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By Michael J. Field

RAROTONGA, Cook Islands (September 14, 1997 - Agence France Presse)---While the scattered Cook Islands feel like paradise, 16 Pacific prime ministers and presidents flying in for a summit opening Wednesday come knowing that image counts for little and that, in fact, many are economic basket cases.

At least that is the message regional super-power Australia, with a lack of subtly, has delivered.

High level Pacific officials here say Canberra's hectoring, which verges on bullying, is not going down well and Australian Prime Minister John Howard will be on the mat.

The 28th annual South Pacific Forum brings together the heads of Australia, Cooks, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea (PNG), Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

The setting is pure postcard. Rarotonga is a small round island with a rugged, high and green interior, dominated by lush vegetation and the constant sound of waves on a distant reef. Leaders will take their retreat on the atoll of Aitutaki, an hour's flying to the north. Back in the 40s and 50s, in the age of Pacific flying boats, it was the international cross-road.

Their agenda includes dealing with the need to finalize a management plan for their 1.7 billion US dollar tuna fishery, settling a regional approach on climate change and debating the shipments of high level nuclear wastes from France to Japan through their exclusive economic zones.

The single biggest issue is "the Femm" -- the short-hand for "Action Plan" drawn up by the Forum Economic Ministers' Meeting" in Cairns, Australia, in July.

That meeting has caused the biggest side-show seen at a Forum in years.

At the Cairns meeting, a Canberra background paper marked "Australian Eyes

Only" was left on a table and picked up by a reporter.

It referred to the drinking problems of a number of leaders and their failed economies and it has hurt many leaders and countries.

At the end of the five country Smaller Island States (SIS) summit here Tuvalu Prime Minister Bikenibeu Paeniu said they would be tackling Howard.

"We are definitely going to raise it in the retreat and if the leaders of the (SIS) summit are not happy with the outcome of it from the retreat it may also be pushed into the Forum proper agenda."

Cook's Prime Minister Sir Geoffrey Henry said discussion would be "what

you might expect from a leader who's been hurt."

But its froth on an issue which the Cooks itself illustrates is too important to ignore.

Last year the country came close to bankruptcy and its now, under Asian Development Bank supervision, is halving its public service, privatizing as much as it can and devolving central government power to individual islands. One of the consequences is that Rarotonga now has more tourists than Cook Islanders -- and New Zealand has more Cook Islanders (who are also New Zealand citizens) than the Cooks itself.

Several of the key assets here have until recently had mortgages over them owned by Nauru. That central Pacific state is an awesome economic disaster. Strip mined of its phosphate over the last century it has been left a lunar landscape. Since independence in 1968, the mining has continued until it is very nearly exhausted while, in the last year, its leaders have learned that its 10,000 people have, collectively, managed to blow nearly two billion dollars. Now it is near default on key debt.

The Femm Action Plan saw the leaders agreeing "that private sector development is central to ensuring sustained economic growth, and that governments should provide a policy environment to encourage this."

The plan says each country should develop a strategy of reform while "identifying measures for ensuring that essential service delivery is maintained and potentially adverse social impacts are minimized."

It calls for "best practice" for public accountability based on concepts of openness with government information and public scrutiny. It calls for "open, liberal and transparent investment policies" and "free and open trade and investment."

The Forum summit is expected to adopt it, despite the harsh medicine implicit in it.

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