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HONOLULU (June 24, 1997 - PIDP/CPIS) ---Sovereignty itself is the key resource for many small Pacific Islands states. This is particularly true, says Australian National University's Dr. Peter Larmour, for those nations freely associated with New Zealand and the United States.

Speaking at Hawaii's East-West Center today, the Australian academic and development expert pointed out that issuing stamps, coins, and telephone cards --which are worth much more to collectors than their face value suggests -- make important contributions to island coffers.

Other businesses that have become possible with sovereignty are offering shipping firms "flags of convenience" --as does the Republic of the Marshall Islands-- and selling passports at high fees. Larmour noted that Kiribati alone earned AU$1.7 million last year selling citizenships to foreigners, an activity in which many Pacific Islands states now are involved.

Another popular business, benefiting from sovereignty, he said, is off-shore banking, which allows investors to avoid taxes elsewhere.

These and other business activities sometimes lead to gross and petty corruption on the part of government officials, says Dr. Larmour, but his conclusion is that there is more media attention and public concern about the subject than probably is warranted. He suggests that there is less government corruption in the Pacific than often is claimed.

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