Reactividad de los astrocitos Se evaluó el efecto de la isquemia y de los tratamientos a las 120 horas post-cirugía, sobre la reactividad de los astrocitos en

1. INTRODUCTION

The following sections consider the trust funds of four Pacific microstates,

exploring their origins, management and investment policies, and the impacts they

have had on trust beneficiaries. The Pacific islands region, which many islanders

prefer to call Oceania (Hau‘ofa, 1993, 1998), shares a common colonial experience

and a common geographical remoteness from the core centres of capital. In many

respects the Oceanic countries are among the most peripheral places on earth.

Limited investment opportunities in the region have prompted several Oceanic

states to establish trust funds to reduce their position of marginality by engaging

with global capital.

This chapter considers the experiences of Kiribati, Nauru, Tonga, and

Tuvalu and the economic geographies and development aspects of their trust funds.

It will focus in particular on the application of trust funds within specific national

economic geographies. It is these specific geographies that influence whether or

not the potential capacities of trust funds are realized. The four cases considered

here reflect varying capabilities of the state to extend the benefits of resource

revenues to Pacific island residents.

2. KIRIBATI

The independent Republic of Kiribati possesses a trust fund that derives from

colonial times. The fund was set up during the British colonial period as a means

of saving a portion of the phosphate mining revenues that accrued to the colonial

government and its entities and with the intent of using these saved revenues to

benefit the people of the islands. The fund is now under the control of the Kiribati

government, and it invests in offshore assets with the goal of producing a sufficient

return to help finance government activity. In doing so, Kiribati funds government

services without having to tax heavily its largely subsistence-based populace. The

fund invests offshore in order to provide social benefits within the country.

2.1 Kiribati and the political economy of an atoll state

The Republic of Kiribati is a Micronesian island state in the Central Pacific (see

Map 1). The country comprises the Gilbert Islands (Kiribati proper), the Phoenix

Islands, and the Line Islands, including Kiritimati (Christmas Island). Prior to

independence in 1979, Kiribati was part of the British Gilbert and Ellice Islands

Colony (GEIC). Kiribati contains 34 islands, all but one of them coral atolls, with a

combined area of 811 km2. The total population is about 92,000 and consists

primarily of Gilbertese, known as I-Kiribati. Nearly half the population lives on the

capital island of South Tarawa. Kiribati’s exclusive economic zone totals

3,550,000 km2 (the second largest in the region), giving a sea to land ratio of 4377

to 1. Kiribati’s small land area and generally unproductive coral soils (Mason,

1960) means that today most of the nation’s wealth is derived from offshore

fishing licences granted to overseas fleets. Copra and seaweed are the most

residents.

Kiribati is a low-income country with an estimated 2001 GDP (PPP) of

about US$79 million, or about US$800 on a per capita basis. Only about 20% of

the working-age adult population is formally employed, and most of those hold

jobs in the public sector (Throsby, 2001, 2). The remaining 80% depend on a

combination of subsistence (fishing and agriculture) and family support (from both

resident and non-resident family members) for their livelihood. The generation of

new wealth depends heavily on offshore income from fishing access fees,

remittances, and development aid, in addition to revenues from the country’s trust

fund. Kiribati uses the Australian dollar, and thus avoids the need for setting its

own monetary policies and managing the currency. The country does not have a

reserve bank or monetary authority and the use of the Australian dollar limits the

ability of Kiribati to exercise its own monetary policies (Kiribati, 2000a).

2.2 The Revenue Equalisation Reserve Fund

The Revenue Equalisation Reserve Fund (RERF) was established when Kiribati

was part of the GEIC. The source of fund capital was royalty revenue from the

extensive phosphate deposits on the island of Banaba (Ocean Island), which was

part of the GEIC. These deposits were discovered by Albert F. Ellis, a New

Zealand geologist employed at the Sydney office of the Pacific Phosphate

Company (then John T. Arundel and Co). In 1899 Ellis took an interest in a stone

doorstop at the company’s office and suspected that it might contain phosphate.

Ellis tested the stone, and the results suggested an incredible phosphate content of

78 percent (Ellis, 1935; Williams and Macdonald, 1985). Ellis established the

neighbouring island of Banaba, which was known to be geologically similar, was

likely to contain phosphate. He revealed his discoveries to the company, which

arranged for field visits to gather more samples.

Ellis made field visits to both islands in 1900. On Banaba, he immediately

negotiated a 999-year agreement with Temati, the alleged ‘king’ of the island,

giving the company exclusive rights to mine phosphate on Banaban lands in

exchange for an annual payment of £50 in cash or trade goods (Ellis, 1935;

Macdonald, 1982, 95-96).1 Phosphate mining began on Banaba in 1900 and

continued until 1979. In 1945, largely because of the extensive environmental

damage done to the island (which was never very agriculturally productive), the

Banabans were relocated to a new home on the island of Rabi, in Fiji, a plan that

had been under discussion since 1928 (Schutz and Tenten, 1979). Mining

continued on Banaba until 1979, when Banaban agitation, falling world phosphate

prices, and depleting reserves convinced the newly-independent Kiribati

government to close the mines (K. Teaiwa, pers. comm., 2002).

The post World War II period was a time of rebuilding after the disaster of

war, when the main island of Tarawa was heavily damaged. Michael Bernacchi,

Resident Commissioner of the GEIC for much of the 1950s, advocated order,

reconstruction, and the colonial administration’s demonstration of concern for

locals’ welfare and lack of exploitation (Macdonald, 1982, 173). He proposed

establishing a trust fund, to be administered by the GEIC on behalf of the islanders,

1

The terms of the agreement were periodically revised, under British government pressure, and rental payments, compensation for damage, and royalties were later paid to the Banabans. During the period 1900-13 the Pacific Phosphate Company made a total profit of more than £1,750,000, of which less than £10,000 was paid to Banabans. See Macdonald (1982, Chap 6) for details.

based on the revenues from Banaban phosphate.2 In the continuing debate over

whether phosphate revenues should be saved or spent, Bernacchi clearly supported

saving part of the phosphate revenues. His proposed fund would accumulate

reserves to generate income when phosphate revenues ceased flowing.

Bernacchi pushed for the fund in 1956 because in the following year the

agreement that the colony had with the United Kingdom regarding copra exports

was due to expire and would put the colony in a weaker financial position

(Macdonald, 1971, 140). The Revenue Equalisation Fund (later Revenue

Equalisation Reserve Fund) was accordingly created in 1956 with $555,5803

provided by the colonial administration, of which $155,580 came from the sale of

Japanese assets from their wartime occupation and $400,000 from the GEIC’s

general fund (Toatu, 1993). As Macdonald notes, the trust fund ‘represented the

first positive step that had been taken to safeguard the Colony’s financial future’

(1982, 173).

Thereafter, varying amounts of phosphate revenues from the Banaba mines

were deposited into the fund. In 1963, the new Resident Commissioner, V.J.

Andersen, reversed this policy, arguing that phosphate revenues were more

urgently needed for infrastructural projects. From 1963 to 1967 no revenues were

2

The Banabans at this time had their own trust fund, which was set up in 1913 and based on the earlier recommendations of the then Resident Commissioner, Captain John Quayle Dickson RN. From 1908 onwards, the fee that the Pacific Phosphate Company paid for phosphate rights was paid to the GEIC, rather than into the British treasury. After the Banaban fund was established, the Pacific Phosphate Company paid 6d per ton to the government and another 6d per ton to the Banaban fund. Albert Ellis was retained as the company’s representative on Banaba until his later appointment to the British Phosphate Commissioners (see the Nauru section of this chapter). The Banaban fund was later used to finance the relocation of the islanders to Fiji and was a model for the RERF.

3

Currency figures in this chapter are expressed in the local currency for each country, unless otherwise indicated. For Kiribati, Nauru, and Tuvalu this is the Australian dollar, while for Tonga it is the Tongan Pa‘anga.

deposited into the fund. In 1967, concerned with the financial position of the

colony, the British government ordered a socio-economic survey be carried out

under the direction of Sir George Mooring. The Mooring Report of 1968 called for

depositing 25% of phosphate revenues into the trust fund, and this policy was kept

in place until the closing of the Banaban mines in 1979.

Prior to independence, all income generated by the fund was reinvested,

and drawdowns began only after 1979. When Kiribati became independent in

1979, the Ellice Islands formed a separate country called Tuvalu. The Tuvaluans

asked for a share of the trust fund, but Kiribati was successful in arguing that the

fund belonged to it alone. Kiribati was also successful in convincing aid donors

that fund capital not be considered in aid decisions (Macdonald, 1982, 273).

Fund governance

When the RERF was first set up it was managed by the colonial authorities. After

Kiribati’s independence, the fund was transferred to the independent government

and its structure was elaborated within the new National Economic Planning

Office, part of the Ministry of Finance. The RERF is managed by a unit within this

office, called the Investment Unit, along with the Policy Analysis Unit, the Budget

Unit, and the Line Ministries (which handles the economic affairs of the remoter

islands). Each of these units is under the direction of a Senior Economist, and

within the Investment Unit there are two other economists assisting the Senior

Economist. All of the units are under the direction of the Chief Economist.4 The

Investment Unit is responsible for the nation’s investments, including those of the

4