Story: South Pacific economic relations

Page 4 – Aid, remittances and tourism

Aid

Since the mid-1960s the Pacific has consistently received about half of New Zealand’s total overseas aid. Some of that aid has been delivered in the form of tourist and general infrastructure projects such as airfields, wharves and communications systems. In the 1940s 100% of New Zealand’s South Pacific aid went to its own territories of Niue, Tokelau and the Cook Islands. This reduced to 50% in the 1980s, and 40% in 2007. Meanwhile, New Zealand progressively reallocated aid to the larger and more populous island groups of Melanesia (20% in the 1980s, more than 30% in 2007).

Migration and remittances

Many migrants send remittances (gifts of money, goods or services) to the Pacific Islands – standard practice since the 1950s. Migration from Western Samoa increased sharply at that time, when New Zealand’s growing economy offered employment.

After a series of military coups in 1987, 2000 and 2006, followed by military rule, thousands of Indo-Fijians migrated to New Zealand to escape discrimination and economic hardship. The population of Pacific Islanders in New Zealand had reached 266,000 by 2006. About half were from Western Samoa, although a clear majority of those had been born in New Zealand.

From 2007 the Recognised Seasonal Employer scheme allowed accredited employers to bring workers to New Zealand on seven-month permits to work in the viticulture and horticulture industries when no New Zealanders were available. The first large group to take advantage of this scheme was 1,600 workers from Vanuatu.

In 2007 annual remittances from Samoans in New Zealand amounted to about $80 million, Tongans $55 million, and Tuvaluans $1 million. Cook Islanders’ remittances, which were around $5 million each year in the 1980s, had fallen to around $1.5 million a year. In total, remittance flows from New Zealand to the Pacific Islands in 2007 were around $140 million, compared with aid of $180 million and New Zealand imports from the Pacific Islands of $170 million. For both Samoa and Tonga, income from remittances greatly exceeded that from imports and aid.

Flying the Coral Route

From 1951 to 1960 the economies of several islands in the South Pacific benefited from the ‘Coral Route’, one of the most glamorous airline flights in the world. The New Zealand-owned Tasman Empire Airways Ltd (TEAL) offered flights from Auckland through Fiji, Samoa, Tahiti and the Cook Islands on luxury flying boats that landed in the lagoons of small coral islands. The planes carried only 45 passengers, all first class, and their meals were cooked to order by an on board chef. A ticket for the five-day trip cost six times the average New Zealand weekly wage.

Tourism

In several South Pacific countries income from New Zealand tourists forms an increasingly important part of the economy. New Zealanders made up 270,000 – more than 20% – of 1.3 million tourists in the region in 2007. New Zealand was the second-largest national group of South Pacific tourists after Australia. While Fiji attracts the largest number of foreign tourists – 40% of the total – tourism has become the biggest foreign-exchange earner in several other island countries such as the Cook Islands.

How to cite this page:

Geoff Bertram. 'South Pacific economic relations - Aid, remittances and tourism', Te Ara - the Encyclopedia of New Zealand, updated 13-Jul-12
URL: http://www.TeAra.govt.nz/en/south-pacific-economic-relations/page-4