[asia-apec 572] GATT Watchdog on South Pacific Forum

[Gatt Watchdog]

GATT Watchdog
PO Box 1905
Christchurch 8015
Aotearoa (New Zealand)

Media Release For Immediate Use

24 August 1998

South Pacific Forum Agenda Spells Disaster For New Zealand's
Neighbours


This week's South Pacific Forum in the Federated States of
Micronesia (FSM) is promoting a model of development which is
already having disastrous consequences for New Zealand's small
Pacific neighbours, says fair trade coalition GATT Watchdog.  The
group is also criticising New Zealand's role in imposing a free
market economic model in the Pacific.

"The South Pacific Forum provides yet another opportunity to goad
Pacific peoples and governments into getting "their house in
order" according to a kitset model of export-oriented,
market-driven growth and a narrow set of economic theories which
hold that economic growth is the be-all and end-all of
development," says Aziz Choudry, a GATT Watchdog spokesperson.

Mr Choudry has just returned from attending the Fourth NGO (non
governmental organisation) Parallel Forum held in Pohnpei, FSM,
prior to the official meetings, where he gave a talk on APEC and
the Pacific Islands.  The Heads of Government meeting began today
and runs until 26 August.

"Forum Leaders and Ministers meetings 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 World
Trade Organisation and APEC (which only a minority of Pacific
Island nations have joined), and 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," said Mr Choudry.

"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 a
source for cheap raw materials.  The latest economic blueprint for
the region sees Forum Island Countries having little input into
the development of macroeconomic policies which they are supposed
to accept."

In Madang in 1995, South Pacific Forum Leaders endorsed the APEC
non-binding investment principles.  A report of the progress and
implementation of these investment policies is to be completed by
the end of this year.  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".  Last month's
FEMM in Nadi, attended by Winston Peters, exhorted Forum members
to implement "domestic measures consistent with WTO and APEC
principles and obligations."

"Moves to push Forum Island Countries 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 the FSM where
55% of people are engaged in the subsistence economy - the figure
may be as high as 85% in Papua New Guinea."

"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 many cases, in 70-90% of official aid returning to
donor countries like Japan, Australia and New Zealand in the form
of education, consultants, and technical services, creating
lucrative investment opportunities and new markets for goods and
services.  And they ignore the vulnerability of small, exposed
nations to the vagaries of unregulated markets."

"Forced dependency on imports has had dire consequences for small
Pacific Island farmers, unable to compete with lower priced
products from overseas.  While Pacific Island countries are told
to export more to earn more foreign exchange and pay back loans to
multilateral financial institutions like the World Bank and the
Asian Development Bank, commodity prices on the world market have
plummetted, and the floods of overseas goods and services into
these small nations continues unabated."

"This year's Forum theme, "From Reform to Growth: The Private
Sector and Investment as the Keys to Prosperity" says it all.  A
key "practical impediment" to rendering Forum Island Countries
attractive to investors is the strength of traditional land tenure
systems.  There is fierce resistance to attempts to reform these
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", massive popular opposition to a World Bank-driven
programme to register customary title forced the defeat of the
government's proposed Land Mobilisation Bill designed to attract
foreign investment.  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."

"The New Zealand Government has long portrayed itself as a
concerned friend of the Pacific.  That claim needs to be closely
examined as it promotes the key features of "the New Zealand
Experiment" which has been tried, tested, and has failed to
benefit the majority of us.  Especially concerning is the way in
which commitments of NZODA to Pacific Island nations are being
made conditional on the willingness and speed with which
governments adopt economic reforms in line with the New Zealand
Government's extremist free market prescriptions."

"The government is mischievously marketing the New Zealand reforms
as a model for Pacific Island governments to emulate.  For
example, next month an FSM government delegation comes here on a
study tour to look at New Zealand public sector reforms," he said.

"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.  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."

Neither Jenny Shipley nor John Howard will attend this week's
Forum for domestic political reasons.  "It is rather ironic that
Mrs Shipley's non-attendance would appear to have mcuh to do with
the shambles that has engulfed the Coalition Government over the
economic reforms and further asset sales - supposedly triggered by
disagreement over the sale of Wellington Airport".