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The member nations of the South Pacific
Tourism Organisation are characterised by several key features:
- their small populations;
- their limited resource base, including
natural and human resources and capital;and
- their remoteness from the major world
markets.
None of the SPTO member countries are
industrialised nations. However, their level of economic development varies
widely.
Whilst
foreign
aid is significant in many SPTO member countries there is, a growing
determination in many SPTO member countries to move towards a much greater
degree of economic self-sufficiency. There is also an awareness of the need to
attract increased foreign investment. For many of the island countries this has
not been an easy task, nor has there been desired results. Most are conscious of
the need to safeguard traditional lifestyles and customs and preserve the
natural environment. These needs have had to be balanced against desires for
greater self-sufficiency, increased employment opportunities and the other
social benefits of greater economic activity such as improved education and
health systems.
Many SPTO member countries seek to maximise the benefits
of overseas investment by prescribing preferred types of proposals and features
of proposals. There is a strong preference for new investments that will:
- create employment;
- reduce the cost of imports;
- increase export earnings;
- result in increased skill levels among
local workers;
- otherwise contribute positively to
economic development; and
- conserve the environment and cultural
heritage.
SPTO member country Governments' policies are
generally supportive of foreign investment. This reflects both a growing desire
for economic self-sufficiency and the need to support worthwhile social
objectives including increased employment. Further opportunities for investment
in other activities are limited by the small size of the island and its
population.
All the countries and territories within the
region have recognised the future importance of tourism development.This is
particularly the case in the Cook Islands,Fiji,French Polynesia, New
Caledonia,Niue,Palau,Samoa,Tonga and Vanuatu.These countries,together with five
other Pacific Forum Island nations (Federated States of
Micronesia,Kiribati,Marshall Islands,Nauru and Papua New Guinea)and American
Samoa,make up the region. Tourism generates substantial incomes for the majority
of countries within the region. Tourism dominates the economies of the Cook
Islands and Palau and generates a substantial part of GDP in Fiji,French
Polynesia,New Caledonia,Samoa and Vanuatu.
Tourism in the region can be analysed in terms of the
number of visitor arrivals,and the nature of the outbound tourism markets on
which they draw.On this basis tourism destinations in the region fall into four
groupings:
- Those able to draw on a range of
originating markets and with visitor flows of 100,000 a year or more.These are
Fiji,French Polynesia and New Caledonia. Fiji,French Polynesia and New
Caledonia,which draw on European,Japanese, Australian and New Zealand
markets.Fiji also attracts business from Korea, dependent on a Korean Airlines
service,while both Fiji and French Polynesia have substantial business from
North America.
- Those able to draw on a range of markets
but which are more limited in terms of tourism plant:Cook Islands,Papua New
Guinea,Samoa and Tonga.These have around 30,000 to 70,000 visitor arrivals a
year.While most have substantial business from Australia and/or New
Zealand,they have also developed longer- haul markets.The Cook Islands,Samoa
and Tonga benefit from the services of Air New Zealand,which includes
travellers using Round the World (RTW)fares. Palau draws on Asian
(Japan,Taiwan and Philippines)and American markets,but also seeks to develop
European markets
- Destinations limited to a smaller number
of originating markets,but otherwise similar to the above in terms of the
number of visitor arrivals.FSM and Vanuatu are in this category,with FSM
drawing on Asian and US markets and Vanuatu on Australia and New Zealand.
- Countries with a more modest level of
visitor arrivals:American Samoa,Kiribati, Marshall Islands,Nauru,Niue,Solomon
Islands and Tuvalu.All of these destinations tend to suffer from access
constraints,with airline flights from only a limited number of originating
points,tending to lead to high costs of hotel and resort operation.
Although there are approximately 1,500 tourism related businesses in the
region,the majority of which are small and medium sized businesses.This modest
size of the industry,leads to a limited market access.
Importantly for
the future,tourism has been widely identified as a key sector for future
economic growth and the provision of employment.At regional level it is
identified as a priority sector for development and for the alleviation of
poverty.
A majority of the SPTO member countries offer
incentives to new investors. The nature, scope and duration of incentives vary
markedly between each country. In some cases, clear written guidelines are
available. Other countries do not provide documentation but assess the level and
type of incentive or concession for each individual investment proposal. At
present, a number of countries have indicated that they are in the process of
revising their investment policies. The specific tourism related investment
incentives offered by each SPTO member country at the time of this publication
are listed in the individual country profiles.
There are relatively few areas of economic
activity which are not open to overseas investors. In PNG for example, several
activities are restricted to foreign investment, including:
- land transportation;
- manufacture, wholesale and retail sale of
handicraft and artefacts; coffee and copra production and export;
- small-scale alluvial gold mining; and
- coastal fishing (within a distance of five
kilometres of the shoreline);
Most SPTO member countries have some form of
legislation and regulations governing the formation of companies and other
business entities. Generally, it is up to the overseas investor to determine
what form of business structure is most appropriate and the circumstances of
each project.
Wages and salaries in the SPTO member
countries are low compared with those in the developed and industrialised
countries. They are, however, higher than in most of the developing Asian
countries such as China, Vietnam and Indonesia.
The SPTO member
countries generally have a shortage of semi-skilled and skilled workers and
experienced business managers. Many overseas investors are required to provide
training for local workers. Indeed, this is an aspect of foreign investment
strongly favoured by most SPTO member country Governments.
Several SPTO
member countries have established measures that provide minimum requirements for
employees, in such areas as wages, working conditions and retirement benefits.
The SPTO member countries are generally free of labour disputes. While
trade unions do not exist in all of the SPTO member countries they are not
prohibited in any of the countries.
Capital markets in the SPTO member countries
are not highly developed, other than Fiji and PNG. Most facilities exist to
assist in the financing of new businesses. The extent to which finance is
available for overseas owned or controlled businesses varies between SPTO member
countries.
In some of the SPTO member countries, government sponsored
development banks or provident funds are able to provide funds for development
projects. Provident funds are usually managed by statutory corporations.
The taxation regime varies widely
between SPTO member countries. Specific details on company taxes and personal
income taxes as listed separately under each country.
The two common types of limitations imposed
on foreign investors in the SPTO member countries relate to access to overseas
workers and access to land.
It is not possible in an investment guide
like this to cover the full range of information of potential interest to
overseas investors, especially as many SPTO member countries lack readily
available reference material. Each country review contains at least one contact
address where interested investors may gain more comprehensive and detailed
information. It is strongly recommended that investors visit countries they are
interested in to get a first hand view of the investment opportunities,
advantages and disadvantages.
SPTO acknowledges information obtained from
Tourism Investment Guide in the Pacific Islands by the Pacific Islands Trade and
Investment Commission.
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