POLITICAL REVIEW. MICRONESIA

tion once it was clear that our govern­ment was supported by our people.Instead, we have taken a peacefulroute; we are penalized." Anotherirony is that the Pacific Daily News,published in neighboring Guam, seemsto have trouble viewing the FSM as anindependent nation. When PresidentHaglelgam paid a first state visit toAustralia in October 1988, even receiv­ing a 21-gun salute when he arrived inCanberra, the Pacific Daily News bur­ied the story in a column of newsbriefs.

Whatever those elsewhere maythink about FSM dependence on theUnited States, the changes from trustterritory days have been significant.FSM leaders control the direction anddaily operations of the government andalso manage the extensive two-hun­dred-mile fisheries zone, which at onetime was a great source of contentionbetween the FSM and the UnitedStates.

On the economic front, leaders havebeen grappling with how to establishan economic base that will withstandthe first step-down in compact fundsfrom the United States in 1992. By mid­1989, the greatest source of local reve­nue was fishing licenses and violationfees. In 1988, fishing revenues wereUS$7.7 million, up from US$3.9 mil­lion in 1987. Haglelgam has proposedthat the national government focus itsresources primarily on fisheries and putabout half of all fisheries rights fees,along with all the proceeds from finesand forfeitures, into a loan fund forcommercial fisheries development.Haglelgam would also like to see for­eign banks operating in the FSM loanback more money for economic devel-

153

opment to its citizens. Less than 23 per­cent of the more than US$S2 milliondeposited in the banks was beingloaned back to borrowers in 1988­1989.

There has been little economicgrowth and a great deal of ambivalenceregarding foreign investment in theFSM. Constitutional prohibitionsagainst land ownership by foreigners,combined with vague standards andunpredictable or arbitrary applicationsof foreign investment laws, have servedto discourage potential foreign inves­tors. The government has placedemphasis on investing the compactmoney and on schemes for financingeconomic development. In May 1989,the federation's congress appropriatedUS$4oo,ooo to pay the initial costs of aplan to issue medium-term bondssecured by anticipated Compact ofFree Association funds.

JOAN KING

GUAM

The political status debate and eco­nomic expansion provided the contextfor nearly all significant developmentson Guam during the year under review.Guam's elusive quest for self-determi­nation and commonwealth status withthe United States symbolized muchmore than a path to greater politicalautonomy. It represented in dramaticfashion the problems of being onlypartly American. For some, that wastoo much, and for others it was notenough. Of equal, if not greater signifi­cance, was the continuing economicboom. The stresses introduced byrapid economic development weremanifested in avid debate over the

154 THE CONTEMPORARY PACIFIC. SPRING 1990

associated ecological, cultural, andsocial costs. Nearly all political leadersdecried the possibility of Guam becom­ing a concrete jungle.

Guam has sought commonwealthstatus through a process engendered bylocal legislation. A commonwealth acthas been developed and ratified byGuam voters. This document wasagain introduced in the US Congress inJanuary 1989 as proposed legislation. Itincludes provisions that regulate fed­eral-territorial relations concerningland and resources in ways that makeGuam an equal partner. It also recog­nizes the Chamorros' right to self­determination and Guam's right tocontrol immigration. The entire pro­cess is overseen by the Commission onSelf-Determination chaired by Gover­nor Joseph Ada. Its success is highlydependent on Guam's delegate to theUS Congress, retired Marine CorpsGeneral Vicente Blaz, who must shep­herd the act through Congress.

Governor Ada's state-of-the-terri­tory address in February 1989 stressedthe self-determination dimensions ofthe act, calling it a "quest to have ourfull rights as human beings, our God­given rights recognized." He deliber­ately underplayed other facets andcriticized those who think of the com­monwealth movement as an effort toobtain more federal financial assis­tance. A much-awaited visit of InteriorSecretary Manuel Lujan in mid-Febru­ary 1989 proved to be disappointing tothose who hoped the commonwealthproposal would be fully supported.Delegation leader RepresentativeMorris Udall indicated that "substan­tial changes" would be necessary andLujan remarked that the necessary

changes were "too numerous to men­tion."

A further complication concerningthe role of the United Nations emergedin June 1989. The Commission on Self­Determination had sent signals earlierin the year that an appearance at theUnited Nations by Governor Adawould be desirable. In late May, Secre­tary Lujan declared that Guam wasnow self-governing and that the UnitedStates should stop submitting annualreports to the Committee of Twenty­Four (the UN "decolonization" com­mittee). Delegate Blaz concurred andwas subsequently severely criticized,particularly by the Organization ofPeople for Indigenous Rights, a Cha­morro rights group that had made sev­eral appearances at the United Na­tions. The debate was yet anotherindicator that an earlier rift over thecommonwealth act between the com­mission and Blaz had not fully healed.

In the meantime, the commissionhired a Washington law firm to repre­sent its interests and a public relationsfirm to publicize Guam's common­wealth efforts. The act was underreview by a federal Interagency TaskForce, and there were indications thatthe recognition of Chamorro self-deter­mination and the treatment of Guam asan equal partner in certain sphereswould be severely criticized in thereport due in July 1989.

Other federal-territorial problemssurfaced, mostly in connection with themilitary presence. The specter of Guamas a "fall-back" if a United States-Phil­ippines base agreement is not reachedfor the 1990S brought quick oppositionfrom Governor Ada. There were alsoproblems over resources, notably

POLITICAL REVIEW. MICRONESIA

water. The US Navy continued to digwells on federal property, and severalGuam senators called it "thievery." Per­haps the biggest bombshell was Gover­nor Ada's call for the return of theNaval Air Station (Brewer Field) to thegovernment of Guam to facilitateexpansion of the airport and help solvetraffic problems in central Guam. Therequest was reportedly under study.

Economically, Guam reached newplateaus. The island's billion-dollareconomy continued to be based pri­marily on tourism. In 1988 the numberof tourists exceeded half a million forthe first time. Plans for new hotels andexpansion of existing ones wereannounced regularly to accommodateand encourage the anticipated furthergrowth. Shopping centers expanded,and numerous office buildings andsmall shops were sprouting up all overcentral Guam. The economy becameso independent of federal and militaryexpenditures that Governor Adaexpressed opposition to military build­up because of its possible negativeeffect on the economy. This was a farcry from earlier times when Guam sawmilitary expenditures as the majorforce in an otherwise lackluster eco­nomic picture.

All segments of the communityoffered warnings about the social costsof rapid economic growth. Ecologicaldamage was a major concern. Ques­tions were asked about dump sites,damage to coral reefs, and the pavingover of the island's greenery. The out­cry over the lack of a master develop­ment plan continued. Despite years ofnear-unanimous concern, Tumon Bayappeared to some to have become areplica of Hawai'i's Waikiki.

155

Cultural and social issues were alsoprominent. The island's unemploy­ment rate fell below 4 percent, and fivethousand new jobs were expected overthe next few years. Accompanying thedelight over economic growth was thefear that new waves of immigrantworkers would be brought in underspecial rules. The special ability of eco­nomic development to combine changewith opportunity was dramatized by aplan for a billion-dollar resort in south­ern Guam, a rural and more traditionalsection of the island.

The conflict between developmentand community values was most evi­dent in the efforts by native rightsactivists and local leaders to stop con­struction of a Japanese-owned hotel inTumon when Chamorro burial siteswere uncovered. While archaeologistswanted an opportunity to study theremains, activists wanted the remainsto be reinterred with dignity, and thedevelopers wanted to build a smallmuseum. After a restraining order anda series of public charges and counter­charges, the activists and the develop­ers reached a settlement.

Other political and social issueswere alsd of long-term consequence.In the third year of a four-year term,the Ada administration was no closerto a promised government reorganiza­tion and even experienced problemsfilling directorships. Permanent direc­tors for the education, corrections, andpolice departments were finally con­firmed by the legislature in March andApril 1989.

Public concerns over poker-machinegambling were finally put to rest dur­ing the year. The Catholic Archbishopof Agaiia, a few senators, and a com-

, '

THE CONTEMPORARY PACIFIC. SPRING 1990

munity organization (Basta) led thefight to eliminate the machines. Provid­ing an inkling of Guam's true ability toresolve even this purely "local" issue,the US Attorney General preempted allaction by having the FBI confiscate allpoker machines in June 1988. A lawthat required federal registration ofgaming devices was suddenly enforced.In anticlimactic fashion, the GuamLegislature repealed statutes allowingpoker machines on the island in Octo­ber 1988.

ROBERT A. UNDERWOOD

KIRIBATI

Continuity of economic policy, reflect­ing a decade of government under theleadership of President Ieremia Tabai,was the central feature of 1988-1989 inKiribati. The Christian DemocraticParty led by Teburoro Tito continuedto be largely ineffective in opposing thegovernment. An emerging view amongpolicymakers was that a governmentwithout Tabai was difficult to imagine.

The continuation of past economicpolicy meant an emphasis on subsis­tence development, a reluctance to

become too dependent on externalsources of aid, and a preference forinvestments in traditional industriessuch as copra, fishing, and handicrafts.The emphasis on reducing economicdependence has led to a policy ofencouraging more privately ownedenterprise. In 1988, the Overseas Tele­communications Corporation Interna­tional of Australia entered into anagreement with the government tomanage Kiribati's telecommunicationsfacilities. Privatization of the govern-

ment-owned shipyards was proposed,and it seemed likely that other govern­ment enterprises would follow suit inthe future. However, the policy prom­ised to engender some oppositionbecause of its implications for egalitar­ian social values.

The major economic constraints in1988 were the depressed world marketprices for tuna and copra, which typi­cally account for between 80 and 90percent of Kiribati's export earnings.Copra earnings continued to beaffected by low yields resulting fromaging trees, poor soil, and adverseclimatic conditions. Governmentattempts to interest the Soviet Union inrenewing the 1985-1986 fisheries agree­ment, for the same A$2.4 million fee,seemed unlikely to succeed.

Japan already operates a satellitetracking station on Christmas Island,and the Kiribati government was opti­mistic that Japan's space agency,NASDA, could be persuaded to establisha launch facility there rather than inHawai'i, despite the lack of economicinfrastructure.

Kiribati's external relations in 1988­1989 were dominated by a deteriora­tion in relations with Nauru. The dis­pute started when Kiribati revoked AirNauru's landing rights after a pilotrecruited to break a strike against theairline failed a certification test in NewZealand. The result was a tussle overNauruans and I-Kiribati stranded ineach other's countries. The govern­ment was particularly disturbed byNauru's reluctance to allow I-Kiribativessels to pick up a group of school­children marooned in Nauru since Jan­uary 1989. The impasse was finally