephone provider that is remaking personal communications in the Pacific. O'Brien's inclusion reflects a strong current that is beginning to be felt in many parts of the region: the power of technology to change the traditional balance of power from government-controlled institutions to private citizens armed with mobile telephones and personal computers.
Digicel's vision-it is moving quickly to be the provider of choice for telephonic communications in every Pacific Islands market-is stunning for its breadth and depth. It is already on its way to becoming one of the top brands in the Pacific Islands, and could soon eclipse such established brands as Nestle, Westpac and Coca Cola.
As has been the case in past Power 10 rankings, Pacific Islanders make up a minority of those who make it to the list. This reflects, in our opinion, an obvious reality of today's Pacific: outsiders and outside forces are playing the leading role in shaping the region.
It is instructive that the two Pacific Islanders who made it on this year's Power 10 represent two extremes. Sir Michael Somare of Papua New Guinea represents the Pacific establishment, an older guard (in age and attitude) that works within the system. At the other extreme is Fiji's interim prime minister, Commodore Voreqe Bainimarama. He represents the new Pacific, one that is not beholden to the status quo. In fact, it sees the status quo as an example of all that it cannot or does not have.
All bets are off on which approach will dominate regional governments. So far, thankfully, Fiji's coup culture hasn't infected the thinking of opposition or disenfranchised groups in other Pacific nations. But there have been obvious signs that in many parts of the Pacific, the status quo no longer represents the aspirations of large blocs of the citizenry.
Think of the riots in Honiara and Nuku'alofa, which resulted in entire city blocks being burned to the ground. Think of growing anti-Chinese sentiment that's evident in markets as diverse as the Marshall Islands, Palau, and the Solomon Islands. Think of the continuing migration of tens of thousands of Pacific Islanders to metropolitan areas in search of a better life, an exodus that says as much about individual aspirations as it does about the lack of opportunities and development in the islands.
Finally, we note the continuing inclusion of the leaders of China and Taiwan. Their return to the Power 10 list, and their likely inclusion on future lists, reflects another major current sweeping through the Pacific. That is the growing role of Asia in determining the future of the Pacific Islands.
Indeed, we can foresee the day when Asians dominate the Power 10. That day, we believe, is in the not too distant future.�
1–Kevin Rudd
Prime Ministe
r of Australia
A couple of months after Kevin Rudd was elected as Australia's new prime minister he made his first state visit-not to the United States or England or China, but to Papua New Guinea. As his PNG counterpart Sir Michael Somare remarked, it was the first state visit by an Australian Prime Minister to his country in 33 years, and was seen as a clear indication to the region of where Rudd's priorities lie. Rudd himself said it was a new opportunity for Australia-Pacific Island relations.
In PNG, and then in Honiara which he next visited, Rudd promised more aid and a new era under the umbrella of "Pacific Development Partnerships" which would embrace improvements to economic infrastructure and job creation, private sector development, better education and health services, and improving governance.
If some of the messages are familiar, his style is more palatable to Pacific Island leaders. Rudd says he wants to host next year's Pacific Islands Leaders Forum "to send a clear message to our regional neighbors that Australia is back in business in Pacific affairs."
Despite Rudd's strong start, it won't be smooth sailing. The issue of mining on the Kokoda Track, a wartime icon for many Australians but a potentially lucrative mining site for the local landowners is a sensitive issue. Pacific leaders continue to press for a trial seasonal labor scheme for Pacific Island workers. Rudd kept his promise to close Australia's refugee detention center on Nauru, but now needs to work with the Nauruans to rebuild a still devastated economy in a politically volatile state. But even on these issues Rudd looks willing to negotiate. Harder will be the issue of Fiji, on which Australia continues to be one of the more vocal opponents of the military regime.
Rudd left a namesake in Papua New Guinea. A Goroka couple named their fourth child "Kevin" after he visited the local hospital. Pacific Island leaders will be hoping that's a good omen, and that other policies and initiatives he delivers in the region are as promising.
2–Denis O' Brien
Founder and Group Chairman, Digicel 
If there is one industry in the Pacific Islands that has seen rapid change and diversification in the past few years, it is telecommunications, and specifically mobile phone use. And at the center of this change is an Irish entrepreneur with businesses in Europe, the Caribbean, Central America and now, the Pacific Islands.
Denis O'Brien founded Digicel in 2001 after successful forays into the radio station and mobile phone businesses in his native Ireland. Digicel cut its teeth in the Caribbean, where last year it had 4.7 million subscribers across 22 Caribbean and Central American markets.
Digicel now has licenses in Samoa, Tonga (where it acquired Tonfon), Fiji, Papua New Guinea and Vanuatu. It has a contentious "experimental license" in the Solomon Islands.
While Digicel has grown rapidly, there are worrisome obstacles in its path. Solomon Telekom has filed an injunction to stop Digicel from operating, an action which Digicel claims "is sending a clear signal that they fear competition and will do everything in their means to prevent the development of a healthy competitive and vibrant telecommunications industry in the Solomon Islands."
In Papua New Guinea there is an ongoing battle over ownership and control of infrastructure, prompting O'Brien to make a visit in October last October to try and assuage frazzled nerves in government and government operators.
The company was granted a full license to operate in Fiji. But the new chairman of Fiji's Ba Provincial Holding Company, Ratu Tevita Momoedonu, questioned the process and threatened civil disobedience if Digicel was awarded the license. He in turn has been threatened with defamation by O'Brien who says Digicel was not corrupt nor did it collude with, mislead or deceive the people of Ba or the Fiji government.
Regionally some in the industry also question the process by which Digicel has spread its influence, from support via the World Bank's International Finance Corporation to the pace with which governments are opening their markets, and the perception that this is at Digicel's behest rather than as part of any integrated economic strategy.
But if the voices of businesses and mobile phone customers count for anything, Digicel is likely to continue to spread its influence. Next on Digicel's Pacific agenda: The Cook Islands, American Samoa and Nauru.
3–Helen Clark
Prime Minister of New Zealand
New Zealand voters will go to the polls this year, with local analysis putting the government of Prime Minister Helen Clark behind the Opposition at this early stage. So it's likely Clark will increasingly focus her energy on domestic issues, particularly economic management, as New Zealand's performance compared to that of neighboring Australia and other developed nations has been unimpressive.
But New Zealand and Clark herself remain one of the Pacific Islands' most important partners, for sheer proximity, historical ties and economic links.
New Zealand's total assistance to the Pacific in 2007-2008 is NZ$205.5 (US$160.82) million and its programs in Solomon Islands and Tonga are especially significant.
New Zealand has also just signed a market access agreement with Samoa as part of that country's bid to join the World Trade Organization (WTO). And the country recently announced visa-free transit through Auckland by Pacific Island nationals (apart from Fiji, which is still being punished for the coup of December 2006.) Clark continues to be a vocal critic of the Bainimarama regime, most recently after an Australia publisher of a local newspaper was deported. "It's inconceivable that you can hold open, free and fair elections if you have media intimidation," she said.
But it is in the field of labor mobilization that New Zealand has had the largest impact. New Zealand allows for up to 5,000 people from Pacific Islands to enter the country each year as seasonal workers. Workers from Vanuatu, Tonga, Samoa and Kiribati have participated in the trial, with more countries to follow. Australia is paying close attention and may introduce its own pilot scheme later in the year. The fact that New Zealand has implemented the program, not withstanding the fact that it has had some teething problems, has created enormous goodwill for the country amongst its Pacific Island neighbors. It's likely to be one of Clark's strongest legacies, whether she returns to office after the elections or not.
4–Voreqe Bainimarama
Interim Prime Minister of Fiji
Fiji's interim prime minister, Commodore Voreqe Bainimarama, is a man under pressure.
The country's economy, hammered by the December 2006 coup, is still a long way off recovering. It contracted by 4 percent last year.
The international community led by Australia, New Zealand and the United States, continues to level travel bans at the country's interim government and its associates. The result is many locals who could help the country recover are unwilling to become formally involved, for fear of being grounded.
And there is a deep skepticism both within and outside Fiji that elections can be held by March 2009 as Commodore Bainimarama has promised on several occasions to the international community.
In Tonga for a meeting with his counterparts last year, Commodore Bainimarama said he had "come with an open heart and an open mind. We came as an underdog and came back as winners. " That Forum recognized Commodore Bainimarama's blueprint for the future, the so-called "People's Charter for Change and Progress, "while stressing it shouldn't distract from progress towards elections. Tongans, and in particular Prime Minister Dr. Feleti Sevele who hails from the same alma mater as Commodore Bainimarama, welcomed him warmly to that meeting. Discussing the outcome later, Dr. Sevele urged journalists, "Let's not be cynical about it. Let's give them a break this time. Let's say 'Ok, you've been given the chance.'"
Fiji is crucial to the region because of its geographic position. Many businesses with regional links are headquartered there. It is potentially an important member of the Melanesian Spearhead Group but internal political turmoil has done nothing but hold up the progress of that organization in recent years.
Until elections are held, Fiji's fortunes will continue to dominate regional meetings. One wonders how long her neighbors will have the patience for that.
5–Sir Michael Somare
Prime Minister of Papua New Guinea
Papua New Guinea Prime Minister, Sir Michael Somare, better known as. 'The Chief' celebrated 40 years in politics in March with the familiar refrain that he is ready to retire. It's a comment he makes regularly—but until it actually happens, Sir Michael remains the Pacific Island's most experienced and powerful elected leader.
This was something Australia's new leader Kevin Rudd acknowledged in paying a state visit to Papua New Guinea earlier in the year. Rudd said PNG's proximity to Asia and Australia means it has a great stake in the region, but also that "perhaps your most important role is looking to your east, where the smaller Pacific countries lie.
"As a leader in the region, Papua New Guinea is uniquely placed to help the island countries of the Pacific meet the challenges ahead."
Sir Michael has already been playing this role, in particular in trying to mitigate tensions between Honiara and Pacific Islands Forum members over the Regional Assistance Mission to Solomon Islands, and between the Fiji administration and the rest of the Forum over progress towards elections.
PNG's influence and position in the region has been strengthened by its good economic performance. The mining and petroleum sector continues to expand, and local manufacturers are making inroads into new markets. In March it was for the first time rated as a "stable" destination for investors by international ratings agency Fitch Ratings, with Somare's role acknowledged as one reason for perceived stability. "Prime Minister Sir Michael Somare's re-election and stronger mandate underscored the credibility of policy continuity in the near term," the director of Fitch's Sovereign Rating team, AI Ling Ngiam says.
6–Wen Jiabao
Premier of the People's Republic Of China
The diplomatic battle between China and Taiwan remained fierce over the past year, with Chinese Premier for Wen Jiabao at the center of it. Wen was reappointed as premier for another five year term in March. This will see him guide the country through the Olympics, a new relationship with Taiwan President-elect Ma Ying-jeou, dissent in Tibet and by extension, through changing relations in the Pacific Islands region.
Following protests in Tibet, Fiji voiced its public support for China's response. "People's Republic of China has been a long standing friend of Fiji and we value China's contribution in Fiji's economy, "Interim Prime Minister Voreqe Bainimarama said in a statement.
Translation: money talks. Fiji is negotiating loans worth over $228 million from China. Already approved is $113 million for the upgrade of rural roads.
China has also funded the Melanesian Spearhead Group headquarters in Vanuatu, and via a soft loan, reconstruction of Nuku'alofa township. Papua New Guinea is also a beneficiary of Chinese funds for some 59 projects.
The Federated States of Micronesia recently accepted a $4 million grant from China. The Cook Islands will draw on Chinese funds to build a sport stadium for the 2009 Pacific Mini Games.
But this show of largesse continues to concern many. CIA chief Michael Hayden recently told the Washington Times, "When you go and essentially corrupt an island nation in the South Pacific with massive infusions of aid no matter how appropriately or inappropriately it will be used, and you strangle nascent democracies in their crib by doing so just so you can get that island nation's vote in the General Assembly, that's pursuing it for a very narrow base."
7–Gen. David Bice
Director, Joint Guam Program Office
As a U.S. Marine Corps general, David Bice was used to giving orders and having his Marines obey. In his current job as director of the U.S. federal government's Joint Guam Program Office, which is overseeing an estimated $15 billion military build-up on the island, Bice must now nudge, encourage, compromise and yes, occasionally order his way to success.
It is a mammoth undertaking - how do you pour billions of dollars onto a small tropical island tens of thousands of miles away from the U.S. mainland and have your projects be on budget and on time? The pitfalls are many: there are still environmental assessments to do; development plans to complete; procurement processes to finalize; and managing sensitive relations with Japan, which is funding about $6 billion worth of projects, and which must deal with a continuing U.S. Marine Corps presence on Okinawa.
At this point, it will be at least two more years before project time lines are finalized, environmental assessments are completed, and large-scale projects get underway. But there is no doubt that the “Guam build-up" is a go.
In that sense, one can think of Gen. Bice's responsibility to develop a plan for the 10-year construction boom as the contemporary equivalent of planning the D-Day invasion. Tens of thousands of people are involved. Hundreds of millions of dollars worth of construction equipment and supplies will be used. Billions of dollars worth of projects will be awarded.
It is unlikely that Bice will see the entire project through to the end. But the planning that he's now overseeing is the key to the successful reshaping of Guam as one of the U.S. military's most important forward bases in the Asia-Pacific region.
8-Nicolas Sarkozy
President of France
French President Nicolas Sarkozy portrays himself as a modernizer, a new broom sweeping through the old and tired political institutions of France. A former interior minister and leader of the ruling UMP, he has sought to be seen as an innovator in the early months of his leadership.
In March, photos of the president and his glamorous new wife visiting Britain dominated world media. But a Sarkozy visit to French Polynesia scheduled for April has been postponed, perhaps cancelled, following a controversial election there.
Sarkozy's man focused on the region, French State Secretary for Overseas Territories Christian Estrosi, had made a big impression in a short time in the role. Before leaving to become mayor of Nice, Estrosi, on Sarkozy's instructions, saw through the passage of several new measures—one of which was an organic law designed to put French Polynesia back on the road to "stability" and "transparency" - through France's Constitutional Council.
It didn't have that effect. While "pro-French" former President Gaston Tong Sang's party won 27 seats, former arch rivals, political survivor Gaston Flosse and pro-independence leader Oscar Temaru struck a deal and pooled their 30 combined seats to form the new government. It's a result that has displeased Paris immensely.
The French government had committed to support a five-year development plan for French Polynesia, worth over US$600 million. There is speculation now that this has been reigned in, with a leaner $431.8 million version focusing on social housing, health and disaster relief and preparedness.
Meanwhile, other regional powers, Australia, New Zealand and the United States, look to France to be a stabilizing influence in its dependencies. They have increased cooperation on disaster mitigation and response and fishing surveillance.
Sarkozy would do well to keep his eye on another dependency, New Caledonia, where substantial new investments in the nickel industry bodes well for the future, if properly managed. French Polynesia may be sucking up all the political oxygen in the "French" Pacific, but New Caledonia is where the economic action is.
9–Ma Ying-jeou
President of Taiwan
The Pacific Islands play a disproportionately large role in the foreign policy of Taiwan. The six regional nations that have diplomatic relations with Taipei–Palau, Marshall Islands, Solomon Islands, Nauru, Tuvalu and Kiribati– represent more than a quarter of all countries that recognize Taiwan. That reality gives these Pacific micro-states significant leverage, and an unusually high profile in Taiwan.
It is a reality that Taiwan's new president, Ma Ying-jeou, and his Kuomintang Party, must grapple with after he is sworn into office on May 20. There's also the lingering criticisms–some within Taiwan, others from regional powers such as Australia and Japan–about the impact of so-called "check book diplomacy "on small island states.
The "check book diplomacy" criticism is unfair–what nation isn't spending foreign aid dollars to make friends and increase influence, particularly in the developing world?–but it is a public relations reality that Ma must face.
Of course, the U.S.-educated Ma has bigger issues to deal with, namely Taiwan's testy relations with China. Ma's predecessor, Chen Shui-bian, gave Beijing's leaders a fit with his talk of "independence" and changing the name of the country from the Republic of China to Taiwan. The Chinese were usually quick to remind Taiwan's leaders, and anyone else who would listen, that it had over a thousand missiles aimed at Taiwan.
Ma has counselled a more moderate approach, but he's still at odds with Beijing over its essential claim that Taiwan is but a province of the People's Republic of China.
Ma's likely foreign policy initiatives in the Pacific will focus on holding on to Taiwan's friends. Taipei is extremely sensitive to the possibility of losing a regional ally. Senior Taiwan leaders were dispatched to the Solomon Islands and the Marshall Islands following recent elections. Majuro was a real worry, with some in the new government on record as saying the Marshalls should drop Taiwan and re-establish relations with Beijing. They've since kissed and made up.
And Taiwan this year will host the third Pacific Allies Summit, a now annual love fest between Taipei and its Pacific friends. That event will be Ma's chance to make clear how engaged his government will be in the islands. Given the consequences of the choices, we're betting Ma makes it clear Taiwan remains its allies' best friend.
10–Willie Tan
Chief Executive Officer, Tan Holdings
Willie Tan's Pacific commercial empire, centered on the family-owned Tan Holdings Corp., continues to go through a painful transition. Once dominated by its garment factories on Saipan-and a host of subsidiary firms developed to support those plants and its products-the company has been moving quickly into new areas, particularly tourism. The process has been rocky.
But as we noted last year, it isn't a wise business practice to bet against Willie Tan. His firm is reinventing itself as a Guam-focused enterprise. In fact, we wouldn't be surprised if the Tan Holdings headquarters, still on Saipan, is moved to Guam in the next few years.
How is the high-energy Tan reshaping his company? Tan Holdings last year acquired Dickerson and Quinn, a major regional distributor with top-tier product lines. He's also expanding in a big way the Tan Holdings fishing fleet in the Western Pacific. Luen Thai Fishing Venture is now a major Pacific player, and has a competitive advantage that few other fleets enjoy: its own freight airline to ship the fish to other major markets.
Tan is also increasingly spending more time in Hong Kong and China, where the family empire is still heavily vested in garment manufacturing. Last year, Tan launched a new firm that makes footwear, particularly sandals and slippers. It seems an unusual move until one realizes that he can now produce resort wear for sale in Tan Holdings hotels on Guam and Saipan, and have Tan Holdings logistics firms manage the shipping of the goods.
That's been the strength of Tan Holdings' approach to business opportunities: nearly all enterprises are supported by sister companies, a classic vertically integrated business development model. And Tan Holdings still has 16 affiliated companies in industries as diverse as real estate, logistics, media, hotels, air and sea freight and fishing.
While Willie Tan this year has slipped on the Power 10 ranking, we expect him to move back up in coming years as the Guam construction boom really takes off. Tan is poised to take full advantage of the boom, without competing directly with the even larger international firms that are pouring into Guam. As we've said before, don't bet against Willie Tan.
