Neo-colonialism, Part 2 Economic Neo-colonialism His502 Lecture Week 10 Designed by Dr. Ryota Nishino and Ms. Lalita Sharma Edited by Dr. Gary Kieffner

Economic Development Australia, New Zealand, and European colonial nations attempted to set Pacific Island nations on paths towards development Nauru still had phosphate reserves Fiji had sugar industry Other island nations lacked resources and industries: Kiribati Cook Islands Niue PNG rich in minerals, but lacked a developed mining industry Australia backed PNG’s finances. Why did it help?

Economic Development PNG rich in minerals, but lacked a developed mining industry Australia backed PNG’s finances. Why did it help? If Pacific nations are to delay development, they will fail to engage in global trade and to gain revenue to support their own people.

Economic Development Bilateral aid: A government hands money to another government The recipient was supposed to manage funds on various projects and purposes In the 1970s the prevailing belief was that big spending on public projects on infrastructure would help developing nations But the flow of money was too big for the receiving nations to manage adequately. Skilled labour shortage and the economy too small. Corruption. Development aid went to government. Development of private corporations was delayed except for plantations. Strict conditions

Economic Development Many aid programmes and funds coming in, helping development, but not enough to make Pacific nations support themselves Sizes of aid and programmes ambitious and large. By the 1980s Pacific nations in deep debts from 1970s projects.

Economic Development Also during the 1970s, Pacific nations opted for import-substitution for the goods they could not produce or manufacture within their own territories. Debts soared. The value of imported goods in Vanuatu was 2.5 times larger than of the exports. Four times in Western Samoa, and five times in Tonga. PNG’s exports earned only two-thirds of its imported goods These debts were too large for foreign aid and the tourist industry to help Urbanisation and population growth

Economic Development Subsistence farming became less effective and efficient: Decreasing availability of land Soil depletion Life in larger towns: Job shortage; high unemployment Finances for families relieved through remittances Australia and NZ accepted Pacific Islanders as immigrants

Economic Development 1980s: change in development strategies: Multi-lateral aid: Donor governments donated funds and goods to small-scale regionally based organisations Donors now believed that direct assistance to organisations in need would be more effective than giving cash to governments