By A.A. Smyser
Tuesday, May 14, 1996
But Bancorp Hawaii sees the islands as areas of opportunity. It operates in 16 of the 21 island economies outside Hawaii. Its Pacific headquarters is in Guam.
Outside money is flowing into the island economies from both France and Asia. Now that France has ended Pacific nuclear testing, it has committed to a 10-year program to build infrastructure in French Polynesia, of which Tahiti is the capital. It intends to build an economic foundation that will leave the economy as strong as the nuclear testing funds made it. Tourism will be a key.
France also will be helping New Caledonia, where the economy is based on nickel mining. French Polynesia and New Caledonia already have respective per capita gross products of around $15,000 and $14,000 compared to a low of $800 in giant Papua New Guinea.
The comparable per capita gross product figure for Hawaii is $27,700.
Bank of Hawaii's economics department divides the Pacific islands into two groupings. There are six U.S. dollar economies outside Hawaii. These are Guam, Americam Samoa, the Northern Marianas, the Marshall and Palau republics, and the Federated States of Micronesia. They have a combined population of 435,000, a gross product of $4.3 billion and a per capita product of $10,000.
The 15 non-dollar economies have a combined population of 6.4 million, a gross product of $15 billion, and a per capita product averaging $2,340 when you include the French area highs and the PNG low.
The gross product for the island areas combined is $19.3 billion. That is smaller than Hawaii's $32.8 billion, but still significant and with growth potential.
Japan has a new auto parts plant in Western Samoa, where labor is cheap. It employs 3,000. Tonga is selling squash to China, which says it would welcome four times what it's buying. Vanuatu is selling beef to Japan.
Fiji has become an inner Pacific hub as Guam has become a hub for Asia. Tourism is growing in the region. Just about all of its islands are attractive and have more tourism potential.
The island economies also look to realize more income from the 200-mile economic zones they now control all around them under the new United Nations Convention on Law of the Sea. They already are selling fishing rights. Rights to mine ocean bottom minerals should pay off for some in the long term.
Hawaii in the past has played a special role in relation to the islands. Many of their leaders have been educated at the University of Hawaii or participated in programs of the East-West Center. Brigham Young University-Hawaii has a substantial enrollment of island students.
GOVS. George Ariyoshi and John Waihee actively promoted a Hawaii leadership and assistance role with the islands. Waihee instructed his first director of international relations to make the islands a top priority. Governor Cayetano is far from slamming a door on an official state relationship with the islands but he is giving them much less emphasis than his predecessors.
That does not, however, sever Hawaii educational links with the islands. The Pacific island studies program at UH remains a top U.S. source of information about the islands. Hawaii Public Radio is a consistent source of Pacific island news.
Matson Navigation Co., Grand Pacific Life and Servco are Hawaii corporations with fingers in the inner Pacific waters. Our big inner Pacific operator, Bancorp Hawaii, thinks there is opportunity for more.