Financial institutions and markets in the South Pacific : a study of New Caledonia, Solomon Islands, Tonga, Vanuatu, and Western Samoa

## SETTING Located some 1500 kilometres due east of Australia and 1700 kilometres north of New Zealand. the French Overseas Territory of New Caledonia covers aland area of 19.103 square kilometres. It is comprised of the islands of New Caledonia. Walpole. Isle of Pines. and the Loyalty, Belep, Huon and Surprise and Chesterfield island groupS.l The island of New Caledonia, la grande terre. is the largest and comprises 16,750 square kilometres or some 88 per cent of the Territory's total land mass and the major portion of its population of 145,368. The population itself is comprised of different races and cultures of wh ich the native Melanesians are the largest group. The most recent statistics indicated that they comprised 42.6 per cent of the population compared to 37.1 per cent for Europeans. 8.4 per cent Wallisians and Futunians (another French Pacific Territory). 3.8 per cent Tahitians, 3.5 per cent Indonesians. 1.6 per cent Vietnamese. and the remainder from a mixture of other races to include Chinese and ni-Vanuatu. Relatively little is known of the islands pre-European history. La Perouse reported signs of land in this general area but did not sight any of the islands. This was left to Captain James Cook. He visited the islands on 4 September 1774 and named the main island. New Caledonia, as weil as the Isle of Pines. The French explorer, Bruni d'Entrecasteaux, also vi si ted the area in 1792. In practice, however, there was Iittle interest in the land other than for some sandalwood trading. Missionaries brought about the first extended European contact. British missionaries from the London Missionary Society, for example, arrived in the Loyalty island group in the 1830s, and were followed by French Catholic missionaries in 1840. The first missionaries on the island of New Caledonia itself were Protestants from Polynesia in 1841, and they were joined in late 1843 by French 1 2 ## Financial Institutions and Markets in the South Pacific Catholic priests who landed at Balade supported by French naval forces. The latter on 21 January 1844 raised the French flag over the island where it continued to fly until 1846, when an official French presence was withdrawn. Apparently France had intended to take New Caledonia after having lost the opportunity to claim New Zealand but, following problems with the British over other matters, the claim was never pressed. The British too seemed interested in the islands but, like the French, seemed unwilling to push the issue. The French interest in New Caledonia resumed in 1851 when the governme nt considered its possibilities as a convict settlement and finally an alliance, in 1853, between France and England against Russia removed the last obstacle for annexation. 2 Thus, in response to numerous incidents in which French missionaries, and even the crew of a survey ship, were killed and eaten by the local islanders, France sent naval forces to the area. Febvrier Despointes raised the flag and annexed the islands for France on 24 September 1853. This, however, did not solely resolve the fighting between natives and Europeans and conflicts with local islanders continued at least up to 1917 with some serious fighting in 1878 and 1917. The Territory was used as a French penal colony from 1864 to 1897, but even before annexation some European cattle ranches were already in operation. The early settlers tried many other crops and a range of cash crops, such as sugar, tobacco, coffee, and cotton were all grown with some success, only to faillater due to pests, disease, or other natural problems. There was also difficulty in obtaining sufficient labor when required, even while a penal colony. The labor problems for agriculture were compounded in 1863 when a French mining engineer, J ules Garnier, discovered commercial nickel deposits and the later gold rush in 1870. As the mineral sector paid much higher wages, it similarly depleted the potential for an agricultural work force, and this problem remains largely the same today. Much of New Caledonia's mineral industry owes its origins to the work of John Higginson, an Australian, born of Irish parents. He was responsible in 1877 for establishing the world's first nickelore smelter in Noumea. Later, on 18 May 1880, the major operators in mining business, Garnier, Higginson and Henri Marbeau, effectively merged their operations to create the Societe le Nickel: the company which still today dominates New Caledonia's economy. With the Second World War, and the occupation of France by Germany, there was concern that New Caledonia's mineral resources might be used by the Axis powers, and the islands' future particularly TABLE 1.3 Institut d'Emission d'Outre-Mer: assets and liabilities, 31 December 1984 Assets French franc notes Coins Front Matter....Pages i-xviii Financial Institutions and Markets in New Caledonia....Pages 1-62 Financial Institutions and Markets in the Solomon Islands....Pages 63-156 Financial Institutions and Markets in Tonga....Pages 157-202 Financial Institutions and Markets in Vanuatu....Pages 203-288 Financial Institutions and Markets in Western Samoa....Pages 289-343 Back Matter....Pages 345-379