by Dr J Floor Anthoni (2004-2005)
Nobody will ever be able to predict the future
for Niue, but it is possible to get a feel for current and future problems,
Niue's limitations and prospects. On the one hand, Niue is an unfulfilled
paradise, yet on the other hand it is not easy to live there. Surely, there
exists a way to maximise the positives and to minimise the negatives? Perhaps
unforeseen possibilities exist, new openings nobody has ever thought about.
This chapter leaves the exact path of science and dares to challenge you,
the reader to think along with us.
constraints: the rules for finding solutions
to Niue's problems
benefits: what makes Niue a paradise and
how can these benefits be maximised?
problems: what are Niue's problems and how
could these be minimised?
business: liabilities and benefits for doing
business with Niue and how this can be enhanced
Constraints The idea is to make Niue self-sufficient so that it can pay its way
in the world and repair from its own resources the damages wrought by future
hurricanes. But in doing so, Niue should not lose its present character,
its culture and the qualities that define it. However, when something fails,
it is typical of human thought to do more of the same, to seek expensive
technological solutions and to legislate as if laws are in any way productive.
All these solutions are expensive and sure to fail in a poorly resourced
state like Niue. So, the solutions to Niue's problems should be smarter
than we are used to.
Historically, there have been many philosophers imagining utopias
(Gk: eu= well/good; topos= place; an imagined perfect place
or state of things) but in practice these always failed due to the frailties
of human nature. Instead we seem to be stuck with the Western freemarket
free-enterprise system, believing that this is also the best we can do.
Niue, playing part in the same world, being a member of the United Nations
with all its declarations and obligations, dealing with the World Trade
Organisation, being organised by a Westminster type of democracy under
English law, cannot really choose to be different, yet needs to be different
enough to solve its unique problems.
These problems are experienced also by other small island states in
the Pacific, as they have already pooled their resources to think it over,
but so far without practical results [1,2,3]. In principle, Niue needs
to progress such that:
it maximises revenue by:
generating more revenue from existing activities and crops
further development of existing resources and markets
discovering new methods, resources and markets that are compatible while
providing better returns
maximising labour output, since labour is scarce
it minimises costs by:
rationalising and standardising activities, procedures and equipment
making equipment and plant (productive equipment) last longer by proper
selection for quality and maintenance
reducing bureaucracy and costly regulation
reducing competition while maximising co-operation
sharing equipment rather than owning
It pays to remember that our Western societies do not score favourably
on the above list to the extent that we have become dependent on an ever
increasing complexity which is becoming too expensive to sustain. Instead
of enjoying more free time, people have to work harder in order to sustain
their material needs. People socialise less, talk less and have little
time for one another. We have become wasteful of labour, energy and materials.
Niue must not follow this path.
The creation of wealth has come a long way from the agrarian society
to what it is today. But what kind of economies would be most suitable
for Niue? From our chapter on resource management , we quote:
Hunter-gatherers: capital could not accumulate because one could
own only what one could carry. Domesticated animals of burden (horse,
oxen, donkey, llama) changed this somewhat, allowing for some possessions.
Exploitation of environment. This was Niue's main economy and it will remain
viable for valuable products supplied from the natural forests.
Agrarian economy: Land + Labour creates Capital. Individuals
cannot create more land, but nations can wage war for more. Land was owned
by the ruling classes. Exploitation of land and land labour. Niue has a
poorly developed agriculture but in order to retain its character, this
could never occupy more than 30% of the land. For self-sufficiency and
export, this economy should be developed further.
Early Industrial economy: Capital + Labour creates New Capital.
Exploitation of industrial labour. This era has long passed since the availability
of cheap energy and technology. Niue does not want to become a Maquilladora
of slave labour.
Robot economy: Capital + Technology (+ fossil fuel) creates New
Capital. Technology is used to replace human fallibility and to amplify
every other human capability. Exploitation of fossil fuel. This economy
is very complex, requiring a large infrastructure of specialists and equipment
manufacturers. But Niue's scarcity of labour demands that it carefully
embraces this economy.
Financial Casino market: Debt + Growth creates Capital. Technology
is used to speed transactions. Exploitation of capital. Many small nations
have become tax havens to exploit the capital market, but for Niue to encourage
tax evasion while at the same time being subsidised from NZ taxes, would
Technological economy: Capital + Technology (+ fossil fuel) +
Labour creates New Capital + New Technology, hence its unstoppable
growth. Technology is used for mass production while creating new technology
as well. Technology workers become exploited. This economy needs a large
infrastructure and pool of experts and markets, not suitable for Niue.
Knowledge economy: Capital + Knowledge (+ Technology) + Labour
creates New Capital + New Knowledge. It could also grow exponentially.
Technology is used to amplify human mental capacity. Knowledge becomes
proprietary. Knowledge workers become exploited. This economy needs a large
pool of knowledge workers and large markets and is unsuitable for Niue.
From the above summary it would seem that Niue should embrace the agrarian
and robot economies with care, while avoiding unnecessary costs and infrastructure.
Not mentioned above are the following economies:
service economy associated with tourism and hospitality. Niue is
an attractive holiday destination for people who value what Niue has to
offer, and this service economy suits the friendliness and natural hospitality
of Niueans, although they also wish to remain independent (not slaves).
trade economy: the nation lives from trans-shipping goods. This
economy works only for nations with safe harbours on the crossroads of
trading routes, such as Singapore, HongKong and Holland. Obviously, this
will not work for Niue. Nations with trade economies are also well suited
as financial centres.
barter economy: much is done in Niue without money passing hand.
It forms a strong part of Niue's social cohesion.
At the moment Niue is a self-governing state with aid from New Zealand
and other sources. To maintain the apparatus of an independent state, for
the sake of some thousand inhabitants, is very wasteful and does little
to solve Niue's problems. Yet becoming incorporated into New Zealand, would
introduce unenforceable top-heavy legislation and very wasteful practices.
Niue needs something in between where it can govern itself as part of New
Zealand, but following its own ways.
Happy is the land that has neither taxes, nor
paid civil service, nor prisons, nor police! The problem that puzzled Plato and Confucius
and Machiavelli and Locke and Jeremy Bentham, has never troubled Niue, for it has not felt
the need for these things. - Sir Basil
Although the above list is long, it would be possible to improve on only
some of the points mentioned above, towards more self-sufficiency.
Problems The problems besetting Niue must be quite enormous indeed for so many
of its people having left their native island. We list them here frankly
so that they can be identified and minimised.
small nation: Whatever Niue entertains will be small. It will be difficult
to achieve benefits of scale.
isolation: Niue lies in an isolated area of the planet, central to the
huge Pacific ocean
insufficient variety: modern society thrives from a high variety in skills
and professions, which is not possible for Niue
insufficient funds to support an independent nation: much of the aid money
disappears without benefit to the people or nation
cultural inertia: holding back progress, like
the desire to keep Niue as it always was
the fragmentation of land and the inability to buy land in Niue
the Sunday tradition of complete rest
low labour output: there is no urgency, things happen slowly, letters are
not answered and so on.
economic dependence: a culture of dependence has taken hold. Aid keeps
pouring in with little accountability.
few income generating jobs: most have government jobs that do not generate
net migration due to lack of opportunity: Niue lacks what New Zealand can
offer in jobs, income and opportunity
limited infrastructure: the infrastructure for manufacturing and business
is largely absent. There is no pool of professional skills.
no safe harbour: the sheltered side of the island is facing the brunt of
hurricanes and a safe harbour may never be possible
lack of labour: most qualified people are in safe and undemanding government
small output: in the tropical climate and by tradition, one does not work
The Niuean language is widely spoken and in the Fono (parliament). It is
not easily learnt.
land ownership: the land is owned by many, scattered in small parcels.
Foreigners cannot buy land and leases are uncertain.
land productivity: the land has but little top soil which is lacking in
certain minerals. Although rainfall is 2000mm/yr, water drains away through
the porous limestone substrate and there is a seasonal drought in summer.
Once in a while a crippling year-long drought strikes.
sea: the sea is unproductive and has not been explored for its potential.
Although Niue's EEZ is large, harbour is unsafe.
hurricanes: large storms are a reality, able to destroy crops, ships, buildings
and lives. Resilience is required.
tourism: tourists desire accommodation near the sea and overlooking the
sea at the island's most sheltered side, but these places are right in
the storms' fury.
harbour: the harbour needs to be enlarged for efficiency and safety during
lesser storms. But the reef drops down to 20m and any structure erected
here would not resist hurricanes.
Business considerations For businesses to establish themselves, there are more hurdles. The
information presented here originates from a presentation of Kim Gordon
in September 2004.
modern business requires to consider carefully the following factors:
small labour pool: where to get enough unskilled and skilled labour from?
untrained labour: most people will need to be retrained in what is required.
This involves patience and costs.
small output: traditionally, Niueans do not work hard in Niue although
they do outside. The matafoa family bonds may stifle initiatives.
high risk: although there is support from government, businesses face high
risks due to the many uncertainties.
no asset security: one cannot own the land, and therefore the buildings
on it provide little asset security.
no insurance and underwriting: insurance companies avoid hurricane-prone
places which leaves the business uninsurable.
hard to get a loan: it is much easier to get a loan against a secure asset,
but such assets in Niue are not secure.
what foreign investors look for:
political stability: due to its small size, Niue is politically not stable
in its present situation
legal certainty: although Niue operates under British law, it remains sufficiently
different to cause legal uncertainty
security: see above
community acceptance: local people are skeptical of new ventures
as they have seen so many new ideas fail.
medical facilities: in order to be able to hire foreign experts, their
families must be safe
Issues facing foreign investors:
accessibility by air and sea: efficient transport to and from Niue. Ships
visit only once a month and planes once a week. There is no air freight
reliability of communications: although Niue has satellite communication
with the world, its telephone system is limiting and mobile phones do not
reluctance of banks to accept assets in Niue as security for finance: see
reluctance of insurance underwriters to provide cover for Niue based assets:
What is happening now? The company Reef Shipping has taken an initiative
fish processing factory: in joint ownership, a new fish processing factory
was built to process the catches from Niue's EEZ. Fishermen will be attracted
from abroad, as also locals will be trained. Air freight of valuable fish
will also open an air freight service to Niue.
noni processing factory: the wild nonu (noni) fruit is believed to promote
health and longevity and its juice is in demand world-wide. This factory
will process nonu collected from the forests, and grown on the Vaiea farm.
Vaiea farm with 300 acres going to be planted in noni
noni fruit being collected from villages: in their free time, anyone can
collect noni from the bush and sell it to the factory.
markets being established for locally grown limes and vanilla: the limes
(a citrus fruit) needs wider markets with higher profits. Vanilla is a
new crop of high value, requiring further development and marketing.
books and videos in homes: nearly all Niueans must master multiple jobs
and skills. These skills can be acquired with books and instruction videos.
The local library could become a source of such educational material.
Niuean language initiatives: the Niuean language defines the Niuean culture
but is not taught well at schools. Although the newer generations should
be proficient in English, their native language must remain viable.
benefits from productive businesses in Niue:
creation of jobs: there will be jobs for Niueans now living abroad
generation of GDP: more money will circulate on Niue, and with it more
spending power for each.
every person in Niue can participate and benefit
opportunity for new private business on Niue: other businesses become more
viable, particularly when tying in with the others. e.g.: provedoring fishing
boats, providing jobs in private sector
availability of opportunities on Niue leads to retention of population
and encourages others to return
marketing of Niue products raises profile with tourists to Niue
The next ten years: Reef Shipping (as part of Reef Group) has committed
itself to a path of positive involvement in Niue:
Reef Shipping is a long-term partner of the people of Niue
We will facilitate sea and air transport capacity to cater for economic
We will invest in tourism, retirement villages, timeshare accommodation
We will establish a seed capital fund to promote local enterprises which
complement the Group's investments
We will sponsor education scholarships and community schemes that develop
expertise of benefit to the businesses we have established or promoted
We will create direct employment for 200 people and indirect employment
for a further 400