Archive for the ‘Pacific Islands’ Category

Fiji’s Denarau Island – a high-performing cluster

August 17, 2010

Some of the Cockatoo team recently spent a week on Denarau Island (Fiji), the biggest integrated tourism resort in the southern hemisphere. It’s about 5km from Nadi on the west coast, and the ‘island’ is separated from the mainland by a muddy 30 metre wide creek.

Critics say it’s an enclave for the rich, and not typical of the real Fiji. Well this is not entirely true, because it and other resorts are now core parts of the local economy, and a large proportion of the local population is inextricably linked to them.  

Indeed, Denarau Island is a true cluster. We reckon it rates at around 78% on the Cluster ScoreCard®, a technique that the Cockatoo Network has developed to measure and compare clusters in different industries and countries. Outlined below is our preliminary assessment, based on the 10 criteria (note – the criteria are weighted, which is why they don’t add to 78%)

Social capital – The social system is quite harmonious. The Indian population, mainly Hindu, dates back 100 years and is critical to the functioning of the economy. The Fijiian population, some 55% of the population, is mainly Methodist. The various churches continue to play an important role in the social development of Fiji. The local press toes the government line, sensitive to the Bainimarama dictatorship. Despite the concerns of the Australian and NZ governments about the trashing of democracy, the locals happily go about their daily life – in actual fact, the cheeriness and politeness of the native Fijiians is a defining feature, and the Indo-Fijiians aren’t far behind. Rugby and soccer help provide social glue. 9/10.

Local champions – while the initial champions of Denarau Island are not in evidence, it’s the Nadi residents and workers who actively champion the resort. Thousands of Australian and NZ families also provide word-of-mouth testimonials. 8/10.                        

Critical mass of suppliers – the labour supply to the tourism resorts is HUGE. For example, the Sheraton/Westin operation employs 900 staff, most of whom work 32 hours/week. This equates to 1.2 staff per room. Virtually all resort staff is Fijiian – while the resort manager explained that the Indo-Fijiians worked in back office jobs because ‘they are good with figures’, there is surely an unwritten code in operation. In terms of other supplies, fruit and vegetables are supplied by local growers, and meat and dairy goods are mostly imported from Australia and NZ. Land, even outside the development zones, is relatively expensive. Inbound tourist operators, hire cars, taxis, buses, restaurants are extensive. The suppliers of airline services are critical e.g.  cheap flights offered by Virgin Blue have stimulated tourism traffic. 9/10.

Governance structures – each resort appears to have a well-structured management system, and a wider group meets to decide with the local council on issues affecting all resorts. The national government does not appear to interfere. Things tick along pretty well, although NZ investors in strata titles at one resort are currently hurting allegedly due to slick advertising by a third party. 9/10.

Specialised infrastructure – there is a quality golf course, and a Marina/shopping and dining precinct hosts some 30 businesses. Nadi Airport provides the critical trigger – the NZ Government funded its construction during World War II as a base for the US Air Force. The site was one of the few pieces of flat land. 9/10.

Technology/knowledge formation – the secondary school system is quite good, and the Denerau Island resorts recruit their staff from the secondary schools and then train them up e.g. cookery, building maintenance, administration, environmental management. A strengthened role for multinational resort companies in training local staff and nurturing Fiji’s future leaders is much under-appreciated, and the Cockatoo Network’s Sunrise Program proposes initiatives in this field. 8/10.

Local competition – the biggest resort on Denarau Island is the US-owned Complex property Sheraton & Westin with a combined 700 rooms/villas, plus the US-owned Hilton, Radisson and Trendwest, plus the French-owned Sofitel. The competition stretches to the 50 resorts across Fiji’s two main islands, but particularly to the 30 or so from Nadi to the Coral Coast that feed off the proximity to Nadi Airport. 9/10

Sophisticated home demand – the resorts are outside the reach of most locals, hence this has not nor will be a major factor in its development. 3/10.            

Growth prospects – strong upside still exists. The Westin resort was running at 75% occupancy in July 2010, which is good given the current global tourism market. Denarau Island itself has further land for development. Future tourism growth in the Fiji market is uncertain, although the Fijiian Government has devalued its currency to maintain its competitiveness, and is currently courting Asian investors and tourists. This is a legitimate response to Fiji’s cool political relations with its neighbours, and an effort to broaden its economic relationships. 7/10.

Existence of threat – this criterion is important for some clusters in terms of creating a ‘call to arms’. There are no major threats to Denarau Island. Traditionally the major threat to such tourism ventures are escalating airfares. However this is not an issue given the very competitive airfares currently available.  Political risk is also minimal because tourism revenues are critically important to addressing Fiji’s chronic trade imbalance. The Bainimarama dictatorship does not appear to be a threat to the ongoing operation of the resorts. The main threats are nature-based i.e. cyclones, floods, tsunamis. 5/10.

If you’d like your cluster assessed, please contact us! Go to

Helen Hughes’ strong critique of Pacific aid

July 4, 2010

Because of (or despite) her huge experience (she is 80+ years old), Emeritus Professor Helen Hughes has launched a stinging critique of efforts to address poverty, poor health and education levels in the South Pacific. Her latest views, consistent with her longstanding analysis, include:

  • Living standards in villages are worse than when the first Europeans arrived. All measures of development have deteriorated. Independence sowed the seeds of the Pacific nations’ demise because aid flows per capita became the highest to any developing region.
  • By the 1990s, MPs and senior public servants were appropriating all the gains – disproportionate shares of aid went to pay Western expatriates and the rest was absorbed by the urban elites.
  • Egregious corruption became the norm, mirrored by high crime and rural violence.
  • Once it was obvious that aid agencies were central to Pacific economic stagnation and political collapse, Alexander Downer, then Australian foreign affairs minister, sought to push AusAID back to the growth policies that had led to the remarkable economic-social development of East Asia.
  • The World Bank, ADB, UNDP and other multilateral & bilateral aid agencies have failed to persuade Pacific politicians to make the decisions essential for economic development.
  • Refuge has been taken in the hyperbole of the Millennium Development Goals: “end poverty; universal education, gender equality, child health; maternal health; combat AIDS; environmental
  • The Millennium Development Goals were initiated by NGOs with social entitlement agendas. They believe growth-oriented economies such as Hong Kong, Taiwan, Singapore, South Korea, Malaysia, Thailand, Indonesia, Botswana, Mauritius, Chile etc. set a bad example.
  • sustainability and global partnership”.
  • The final irony is that Guam, New Caledonia and French Polynesia – so-called imperial administrations – have delivered much higher standards of education, health, infrastructure etc.

(Helen has a reputation for calling a spade a shovel. We hereby offer the right of reply to our colleagues in the UN! – Editor)

Pacific Islands challenge

May 25, 2010

The Free Trade Agreement between Australia, NZ and Pacific Island nations is moving ahead, but not without some angst. Known as PACER Plus, the FTA has drawn criticism. For example, Adam Wolfenden (self-styled critic of the FTA) says that PACER Plus was less about economic development and “more about getting Australian and New Zealand services to invest in the Pacific.”

Wolfenden goes on to say ‘If the development interest of the Pacific is at the heart of the intentions of Australia and New Zealand, like they continually say it is, why must it look like a free trade agreement? The global economic crisis as well as others like the food and climate crisis have shown the failure of the free market. The Pacific so far has been somewhat slow to embrace the neo-liberal ideology and given the global crises it would seem like the time to start exploring other options.”

Well we know the free market isn’t perfect, but surely getting A-NZ companies to invest in the Pacific is the ONLY way to go! We have started talks with the Australian Government (DFAT) to shape some initiatives. In this regard, Wolfenden’s concerns are a useful reference point. Anyone interested in these talks should contact us at

NZ shows the way re Pacific Island guestworkers

August 26, 2008

Australian PM Kevin Rudd is reportedly aiming to use the Pacific Island Forum in Niue in August to announce a trial plan to bring Pacific Islanders to Australia for seasonal work – to meet labour shortages in regions. The trial, to begin in 2009, will provide several thousand Pacific Islanders with special visas for 6-12 months. Accommodation, travel and housing will also be provided.

The National Farmers Federation supports the scheme, but the Construction Forestry Mining and Energy Union et al have warned about the ‘Mexicanisation’ of the labour market. The Rudd Government is reportedly to guarantee the same wages as those received by Australian workers.

The NZ Government has introduced a seasonal employment program using Pacific Islanders – 5000 guest workers enter NZ annually. A hurdle for most recruits is the cold weather.

One worker, Joel-Eddie Kalmatak, who left his wife in Vanuatu to work on a vineyard owned by Pernod Ricard, has struggled with the temperature, which plummeted to minus 6 degrees recently. Some mornings he wears two pairs of socks, two pairs of trousers, and he wraps plastic around his fingers before pulling on his gloves. He is counting the days until his return to Mele, on the island of Efate, in October. But he earns upwards of $NZ12.10 ($A9.50) an hour, 10 times as much as back in Mele. However, he pays $NZ125 for rent, and his employers make deductions from his pay for his return air-fare and other expenses.

Getting the islanders to New Zealand involves expense and considerable bureaucracy. The employer must pay half the travel costs, guarantee at least 240 hours of work, and take responsibility for pastoral care. (With thanks to Melbourne Age)

(Kevin Rudd did subsequently announce this initiative – and the Liberal Opposition is now arguing against the initiative which is dangerous given the volatility of regional electorates facing major labour shortages)

Solomon Islands rebuilding

October 16, 2007

The Testament of Solomons: RAMSI and International State-building.

The paper describes the innovative Australian-led state-building exercise, the Regional Assistance Mission to Solomon Islands (RAMSI). The mission has made significant progress since its deployment in 2003, securing law and order, arresting the country’s perilous decline and placing it on a new trajectory.

The next important tests for the mission will be the national election in Solomon Islands on 5 April 2006 and the formation of a new government thereafter.  RAMSI’s design is unique – preventive; permissive; regional in nature; nationally led; supported by the United Nations; non-sovereign; police led; and light in touch.

This Analysis examines these characteristics and the implications for international state-building and surveys RAMSI’s future challenges. 

The paper can be downloaded at

Temporary Visas important for Asia Pacific development

October 16, 2007

Our resident columnist, Bogong, visited one of Canberra’s Emergency Wards on the weekend and it was obvious that the attending doctors and nurse spoke with distinctly non-Australian accents – didn’t affect their competency one bit. But this is repeated in every hospital across the country because most of the medical staff are here on S. 457 visas. So too are engineers, skilled tradesmen, IT professionals and a host of others. Readers of Cockatoo will have seen widespread coverage in Parliament and elsewhere of the positives and negatives of S. 457 visas – a category that brings in people with skills and professionals on a temporary residence basis. Part of the visa conditions is a commitment to pay a $40,000 + salary, or little under if the worker is going to a regional or remote area. In many cases, it’s a multiple of that. There have been some well publicized abuses of the visa conditions by Australian employers and unscrupulous intermediaries looking for cheap labour. But these are the exception to an otherwise indispensable scheme. The real question on rorts might be why the Immigration Department has taken so long to come down hard on the miscreants. The reason why it is has become a big political issue is an overlap with the ACTU’s campaign against WorkChoices and therefore, by default, a policy target for Federal Labor. And the States have joined in to condemn the S. 457 visa – to show solidarity. And add to the list of complaints the use of imported labour to cover up the failure to train our own people. Going back to S.457, no one has a problem with the punishment of rorting. However Australia needs those skills from offshore to fill vacancies all over the country.  As Senator Vanstone pointed out in Parliament with her usual understatement, many of the big users are the state governments and the biggest take-up by states is health. Put bluntly, if they didn’t use imported doctors, nurses, dentists and physios, much of regional Australia would have to do without. Not a pleasant thought.  However a little hypocrisy never got in the way of scoring political points, and state leaders are no exception.

What has gone wrong in the South Pacific? – asks Bogong

October 15, 2007

As the weather warms up in Canberra, Parliament House becomes a refuge for migrating bogongs. In late 2006, in search of a cool spot, this Bogong settled in to watch the Foreign Affairs, Defence and Trade Committee do its best to come to terms with the South Pacific. We can’t seem to get it right.  The rest of the developed world sees the South Pacific as the responsibility of Australia and New Zealand – both strategically and developmentally. What is our record to date?

Well after 50 years, we have got riots in Tonga, an imminent coup in Fiji, ‘whitefellas behaving badly’ in Vanuatu, a state of virtual anarchy in the Solomons and finally PNG – at least in parts – endemic lawlessness with no solutions in sight.  Hundreds of millions of dollars of aid money has been spent, with all forms of training, military cooperation and political bonhomie – but very little to show. In fact it is getting worse.

Meetings like the one held in Canberra don’t even touch on the fact that unrest and frustration become breeding grounds for violence, anarchy and eventually terrorism. But there is a way forward. An integrated market – one with goods, services and labour is a simple answer.

Look at it this way, only 20% of high school graduates in Tonga find a job, but Australia is desperately short of all manner of skilled and even unskilled workers. Pacific islanders have strong cultures and a record of repatriating a part of what they earn. Cultural and family ties are often strong enough to take them home when they are financially independent by Island standards.

And even if it is not, the numbers are miniscule in terms of our total migrant intake and even by the standards of the 40,000 skilled workers now coming to Australia every year in the S.457 category. Opening up to the South Pacific would create activities of substance for the aid program – it would make sense to offer skills to school leavers and others before they arrive on our shores. This kind of integration would, over time, strengthen representative institutions in the island states giving a more educated and traveled population a more considered voice in political processes. 

Finally, this solution can be staged over a period of time. The process might begin with the smaller states such as Kiribati, Samoa and Tonga. If it works well in the first three years then Fiji, Vanuatu and the Solomons could follow. Because of its size and complexity, PNG might be the last off the block.  

As a footnote, Bogong ran into the Fiji High Commissioner in the Parliamentary Committee Room and asked him if he was proposing to raise working visas with the Committee. The answer was NO. He had done so with other Committees and it was not going anywhere. Why?  Well it could be because the PM had voiced what Bogong understands to be his personal objection to the idea at a South Pacific Forum last year. So the integrated market at this stage is an idea whose time has not yet come. Sad really, because it is inevitable.  Let’s hope there is not too much more violence and misspent aid funds before it happens. 

Aid hubs – US Studies Centre may be the trigger?

October 15, 2007

A think tank for research into American political, economic and cultural issues will be based at Sydney University’s main campus and in the Sydney CBD. The announcement was made in late 2006 by Mr. Malcolm Binks, chairman of the American Australian Association, at a dinner attended by PM Howard and Rupert Murdoch.

The Commonwealth Government has pledged $25 million. Additional funds have been raised from business and private individuals in Australia and the USA.  

Cockatoo members are examining the possibility of a network of development hubs in certain cities in northern Australia and the Pacific Islands. The Australian Government’s White Paper on Aid (early 2006) talked a lot about the need for economic development, supply chains etc.

The OECD has expressed interest. Progress with AusAID and USAID has however been painfully slow. Perhaps the US Studies Centre can trigger some interest. Contact the editor for more details.

Time for bright ideas – in alliance mode

October 12, 2007

 We’ve been doing the rounds of various federal agencies, and there is a great opportunity NOW to dust off your iconic ideas that might attract federal interest.

To explain, each May Budget is preceded by the New Policy Proposal process. It begins around November when Departments are asked to come forward with their bright ideas – these are then tossed around, and the serious number-crunching begins in the New Year. 

There is real interest in receiving ideas from outside the bureaucracy – because they are preparing for the incoming government (of either persuasion). If you have ideas of potential national significance then start working up your proposals. A recent example is the announcement of $200m for growing regions – quite odd unless there are countervailing measures for inland regions, but it is an example of effective lobbying.   

Some possibilities – water recycling; regional branding-regional marketing; common-user infrastructure; housing affordability models; Indigenous housing & health; food exports & supply-chains; new industries for global markets; raw material value-adding & renewable energy (especially if Labor win); environmental best-practice; energy efficiency in its various forms; Greenhouse Gas abatement; Pacific Island regeneration.