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US-NZ Partnership Forum: Neo-liberalism - Pacific Style


Since the Labour government took power in 1999, neo-liberal reforms have been forced upon the Pacific Island Countries who make up the Pacific Islands Forum. Implementing this neo-colonial agenda is central to New Zealand, Australian and United States interest in the region. In this article Ryan Bodman analyses the implications of the neo-liberal agenda, "the Pacific, like many areas in the global south, is facing an onslaught of cut-throat neo-liberal agreements. The Australasian powers and the EU are in on the action and the US-NZ Partnership Forum, taking place in September 2007, expedites the arrival of the US to take its piece of the pie. If this agenda is allowed to reign supreme, it is more then likely that the Pacific, as we know it, will cease to exist."

According to the organizers, this year’s US-NZ Partnership Forum will in part focus on the, “potential for the United States and New Zealand to cooperate on … economic development and sustainability in the Asia Pacific region.” It will come as no surprise, considering that the two New Zealand representatives are Jim Bolger and Mike Moore, that this so called ‘economic development and sustainability’ is little more then a euphemism for neo-liberal, free market reforms.

The possibility of the US becoming further involved in the economies of Pacific Island Countries (PIC) is cause for concern, considering the affect the US has had on the economies of countries, not dissimilar to PICs, in the Caribbean. Concern for the PICs is further warranted as the Pacific currently buckles under the pressure of a neo-liberal assault on multiple fronts, in the form of Pacific Island Countries Trade Agreement (PICTA) exclusively for PICs, Pacific Agreement on Closer Economic Relations (PACER) with Australia and New Zealand and Economic Partnership Agreements (EPAs) with Europe.

To understand the affects of further US involvement in the Pacific, we must note the likely outcomes of the policies which the US champion and which are currently being implemented in the Pacific by their allies and subordinates. The three are as follows:

PICTA – Pacific Island Countries Trade Agreement
This agreement exists to establish the free trade of goods between Pacific Island countries. Countries that ratify the agreement must cut tariffs and restrictions to all goods by a predetermined time. In theory, this agreement will increase the efficiency of the island nations by eliminating unproductive businesses via increased competition and promoting successful businesses with access to new markets. It is easy to get carried away with this simplistic argument which is the basis of neo-liberalism. However this argument ignores the real world, the harsh realities of which are more often then not suffered by the lower classes.

In reality, PICTA will mean the loss of a major source of revenue to many island governments, many of which rely on tariffs for 20-70% of their income. Proponents of PICTA see this as a non-issue, encouraging island states to substitute the loss of income tariffs with Value Added Tax (seen in NZ as GST). However, tariffs tend to be highest on luxury goods commonly bought by the wealthy, while VAT would apply for all goods, including necessities. Thus, if these tariffs are replaced with VAT, the wealthy will be financially rewarded while the prices of everyday items will increase, leaving less money in the pockets of the general populous.

As highlighted above, a major component of neo-liberal reforms is the failure of inefficient business and the success of profitable business. In the short term, this means the loss of employment for many people and even assuming the promised benefits of more productive enterprises does eventuate, the strain on the subsistence economy and the government to meet the needs of the unemployed during the interim will be so great, many of the tiny economies of the Pacific nations will be unable to handle the pressure. Thus, a perfect recipe for an economic recession, and in turn, widespread suffering exists. These issues are just two of the many problems which will result following the fulfillment of PICTA principles. But compared to PACER, PICTA ‘tis but a flesh wound’, to Pacific development.

PACER – Pacific Agreement on Closer Economic Relations
The major component of the PACER agreement is that parties must begin to negotiate for the free trade of goods by 2011 at the latest. However, what makes PACER so concerning is the presence of Australia and New Zealand, the regional heavyweights.

Like PICTA, PACER will have a range of negative affects on the PICs however this will be exacerbated due to the new challenge of competing on an equal playing field with countries so disproportionately favoured to the free market ideals. Australia and New Zealand have strong comparatively diverse economies, access to large amounts of money and well-established infrastructure. Many of the PICs have few of the previous attributes and those which do, will stand little chance when the playing field is leveled.

Assuming that the country gets through the massive economic hardships (which will result as more tariff generated income is replaced by user-pays services, privatisations and VAT measures) without the rise of conflict, the promised employment which will result from the growth of the productive industries will likely prove to be little to write home about. Due to the excess of unemployed people, wages will be forced downwards and job stability affectively non-existent. Even if employment rises to the level prior to the agreement, (the chances of which, going by the results of previous free trade agreements, is practically non-existent) wages will be consistently driven down and jobs continuously discontinued as companies compete with other companies in a race to the bottom.

Another issue which will arise from the free trade deal under PACER is the destruction of the secondary and tertiary economic sectors in the PICs. These industries will be unable to compete with their comparatively larger equivalence in Australia and New Zealand. They will be out competed, forcing the few PICs that have started to thrive in the secondary and tertiary sectors back into the primary sector. Not only will this result in less income for exports, but the PICs will be extremely dependent on world commodity prices. This will result in an unstable economy where the country’s economic wellbeing will be decided by abstract forces in the world’s stock exchange. The emphasis on the primary sector will also increase the demand for land. In turn, ancestral land will quickly change hands from ancestral lineage to big business interests.

Other free trade agreements have highlighted how ancestral ownership means little when economic progress is at stake. Land will be individualized, exorbitant prices offered and the land which is so instrumental to Pacific cultures will change hands. This however is the best possible outcome under free trade legislation, as many precedents exist where abusive legislation or simple coercion is used to free up the land for business interests.

As you can see, the affects of PICTA and PACER in their current form will be devastating and long lasting. However, the above are based on the very unlikely scenario that PICTA and PACER will remain restricted to the trade in goods. It is likely that in time, services will be included in the free market agreements in the region, the affects of which are too numerous to mention here. One thing is for certain based on the affects of other agreements which have liberalised services, and that is that wages will decrease, prices will increase and the quality of services such as education, healthcare and utilities will be dramatically damaged.

Unfortunately time is not on the Pacific’s side. As I write this another agreement, this one with the European Union, is being negotiated.

EPAs – Economic Partnership Agreements
Since the 70s, due to colonial related guilt, the EU has given preference in their market to exported goods from Africa, the Caribbean and the Pacific (ACP) via the Lomé agreement. However the US won a ruling at the WTO which stated that this agreement discriminated against exporters from other countries and therefore had to be stopped. To replace it, the EU is negotiating with the three different regions to establish EPAs.

The negotiations are dictated by an agreement in 2000 called the Cotonou agreement. This agreement uses lots of colourful language and emphasises that the major aim of the EPAs are to reduce and eventually eradicate poverty consistent with the objectives of sustainable development and the gradual integration of ACP countries into the world economy. Of course, the very idea that the continent made famous for its butter mountains could care less for the developing world is a joke.

Currently, under funded Pacific diplomats have to compete with the armies of lawyers that the EU employ, in an attempt to include a development focus in the EPAs. It is unlikely that a deal will be reached by the end of the year and it is becoming more likely that any agreement that is signed will act at best, as lip service to real economic development.

It is also interesting to note that the EU is unconcerned with the agreement with the Pacific (focusing most of their energy on Africa) as so little trade is done between the two regions. It is therefore likely that the affects of the EPAs on the PICs will not be as significant as the affects of PACER. However, the EPAs remain extremely relevant in the local context. The reason for this is that the PACER agreement promises member states that the deal they sign amongst each other will be at least as extensive as deals with other bodies. Therefore, the negotiations for the EPAs will set a benchmark for future PACER discussions.

As the examples above exemplify, the Pacific, like many areas in the global south, is facing an onslaught of cut-throat neo-liberal agreements. The Australasian powers and the EU are in on the action and the US-NZ partnership forum, taking place in September 2007, expedites the arrival of the US to take its piece of the pie. If this agenda is allowed to reign supreme, it is more then likely that the Pacific, as we know it, will cease to exist.

Jane Kelsey, A People’s Guide to PACER, 2004.
Waden Narsey, PICTA, PACER and the EPAs: Where are we going?, 2007.
Oxfam, Blood from a Stone, 2005.
Oxfam, Vanuatu: The 2006 Land Summit, 2006.
Oxfam, Weighing the Options, 2007.


Re: US-NZ Partnership Forum: Neo-liberalism - Pacific Style

The neo-liberal Labour government took power in 1984, not 1999. I have corrected this in the article.

Keep up the fight against commodification. Kia kaha koutou.

Re: US-NZ Partnership Forum: Neo-liberalism - Pacific Style

I think that you would want to change it back unless the author has said otherwise. My understanding is the current Labour government elected in 1999 is committed to neo-liberal policies.

It is particularly slavish about pursuing a neo-liberal free-trade agenda. I think that was the author's point.

Re: Re: US-NZ Partnership Forum: Neo-liberalism - Pacific Style

Kia ora ano

I was confusing 1999 with 1989 (which was a year before National took power). My mistake.


Re: US-NZ Partnership Forum: Neo-liberalism - Pacific Style

ps thanx to the indy crew for putting this and other articles up. :) - John A.

Re: US-NZ Partnership Forum: Neo-liberalism - Pacific Style

"My understanding is the current Labour government elected in 1999 is committed to neo-liberal policies. It is particularly slavish about pursuing a neo-liberal free-trade agenda. I think that was the author's point."

Exactly so. Thats why I put 1999 in the intro to Ryan's article. No worries, I just changed it back.

Re: US-NZ Partnership Forum: Neo-liberalism - Pacific Style

Gareth Hall (a Sports Presenter on WIN News Australia) is a narrow-minded racist. He is a pathetic Australian scum who deserves nothing from WIN TV. Gareth Hall should be doing hard labour work instead of having an easy upper-class white job as he degrades anyone who is not white. He said that "Maori people are lazy gutter-trash" and yet he himself is a lazy Australian racist who gets everything handed to him. Gareth Hall, if you are ever in Mildura you better watch how you approach polynesian people there because they all know and hate you. You have degraded them so much that you made the point that they are beneath you. At least they have culture and speak correct English. What have you got??? You are a Sports Presenter and you cannot even pronounce words properly, and your grammar is weak. You are a Sports Reader. Wow. That's something that will benefit Australia. Reports on sports. SPORTS!!! What's more productive, hard labour work, or reporting on useless shit such as sport??? By the way Gareth Hall, have you realized that Mildura is increasingly becoming more Polynesian??? Not to mention other ethnic minorities that are also increasing such as the Turks, Iraqis, and Asians. You've done it now you jungli. Yes WIN News Gareth Hall, you are a jungli!!!!!!

The New Pacific Wall: The U.S., Australia, an d New Zealand Isol

By Andre Vltchek

The big three, the U.S., Australia, and New Zealand, have divided thePacific island territories. New Zealand now controls Polynesia,
Australia is “in charge of” Melanesia (including the plundering of natural resources by its multinationals in Papua New Guinea), and the
U.S. has a firm grip on Micronesia. Andre Vltchek considers the consequences for the people of the island nations.

It is late at night and the coastal road between Apia (the capital of Samoa) and Faleolo International Airport is busy with traffic. Tonightis a big night: a Boeing 767 will arrive from Los Angeles and make a brief stop in Samoa before continuing to the Kingdom of Tonga and
Auckland. This weekly flight is a lifeline for this tiny nation of 180,000 people, separated from the rest of the world by thousands of miles of ocean.

The closest supermarket is a four-hour flight away in New Zealand. So are the nearest bookstores and well-equipped medical facilities. Air New Zealand, which flies between Auckland and Samoa four times a weekand between Samoa and Los Angeles once a week, is the lifeline of this nation, which is fully dependent on the rest of the world for foreign aid, job opportunities, education, medical care, and essential know-how. It takes Samoan immigrants to New Zealand, reunites
families, brings gravely ill people to the hospital, shuttles government officials to foreign destinations, and brings food, medicine and perishable goods.

With foreign aid and remittances amounting to more than 50 percent of Samoan GDP, independence is a lofty and sweet word, but little more.

In fact, most Pacific Island countries (Polynesia, Melanesia, and Micronesia) opted for full or limited independence at some point after World War II. Colonialism here, mainly by France, the UK, the U.S., Germany, Japan, Australia, and New Zealand, had not been as brutal as in most other parts of the world, but it left a legacy of dependency and confusion.

Some countries are hopelessly bankrupt (like Nauru); others are literally sinking as a result of global climate change. There is almost no regional unity and no attempt at integration. Financial dependency means that three major players—the U.S., Australia, and New Zealand—can exercise full control over the foreign policy and trade of their tiny and vulnerable client-states.

Foreign Policy of the Pacific Islands? Ask Washington or Canberra

“One day I had an entire television crew from Israel parked at my office,” remembers Francis X. Hezel, head of Micronesian Seminar and a leading expert on the islands. “I had no idea what were they doing here. Why would they travel so far, to such a small and insignificant country? Finally I understood: the Israeli public was fascinated with
this place; they wanted to know ‘who are those people who keep voting in the U.N. against Security Council resolutions, supporting Israel
and the United States against the entire world . . .’”

Pacific Island votes at the UN are openly for sale and it is often an extremely dirty business. Although several countries in the region are
disappearing as a result of global warming, both Nauru and Kiribati voted against the Kyoto Protocol.

For several tiny nations, it became profitable to play the Taiwanese card. Quoting local government jargon, Pacific island nations “go either with Taiwan or the People’s Republic of China.” Palau, for instance, recognizes Taiwan, receiving substantial help and investment from Taipei.

The Taiwan (ROC) Embassy in Honiara (the capital of the Solomon Islands) has been heavily criticized for meddling in domestic politics, which included actually fielding and supporting candidates for the April 2006 elections. Taiwanese government officials have also been accused of bribing political leaders in both Kiribati and the
Marshall Islands.

There is hardly a country anywhere that is more dependent on foreign power than the Republic of the Marshall Islands. With just 60,000 inhabitants, it receives $30 million a year from land leases and other payments connected with the U.S. missile project on Kwajalein Atoll. A 15-year “Compact” guarantees this tiny nation more than $1 billion.

The effects on the environment, health, and culture, however, have been devastating. After World War II, the U.S. occupied the Marshall
Islands and began atomic bomb experiments on the small atolls of
Bikini and Eniwetok, while Kwajalein Atoll was later targeted as a site for transcontinental missile testing. Many islanders died from
radiation-related illnesses, while others developed serious health problems, some of which have been passed on to a new generation. There
are accusations that local people were used as test subjects for monitoring radiation’s long-term effect on humans.

Many residents were forced to leave the islands and most of the victims were relocated to the main atoll, Mjuro. The U.S. Congress allocated $240 million to compensate victims of nuclear testing on condition that they agree to drop all future lawsuits against the U.S. government. Since then, more evidence has surfaced documenting the
devastating impact of nuclear experiments on human health.

Economic Dependence

Despite substantial cash injection, the people of the Marshall Islands have never managed to build a sustainable economy. Experiments, missile testing, relocation of many islanders, and finally the
introduction of a different culture based on corporate values have wrought havoc with the life of the once peaceful and self-sufficient
archipelago. Many men and women are unemployed, their health damaged by nuclear testing and their culture in shambles.

More than 60 percent of the Marshall Islands’ GDP comes from U.S. handouts. Instead of finding their own way forward, Marshall Islanders rely on leasing their land and territorial waters to others. In the 1990s the government flirted with the idea of accepting nuclear waste
from several Asian countries, including Japan, South Korea, and Taiwan, before a great outcry from people who already suffered the largest numbers of nuclear-related diseases anywhere in the world killed the project.

The U.S. Department of State describes Palau as a “constitutional republic in association with the United States,” since gaining its “independence” in 1994. [1] Its economy remains heavily dependent upon U.S. aid. The 50-year “Compact of Free Association with the U.S.” entitles Palau to $450 million in funding until 2008, but much more
money is flowing in through various U.S. grants and foreign aid from other countries, particularly Japan, which ruled the archipelago before and during World War II.

Before the Compact was signed, there was a lot of U.S. arm-twisting. There were eight heated referenda, each failing to obtain the 75
percent approval required to override the Constitution’s anti-nuclear provision. Finally, the pro-Compact government amended the Palau
Constitution, allowing the Compact to be ratified by a simple majority vote. [2] The essence of the Compact is that in exchange for a large cash infusion, Palau gives the U.S. unlimited rights to build military bases. The Palau Constitution is anti-nuclear and it is known that
large U.S. military ships are either nuclear-powered, carry nuclear
weapons, or both. The U.S. refused to give any assurances that its ships would be nuclear-free and the government of Palau finally opted
for a “don’t ask, don’t tell” policy. No military base has yet been built in Palau, but the possibility of future bases makes many
citizens of this idyllic archipelago profoundly uncomfortable.

“For the U.S., the most important factor behind the Compact was so-called ‘strategic denial’ for Soviet ships,” explains Francis X.
Hezel. “FSM covers an enormous ocean area and by signing the Compact, the entire territory became a no-go area for ships from those countries that the U.S. considered hostile to its interests.
Ironically, the Compact was implemented just a few years before the end of the Cold War.”

The economy of Palau, as for the entire Federated States of Micronesia (FSM), is largely dependent on the U.S. handouts. Compact money amounted to more than 1.3 billion dollars, not including tens of millions of dollars in grants and aid programs. Even after the expiry of the Compact, the agreement and financial package were renegotiated,
with less favorable terms for the entire FSM. [3]

Isaac Soaladaob, director of the Bureau of Foreign Affairs of Palau, barely hides his bitterness: “As you are aware of, we were colonized by Spain, Germany, Japan, and the United States. De-classified documents we can now access clearly show that the U.S. was out to Americanize the entire Micronesia. They wanted to change our culture. Before the Japanese occupation, there was no concept of private
property or ownership; we had our own traditional societies that were based on collectivism. But that type of society was not conducive to
the capitalist system that the U.S. wanted to implement. We were fooled so many times . . . We wanted to be nuclear-free, because we knew that the Enola Gay left for Hiroshima from this part of the world—from Saipan.

“We also saw the devastation to the Marshall Islands—we saw what happened to our Micronesian brothers—where nuclear tests had been performed. But we negotiated with the U.S.—it was during the Cold War, after all, and we were told that ‘We have to be protected.’ People here were indoctrinated. Of course, there was not one Communist around here and people here had no idea what was happening in Russia, but they were petrified of Communists. In those days we had almost no visitors from abroad and we were not allowed to travel. In the early 1950s we could only travel to the United States.

We never realized that in reality our traditional culture was much closer to communism than to capitalism . . . We were colonized and thoroughly brainwashed. Then you know what happened during the vote; all that arm-twisting . . . I know because I was the chair of the constitutional amendment. And now, after all that, this government considers the U.S., Japan, Australia, and Taiwan to be our best friends: in that order. We even have our men in Afghanistan now, and
in Iraq. Our people are easily fooled. They learned that it is easiest to be associated with the strongest. They are even proud of their
position . . . Oh, Bush said he is grateful to Palau.”

Palau is not the only country in the region that sent troops to Afghanistan and Iraq. American Samoa, the U.S. territory, has a disproportionately high number of men who were killed in the Middle
East wars. The Samoan Observer, a daily newspaper in independent Samoa, is running U.S. Army recruitment ads, trying to recruit Samoans
who hold dual citizenship. Fiji is exporting its soldiers to conflicts all over the world, from UN-sponsored operations to mercenary adventures.

Control of Movement

Control over foreign policy of the Pacific nations is taken for granted. But the U.S., Australia, and New Zealand also have almost unlimited control over who is on the move and who encounters whom.
Foreign immigration and customs officers can interrogate passengers about the purpose of their journey, check their luggage, and deny
their transit.

If Samoan or Tongan citizens want to visit Papua New Guinea (PNG), they have to fly to Australia and then to Port Moresby from Brisbane. Due to the scarcity of flights, passengers often have to travel through both Auckland and Brisbane. In order to do that, it is necessary to obtain an Australian transit visa if the transit time is
more than eight hours. But even this eight hour transit visa waiver is rarely respected: airlines often deny boarding to Australian transit
points to people from the Pacific Island countries and from other developing countries that are not in possession of Australian transit
visas, according to numerous personal testimonies. To visit any of the countries in Micronesia requires a U.S. transit visa to change planes
in Hawaii or Guam.

The United States has a small embassy in Apia, Samoa, but it is not authorized to issue visas. A Samoan citizen has to first apply for a New Zealand visa (not easy to obtain), then pay around $500 for tickets to New Zealand, then apply for a U.S. transit visa, wait for the interview, pay a non-refundable deposit, then wait for the highly
unlikely positive outcome in order to travel within the region.

Both Australia and New Zealand are now adopting the U.S. approach to transit passengers. Even those who remain in the transit area at New Zealand airports now require transit visas. Immigration officers at the U.S., Australian, and New Zealand gateways are tough and uncompromising. Recently, the prime minister of Papua New Guinea
decided to fly on a regular airline during an official visit to Australia and was forced to take off his shoes at the Brisbane airport, an incident that triggered a diplomatic stand-off between two
neighboring countries.

While average citizens find it extremely difficult to get U.S., Australian, and New Zealand transit visas to visit neighboring countries, even government officials, diplomats, and UN officials
encounter discrimination and harassment. In July 2005 the newly appointed head of UNESCO in the Pacific, Visesio Pongi, was asked to
accompany the director general of UNESCO, Koichiro Matsuura, on his official visit to Palau, the Federated States of Micronesia (FSM), and
the Marshall Islands.

To reach Palau, Pongi had to travel from Samoa to Brisbane, then to Cairns and Guam before arriving in Palau. At Cairns, he was denied boarding because he did not have a U.S. transit visa. Eventually he was re-routed via Tokyo, as Japan does not require a transit visa to change planes. But in Tokyo he was again prevented from boarding his flight to Palau, as he would have to change planes in Guam. He tried to argue that he was a high-ranking UN diplomat, required to accompany
the head of UNESCO, but U.S. regulations were unbending. He was loaded on the last flight from Tokyo to Sydney and from there had to travel
back to Samoa via Fiji.

Other officials in the Pacific have similar stories. Shaukat Hakim, a Pakistani administrator of the UNESCO office in Apia, recalls, “Once I
had to fly from Dubai to Apia via Singapore and Auckland, but was denied boarding as my plane was supposed to make a short stop in
Sydney and I didn’t have an Australian transit visa. Before, holders of U.N. diplomatic passports (Laissez Passer) were not required to apply for transit visas in Australia and New Zealand, but lately, everything has become more difficult.”

Mali Voi, a UNESCO cultural expert in Apia, holds a national passport of PNG, as well as a UN diplomatic passport. “I never travel through
the U.S. since 1999 when I had to fly to Paris Headquarters via Los Angeles. In LA they checked my luggage, despite the fact that I was just transiting. I had to take my shoes off. At one point I felt very scared. They thought that I was Ethiopian. They didn’t care that I had the UN passport, they treated me badly. Since then I fly to Paris through Asia.”

“Everything changed after 9-11,” Voi continues, “but I don’t think it is about security; it is about control. Australia and New Zealand
changed their regulations dramatically so that now one needs visas to enter the Pacific territories. It makes networking in this part of the
world very difficult.

“Many people in the Pacific still feel allegiance to the U.S.,” says Voi. “In some parts we saw Americans as liberators. But that’s changing. They definitely lost my vote. And Australia and New Zealand are playing into U.S. hands. I see it all as a new form of colonialism
. . . Australia, for instance, is trying to reaffirm its position in the Pacific. I really see this triangle—the U.S., Australia, and New
Zealand—as a main stumbling block for the rest of the countries in this part of the world.”

Travel regulations are just one problem which the citizens of Pacific nations have to face, but it is a serious one, amounting to something
that can easily be described as a New Pacific Wall. The U.S., Australia, and New Zealand are effectively isolating small and poor
countries of the Pacific from each other, as well as from the rest of the world. It is almost impossible for the citizens of most of the
Southeast Asian nations (including the Philippines and Indonesia) to visit their neighbors in Polynesia, Micronesia, and Melanesia, as the
same transit visa requirements would apply to their citizens as well (the US and New Zealand transit visas, or Australian transit visa if
the time needed to change planes is over 8 hours).

New visa regulations effectively deprive many of the most logical routes between Southeast Asia and South America. Indonesian citizens
don’t need a visa to go to Peru or Chile, but in order to catch the Lan Chile flight from Sydney via Auckland to Santiago, Chile, they need a New Zealand transit visa even if they do not plan to leave the airport.

Samoa, divided between so-called American Samoa (the U.S. territory) and the Independent State of Samoa (previously known as Western Samoa)
can’t count on a free flow of people between its isles anymore. Recent regulations require citizens of Samoa to apply for special permits to
enter the U.S. territory of American Samoa. On 18 October 2006, the entire 27-member National University of Samoa (NUS) rugby team was
detained at Fagatogo Harbour in American Samoa and subsequently deported for not having necessary permits to enter the territory, according to the Samoan Observer.

But the situation gets even more Kafkaesque. Citizens of the Federated States of Micronesia (FSM) who wish to travel from the island of Yap
to their capital city, on the island of Phonpei, have no other choice than to fly with Continental Micronesia, a U.S. carrier, which makes a
stop in Guam. Consequently, people of FSM have to go through U.S. immigration and customs. They are questioned and risk refusal to
travel within their own territory. Continental Micronesia is the sole carrier between FSM, Palau, and the Marshall Islands.

Regional airlines are collapsing one after another, as was recently the case with the national carrier of Palau and Polynesian of Samoa,
which was forced to enter into a joint-venture with the Australian low-cost carrier Virgin Blue, changing its name to Poly Blue.
Polynesian Airlines itself was reduced to just a few inter-island routes. Air Nauru (the only direct carrier between Micronesia and Melanesia), which collapsed earlier this year, is now operating on an extremely limited budget, drastically reducing its routes. Several
regional carriers, including Air Niughini and Air Vanuatu, are partially owned by Australian Qantas, operating almost exclusively profitable routes which bring tourists and foreign experts to these
countries but do not necessarily contribute to integration of the region.

The smallest self-governed nation in the world, Niue, can count on only one weekly flight from Auckland. The only large, full-service
airline in the region is Fiji-based Air Pacific, with direct flights to the U.S. and Japan. It serves several Pacific destinations
including Kiribati, Samoa, the Kingdom of Tonga, and Vanuatu, but prices are exorbitant and connecting times inconvenient.

The big three (the U.S., Australia, and New Zealand) have managed to divide the Pacific. New Zealand now controls Polynesia, Australia is
“in charge of” Melanesia (including the plundering of natural resources by its multi-nationals in PNG), and the U.S. has a firm grip on Micronesia.

With Pacific countries weak and dependent on their minders, integration is at best a distant dream. High costs of travel between Pacific nations, as well as new transit visa regulations in New
Zealand and Australia, add to the fragmentation. There is almost no direct contact among the citizens of Pacific nations. The few sporting
and cultural events can hardly fill the gap. If citizens of Polynesia, Melanesia, and Micronesia travel at all, they go to the cities of the
powerful, almost never to visit their neighbors.

Inter-Pacific cultural and economic ties are being replaced by ties with the U.S., Australia, and New Zealand. An average citizen of Samoa knows much more about life in Auckland than about life in Micronesia and Melanesia. Those living in Palau are fluent in cultural nuances and opportunities in the United States, while Melanesia and Polynesia is for them just an enormous, remote, and sparsely inhabited area of the South Pacific.

On the governmental level, there is a certain will to pursue integration of the region, the most significant attempt being the Pacific Plan approved by the leaders of the Pacific Island countries in Papua New Guinea in October 2005. But most of the governments are weak and financially dependent on the big three regional powers,
relying on expertise and know-how from the very countries they should be seeking independence from.

While Micronesian nations are securing cash through direct agreements with the United States by offering the military unlimited access to
their territories, other nations of the South Pacific are opting for different types of dependency. Family-designated “breadwinners” are
going abroad in search of jobs to support large families back home. In
2002 the Kingdom of Tonga received an astonishing $65.2 million in remittances, Samoa $57.9 million, and the Cook Islands $53 million (according to Asian Development Bank statistics). This creates an unprecedented brain drain. Niue lost 90 percent of its population to accelerating emigration—while Niue presently has 1,700 inhabitants, 18,500 Niueans live in New Zealand and 3,000 in Australia.

Despite nationalistic rhetoric trumpeted by many governments in the region, there is not much hope left in the Pacific. People with skills
and education are leaving, unemployment is extremely high, the standard of living (most notably in Fiji) is declining, and so is
health (mostly due to changes in lifestyle and cheap, low-quality food imports).

Creation of this New Pacific Wall has fragmented this enormous area of the Pacific, once inhabited by diverse but historically intertwined
cultures. There is an acute need for Pacific island nations to create a strong and united bloc able to negotiate with the rest of the world
with one voice. Only such a bloc could effectively address economic, social, transportation, educational, and political problems
confronting the entire region.

Such a regional approach appears to be exactly what the U.S., Australia, and New Zealand find contrary to their geopolitical interests. But Pacific Islanders have no choice but to look to
regional solutions or continue in a dependent and humiliating position. Rather than seeking more aid, their best prospect lies in constructing their own common regional home.



Andre Vltchek is a novelist, political analyst, filmmaker, and co-founder of Mainstay Press,a new publishing house for political
fiction. His latest books include a political novel, Point of No return, and a collection of political essays, Western Terror: From Potosi to Baghdad. He presently works in Southeast Asia and the South Pacific and can be reached at

This is an expanded and revised version of an article that appeared in the October issue of Z Magazine. Posted at Japan Focus on October 7, 2006.