Environment and development
in coastal regions and in small islands

Coastal region and small island papers 16

5 Changing island infrastructure

Batching plant for Palau’s Compact Road, Babeldaob




Friendship Bridge linking Koror to Babeldaob, Palau, February 2002


‘Uro Ikesakes started fishing in Airai Bay when he was a teenager, swimming side by side with his family and friends, spearing fish after fish from a bustling coral reef. Fishing in the bay was a way of life in the village. Things are different now, more than 50 years later, but not because he is any less of a fisherman. His aquablue bay, once home to a healthy coral reef, is now mud-red and home to almost nothing but algae. After a full day of fishing, his cooler is maybe half full. "We don't fish there anymore" said the 68 year-old subsistence fisherman, his crow's feet framing his wistful stare.

His is an unusual story for Palau, a small Pacific island nation with a population of under 20,000, known the world over for its natural beauty and its abundance of fish. But his is a story some officials fear could become all too common if leaders don't plan well for the future. The cause of their alarm is a multimillion dollar road project on the pristine island of Babeldaob that they say has brought Palau to a monumental environmental and cultural crossroad.

Babeldaob is the largest island in Palau. But for years, the centre of the government and population has been the much smaller island of Koror where modern infrastructure exists. The road will change that. In about two years, contracted workers are expected to lay 53 miles of asphalt to circle Babeldaob and create an enormous potential for modern development such as hotels, golf courses and new homes. For perspective, Palau's roads currently total only 83 miles. 

In Airai State, development has already begun. Along with the work for the road, parcels have been cleared for homes, for farms and for a golf course. As the land is cleared, the vegetation, which naturally holds back the dirt, is destroyed. The dirt is then washed into the rivers and streams, which carry it down to the sea. So the bountiful reef, where Ikesakes once fished, is being buried by this dirt, killing the coral and leaving the bay nearly barren of fish. Airai State is a good example of what will happen on the rest of the island if Palauans do not plan ahead, said Noah Idechong, a Palau Delegate and world-renowned environmentalist. It's high time for people to decide how the island should be developed and how much should be developed, he said. At stake is Palauan culture and the identity of its people who have so long lived in harmony with the sea and land. Without the reefs, so much is lost. "There is no time. We need to decide what we want our island to be", Idechong said. "Because if the road goes in and we  haven't decided, all hell will break loose."

But to be clear, the US$125 million road project is something the Palauans asked for. The island nation made it a condition of the compact agreement signed with the United States in 1994 when Palau gained its independence. Federal and local officials call it the Compact Road. "The road is our economic bloodline", said Kione Isechal, an engineer with the Palauan President's Office acting as a liaison with the U.S. Army Corps of Engineers as the project moves forward. "The road will be very useful for opening our island for economic development", Isechal said. "We are confident that, with proper planning, development will be done right." But Idechong points out "If you build the hotels, people will come. That's true. But how many millions is enough money for 15,000 people?" This is the vital question for Palauans because in reality a tropical island can only bear so much before the environment is severely harmed and culture lost. People also need to put a price tag on the worth of subsistence fishing and the value of culture and family bonding. "We need to start a dialogue, to start talking about what we want for Palau."

If Palau does not, the race for money and development will have no boundaries. The economy will grow, and more foreign labour will have to be brought in to meet the demand. "There are a lot of contradictions in Palau. Some people don't think that there have to be sacrifices", Idechong said. "But you can't have everything." ‘

Scott Radway, March 2002

This article describes some of the advantages and possible disadvantages of new development and emphasizes the need for public dialogue and debate prior to infrastructural development. One of the most unanimous outcomes of the opinion surveys was the overall appreciation for new infrastructural development. Almost equally widespread was the concern about economic issues such as high taxation and foreign debt. Yet very few survey respondents made the link between new infrastructure and increased foreign debt. This chapter discusses these issues as well as impacts of the vitally important tourism industry.

New infrastructure and environmental degradation

The article by Radway 2002, on the implications of building the Compact Road in Palau, opened the Small Islands Voice global forum in September 2002 and generated much debate, not just in Palau, but in islands around the world.With just a few exceptions, the respondents thought that the Compact Road was a good thing for Palau. However, most also noted the need to take into account environmental concerns.

‘I think that no matter how much we discuss the issue about the road, it will still be built. Change is inevitable, just as development is unavoidable. What needs to be done is to try and prevent as much damage to the environment as possible.’
Sina Lui, (Global forum, November 2002)

Many of the responses to the article recognized that responsibility for environmental degradation lies with native islanders (Palauans in this case).

‘A road can be a treasure as well as a nightmare. If a country is prepared with the necessary mitigative and precautionary measures, a road need not be a nightmare. Small islands appear to have an aversion to regulatory measures; we do not appreciate any form of constraint. Palau is not alone in this respect.’
Lillith Richards, Nevis (Global forum, October 2002)

In Roseau, Dominica: new 
waterfront development, right,
August 1995

cruise ship facilities, January 

Recent radio liberalization 
in Mauritius has resulted 
in private FM radio 
stations starting up, such
as Radio One (R1), which
have interactive 
programmes and a wide 
listener-ship,  April 2003

Some of the negative  impacts of 
development, such as bumper to
bumper traffic, have also  reached small
islands, Victoria, Seychelles, July 2003

‘Yes, we are very concerned about the environmental degradation from the Compact Road. However, let us not close our eyes to the very fact that some of the worst environmental degraders are Palauans themselves!! I just returned today from the inauguration at Ngarchelong. On the way, I could see damages to the environment such as the rock quarries and coral dredging. Some of these activities are not directly related to the road project, and they are also being conducted by our own local people. Sometimes it is so easy to point fingers at others, but if the people of Palau do not wish to have their land destroyed, they should be the first to protect it, not exploit it.’
Sandra S. Pierantozzi, Palau (Global forum, November 2002)

Need for new infrastructure

The appreciation for new island infrastructure was echoed in almost all the opinion surveys. When asked to name the positive changes they had seen in their island in the past 10 years, most respondents named new infrastructure as items on their list, e.g. in St Kitts and Nevis, new houses, roads, airport and hospital were named; new airport, housing, roads and reclamation were noted in Seychelles; and other islands surveyed had similar observations. Generally also, islanders wanted to see more infrastructural developments in the future, and discussion on the youth forum in particular indicated a need for the improvement of basic services.

‘On Bequia we only have clinics and one small hospital that only deals with minor casualties such as influenza, common cold, other minor problems and uncomplicated deliveries. If there are any emergencies then our national coastguard will transport the sick over to mainland (St Vincent) to get medical attention.’
Students of Bequia Community High School (Youth forum, November 2002)

‘Our hospital here in Palau only deals with minor casualties too.’
Students from Mindzenty High School, Palau (Youth forum, November 2002)

However, as always, islands are at different stages when it comes to the provision of basic services such as health care. In some of the larger islands, the situation is different:

‘With the reforms introduced in the Mauritian health sector, we are confident that our health sector is progressing. This is very important since a healthy nation depends on a healthy population and this does not exist without a good health sector.’
Hishaam Jambocus, Sookdeo Bissondoyal Form VI College, Mauritius (Youth forum, September 2003)

Economic issues

Against this background of appreciating and wanting new infrastructure, it is interesting to see that the major concern noted in all the islands surveyed was the economy. This included a variety of specific concerns: high cost of living, high taxes, less spending power, increased poverty, sluggish economy, economic stress, national debt, economic instability and foreign investment. In addition, there were a number of island-specific economic concerns, e.g. declining ‘Compact of Free Association funds,’ which are a major part of Palau’s income and scheduled to stop in 2009 after the agreement with the USA finishes; economic downturns, especially after the Economic Stabilization Programme was introduced in the Cook Islands in 1996; shortage of foreign exchange in Seychelles; and the need for banking services in Eydhafushi Island of Baa Atoll, Maldives. The general public’s priority needs are for full employment, good salaries and job security. Unfortunately these needs cannot be assured in small islands in the foreseeable future.

Economic downturns

The Cook Islands are not alone in experiencing an economic downturn in recent years. In the Caribbean, Dominica is among islands experiencing severe economic hardships in the beginning of the 21st century as banana exports fall, tourism income remains stationary and residents are called on to make severe economic sacrifices.

Often these events are caused by external changes. In the Cook Islands in 1996, the economic downturn was due in the main to New Zealand deciding it had to reduce the amount of aid it gave to the Cook Islands. In Dominica’s case, the downturn was due, at least in part, to the loss of its preferential banana market. 

Events such as the attacks on the World Trade Center in 2001 seriously impacted the 2001/2002 winter tourism season for the Caribbean, since fewer North American visitors travelled outside their country. Similarly the Iraq war in 2003 resulted in a tourism downturn in the Indian Ocean islands. Small islands with their limited, non-diversified economies are especially vulnerable to external shocks.

Oil importation is a major financial drain for small islands as they seek to 
become competitive, Rarotonga, Cook Islands, November 2003

‘Here in St Kitts, many persons are employed in factories which mainly export goods to the U.S. markets. After the September 11 catastrophe in New York, a major factory closed operations and over 250 persons lost their jobs. In a larger and more populous country, this may have been insignificant. However, because of our small size it was a major blow to our economy and society.’
Students from Verchilds High School, St Kitts and Nevis (Youth forum, September 2002)

‘After the incident of 9/11 our economy has suffered a decline in the number of tourists coming to our small island and also freezing of wages due to the drop of finances in our island.’
Students from Bequia Community High School (Youth forum, September 2002)

‘Hawaii has over 4 million visitors a year. Since 9/11 Hawaii’s economy has been hit hard with over 10,000 jobs lost. The majority of our hotels are never at full capacity; in fact they fluctuate between 20–80% capacity, with the 80% usually falling on major holidays and events. The rental car companies sold off much of their fleets due to the decrease in visitors. Stores are closing, beaches are empty, and companies are losing money. With war on the brink, the tourism industry again is suffering. Are you ready for the roller-coaster ride?’
Kuulei Maunupau, Hawaii (Global forum, March 2003)


After two major cyclones in 1990 and
1991, Samoa’s capital, Apia was
 protected with massive sea defences,
December 2000

External shocks can also include natural events such as Cyclone Heta, a category 5 cyclone which in January 2004 destroyed much of the infrastructure on Niue, and also impacted Cook Islands, American Samoa, Samoa and Tonga.

With so many small islands increasingly depending on tourism for their growth, economic uncertainty is likely to continue in the future. It would appear that islands with a more diversified economy – such as Mauritius with its five economic pillars of agriculture, tourism, textiles, financial services, and information and communication technology industry – may be better equipped to absorb external shocks and changes.


Small islands with their idyllic settings, pleasant climates and individual assets are ideal tourism destinations. Most small islands have vibrant tourism industries and tourism is likely to be an important part of island living for years to come. Yet the discussions and debates about tourism continue covering topics such as sustainability and the long term future of tourism, local versus foreign-owned properties, the benefits of exclusive five-star resorts compared to those of smaller properties. These and other issues have been extensively debated by the general public on the Small Islands Voice global forum. While there are many examples of individual success stories, Samoa stand out as an island where a successful tourism strategy has been implemented.

A tourism resort in Samoa in keeping with its surroundings, 
December 2000.

‘I am High Chief Vaasiliifiti Moelagi Jackson. I was born and brought up on the biggest island of the Samoan group, Savaii. I left the island at the age of 16 for educational reasons, and later worked on the capital island of Samoa, Upolu. In 1974, I moved with my husband to live in New Zealand with the children. After two months I found my heart was left in Savaii, so I came back with my children.


Tourism is a major industry in many
small islands, Reduit Beach, St Lucia,
April 1998

At times,
on their own
Reduit Beach,
St Lucia,
May 2001

Coming to Savaii in 1974 after a gap of 16 years, I found the island was so backward and our people were living in peace and harmony with nature. There were shops but with limited supply. There was little electricity, and no water system for over 80% of the island. There was no sealed road, although the island was beautiful and peaceful for me. There was not a single hotel on the island except one guesthouse casually run by one family. Every now and then a tourist would arrive and be directed towards my land and a half built home. I built the first hotel on the island and started business in 1976.

On the other island there were four hotels and a couple of guesthouses. Now tourism is one of our country’s main revenue earners. Still 95% of the tourism industry is locally owned. Our government is encouraging investors to the island, however, we locals have worked hand-in-hand with government to lay down the rules which result in low-key development which is handled locally. Still 81% of our land is traditionally owned with the rest either owned privately or by government.

A lot of the control is to do with having two organizational structures working hand in hand. Firstly there is our traditional structure, the Matai System or Chiefly System selected traditionally by individual families, and secondly our democratic government selected by the people. Therefore the system has an internal workable control. Please do not make a mistake to think that we have no problems. Our main problem is to voice our concern and see that the government listens to us.’
(Global forum, April 2003)

By contrast, another writer to the same forum described a different picture.

‘Here in St Vincent and the Grenadines we had a problem when the former government leased three quarters of one of our islands to a large company who said that they would spend 450 million dollars to develop that part of the island. A resort was developed that provided work for some of our people, but by far the company profited the most. The government collected about US$ 4,000 a year for the lease. There was trouble and local inhabitants were stopped from going on beaches when the hotel guests were there and sometimes even when they were not there. Visitors were made to feel unwelcome. The hotel hired security guards from Europe, court cases were filed, roads were blocked and no one benefited. The project is now (March 2003) at a halt for 14 months. Our governments must be more responsible to their people on whose behalf they make decisions.’
Peter Jacobs, Mustique, St Vincent and the Grenadines, (Global forum, April 2003)

Tourism covers all facets of island life.While the industry certainly provides jobs for islanders, the more sought-after professional and white-collar jobs often go to expatriates (see Chapter 4). One of the dilemmas many islands face is – how much tourism is enough? And who benefits from tourism? One of the discussion themes on the Small Islands Voice global forum ‘Foreign investment in Cook Islands’ focused on this very issue and proposed that once full employment is achieved, the benefits of foreign investment go down and the costs and problems go up. Some islands have established upper limits for tourism development, but how often are these targets adhered to? These questions and more are discussed by a contributor to the global forum:

‘Our problems in the Turks and Caicos Islands are similar to those in the Cook Islands. Our beaches have become congested with million dollar condominiums, built by foreign workers (since we don't have enough people to provide the necessary labour force) for the foreign rich. Meanwhile our schools have become over populated with the kids of those brought in to build these so-called major developments, and it becomes the Government, i.e. the locals, who has to bear the cost of maintaining these schools.


Large scale, modern tourism
development, Providenciales, Turks
and Caicos Islands, July 2001

These developers are given duty-free concession, when our roads and other infrastructure are in a deplorable state and our Government is forced to borrow money at market rates to repair and replace the dilapidated state of our infrastructure. 

The critical question is who benefits from the so-called progress? How is it justified that those wealthy few who could afford to pay the import duties, land taxes, etc., get tax exemptions when the locals have to face constant increases.

Here in the Turks and Caicos Islands, land prices have gone from around US$7,000 for a land lot to now US$20,000 a lot in most areas; of course, forget beachfront properties at an average price of a million dollars an acre. Prices in the food stores have grown astronomically in the last five years. At the same time, salaries (forget minimum wages which have never made sense at US$4.50 per hour) increase by less than 10%. How is the average local single mother of two to take care of her children when she has to pay rent and shop at the foreign-owned supermarket at these ridiculous prices?

Small scale, traditional
style tourism 
development, Grand 
Turk, Turks and Caicos
Islands, November 1999

I'm truly of the belief that we as a country should revisit these development plans, mindful that several are under construction and in planning stages. There should be a clear policy of having these developers set aside funds for the maintenance of our schools, infrastructure and of course the burdens these immigrants place on our social services. We should discontinue the granting of duty free exemptions and concessions, as we have already reached the point of diminishing returns. There should be business opportunities for locals and funds available to borrow for assisting in establishing these businesses. There should be a limited number of work permits that will be granted to any one employer and in any category. There should be a clear policy for locals to be given equal opportunities to compete at a white-collar level for all job opportunities in the country.

Then and only then should we be boasting of the success and growth of our country as we would be able to identify locals who are products of the system, designed to foster development where it truly matters.’
Anthony Garland, Turks and Caicos Islands (Global forum, June 2003)

The majority of contributors to the global forum agreed that particularly in outer islands, small scale, locally owned tourism development is to be preferred. Examples were discussed from the Family Islands of The Bahamas (Abaco), the Outer Islands of Cook Islands (Aitutaki), and the San Andres Archipelago. One contributor proposed some fundamental principles for development in small islands:

‘An asset exists, either nature or buildings, which could be used to generate incomes to sustain island life. But how can that be done without destroying island life? I would propose three fundamental principles:

Ilan Kelman (Global forum February 2004)

Concluding comments

Undoubtedly there is much more to be said on these topics in small islands and the above only represents a snapshot of the general public’s perspectives. However, it is important to keep in mind that economic concerns are the most important issues for people living in small islands and will likely continue to dominate the stage for years to come.



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