COLUMN ONE : The ‘Pacific Paradox’: Islands of Despair : The region’s good times have passed many tiny nations by, leaving them mired in poverty. Critics blame government waste, depleted natural resources.

Peter Jack held his palms to the beating sun in a gesture of despair.

“Our lives have been really hurt by logging,” Jack said. “The bulldozers have taken away the topsoil, and now we can’t grow potatoes or yams in our gardens. Life is so different than before.”

Jack is a 40-year-old subsistence farmer whose family ekes out a living on the northern coast of Guadalcanal--a Pacific island, famous as the site of a savage battle between U.S. and Japanese forces in 1942, that has slipped into impoverished oblivion.

Honiara, the capital of the Solomon Island chain, is a dusty, flyblown town with one bumpy road and 52,000 people. It is infested with a deadly strain of malaria and economically stagnant. The rows of empty shelves at the Consumers Co-op supermarket remind a visitor of West Africa or perhaps Eastern Europe before perestroika.

Less than 25% of the Solomons’ 350,000 people can read, one of the world’s lowest literacy rates. Every year, only 700 paying jobs are created while more than 5,500 people join the labor force.

This was supposed to be the Pacific Century, a mercantile age when the nations of the Pacific Rim would race ahead of the industrialized West economically. But the good times have largely passed over the hundreds of Pacific isles, leaving them mired in poverty and facing the evils of overpopulation, government mismanagement and depleted natural resources.

“Around us there swirls a maelstrom of economic growth in the Pacific Rim while the heart of the Pacific--its islands--stands still, at best going nowhere and in many cases going backward,” noted a recent commentary in Pacific Islands Monthly, a newsmagazine published in Fiji.

The World Bank even coined a phrase--the “Pacific Paradox”--to help explain why the islands increasingly are being left behind, even compared to the relatively backward Caribbean nations.

It seems a far cry from the days when French painter Paul Gauguin memorialized the Pacific islands as a place where one can “enter into Truth, become one with nature and, after the disease of civilization, life in this new world is a return to health.”

Stretching from Melanesia near Australia to the islands of Polynesia and the tiny atolls of the Marshall Islands, the Pacific isles are a crazy quilt of past and present American and European colonies. Some, such as Vanuatu, were ruled by two colonial masters, Britain and France, at once.

Many in the Pacific island states have blamed their predicament on a history of indifferent colonialism or the vast stretches of sea that make them inaccessible to tourists and investors. But even sympathetic economists note that island nations such as Mauritius and the Maldives, remotely located in the Indian Ocean, have fared much better in managing their resources and planning their economic futures.

Australia, the South Pacific’s largest aid donor, has begun to warn the islands that the days of unquestioned financial assistance are nearing an end.

“I really don’t think there is much use pouring money into a country that is not looking after its own interests,” said Gordon Bilney, Australia’s minister for the South Pacific. “We think they could do a much better job of managing their own resources.”

Bilney noted in an interview that Papua New Guinea, a former Australian protectorate whose 4 million people make it the island region’s most populous nation, has received more than $4.5 billion in Australian aid over the years. But in that time every measure of development, from illiteracy to deaths in child birth, has worsened. Largely to blame, he said, was government mismanagement.

Bilney also said that Pacific island countries last year lost a collective $100 million maintaining unprofitable “vanity” airlines, more than the combined total of aid given to the region by Australia and New Zealand. Western Samoa alone lost $20 million on Polynesian Airlines, half the country’s foreign reserves.

A demographic study of the island states by Australia’s National Center for Development Studies warned in a recent “doomsday scenario” that the region faces a doubling of its population, strains on its education systems and exhaustion of its natural resources by 2010.

“There is a concern that, if things fall over, we may well see an implosion in the region to rather distressing environmental problems and poverty that will be hard to get out of,” said Rowan Callick, a South Pacific specialist, who wrote the “doomsday” study.

The report looked at burgeoning population growth and declining economies in Papua New Guinea, the Solomons and Vanuatu. It said that with birth rates among the world’s highest and incomes declining sharply, it would be impossible to improve education in these countries; even in 20 years they would be unable to afford to offer 10 years of education to every student.

One reason the islands are being relatively ignored is their small population, totaling about 5 million people--fewer than Hong Kong. Many Westerners cling to the image of Gilligan’s Island--lush retreats where such problems as starvation and crime are remote.

But while the overall population may be small, the Pacific states’ problems are huge.

In Kiribati, for example, the atoll of South Tarawa has 24,000 inhabitants--1,354 people per square kilometer, a density 60% higher than in Bangladesh, according to the Australian study.

Other nations face dangers on a variety of fronts.

The tiny atoll of Tokelau, 1,700 miles southwest of Hawaii, faces extinction because global warming is raising the sea level and slowly inundating the land. Its 1,700 people have been trying desperately to find another country that will take them in, so far without success.

Nauru, another small atoll nation, once boasted one of the world’s highest per capita incomes because the island is made up of ancient bird droppings, which are rich in phosphates.

The country of 10,000 people once earned $120 million a year from its phosphate mine. It was so rich that, rather than pick flowers for traditional leis, residents bought plastic garlands from Taiwan.

But the mine is almost exhausted, and a trust fund set up to help support the people has been squandered on such disastrous investments as a musical about Leonardo da Vinci in London’s West End and a collapsing office building in Melbourne, Australia.

Efforts to raise money for the islands have taken some strange turns. In Fiji, Prime Minister Sitiveni Rabuka, once a hero to indigenous Fijians for overthrowing a government dominated by ethnic Indians, recently was accused of selling out his people because he approved a plan to offer 28,000 Hong Kong Chinese citizenship in return for payments of $100,000 per family to a development fund.

The kingdom of Tonga is blatantly selling its passports for about $6,000 each, largely to crooks and Hong Kong Chinese. Aside from this, the country’s economy hinges on the sale of a rare variety of squash to the Japanese market every November.

Some Pacific islands have become almost totally dependent on outside aid. Western Samoa derives 50% of its income from remittances from Samoans in the United States and Australia, while the Marshall Islands and the Federated States of Micronesia get two-thirds of their money from payments by the U.S. government.

The United States gives the Marshall Islands $50 million a year, which will drop to $40 million annually in 1997 and end in 2001. But the Marshalls continue to import almost $75 million a year in food and consumer goods, while exports total $6 million. To raise money, Prime Minister Amata Kabua has been talking about turning one of his islands into a nuclear waste dump, to the consternation of his neighbors.

Perhaps the most blatant example of economic mismanagement has been Papua New Guinea, which is rich in mineral wealth, oil and timber but is on the brink of bankruptcy because it has created hundreds of “pork barrel” government jobs while cutting taxes on the rich in half, which sent revenues plunging.

Masket Iangalio, a former minister of finance, told Parliament that the public service sector is a “disgrace and an affront to the people of Papua New Guinea,” while warning that huge deficits meant the nation was on the verge of going broke.

Logging is one of the country’s largest sources of revenue. But exports have tripled in three years, and estimates suggest that the timber will last only another 10 years.

Thomas Barnett, an Australian judge appointed to investigate the nation’s timber business, noted that companies “roam the countryside with the self-assurance of robber barons, bribing politicians and creating social disharmony in order to gain access to, rip out and export the last remnants of . . . timber.”

Ron Duncan, who heads Australia’s National Center for Development Studies in Canberra, said that while the collapse, in the late 1980s, of commodity prices for such things as cocoa and coconut products, the islands’ main exports, had been a major factor in the Pacific islands’ decline, the main problem was bad government management. Lawmakers confounded potential investors by constantly changing policies.

“The Pacific islands are at a stage where population growth means that their standard of living has fallen below what it was in the 1980s,” Duncan said. “They are going backward.”

While each country’s geography, economy and social structure differ to some degree, the Solomon Islands offers a striking illustration of the Pacific Paradox. A collection of thousands of volcanic atolls stretching over thousands of square miles of ocean, its population is increasing by 3.5% a year, one of the world’s highest birth rates.

The government can afford to provide only six years of education at nominal cost. Only 19% of the labor force have paying jobs, and the prospects for new sources of employment are increasingly dim.

Logging accounted for more than half of the Solomon government budget in 1994, but with logs being exported at the rate of nearly 1 million cubic meters a year, experts believe that the timber will be exhausted in less than a decade.

Even in the fishing business, in which fleets from Japan, South Korea and Taiwan pay a license fee for permission to catch tuna in the island group’s economic zone, the Solomons are getting shafted. Although Japan and Taiwan have been generous with aid projects, the fishing fleets pay on average 4% of the value of the catch to the government--less than half the amount they pay Australia.

The Solomons’ capital, Honiara, has grown from 2,500 people in 1950 to more than 50,000. There are frequent shortages of power and water as a result.

When the U.S. government offered to pay for the building of a new Parliament building on the 50th anniversary of America’s 1943 victory at Guadalcanal, the only contractor capable of carrying out the project turned out to be Japanese. The finished building looks a bit like a trash receptacle.

A delicate issue is the quality of the government, which has changed three times in 18 months. The last government set stringent rules on logging and laid off government workers in a bid to balance the budget. But the government of Prime Minister Solomon Mamaloni has reversed most of the actions.

Rick Hou, the governor of the Central Bank, said in an interview that the public service was far too large for a country the size of the Solomons but that cutting back was proving very hard to do.

“When they restructured the last time, they gave everyone a pay raise,” he said.

Joses Tuhanuku, who was minister of forests in the last government, caused an international sensation when he reported having been offered a $10,000 bribe by a Malaysian logging executive, who claimed that he was just following “standard procedure.”

“A lot of people have personal interests in logging,” Tuhanuku said. “The government proposes to ban log exports by 1999, but the way we are going there won’t be any trees left.”

John Roughan, a New Yorker who arrived in the Solomons in 1958 and advises the Solomon Islands Development Trust, believes that the government needs to plan for the future as a country of subsistence agriculture without many paying jobs to offer.

“Solomon politicians have a very short term to think about so it makes sense for them to make hay while the sun shines,” Roughan said. “Most of the decision-makers have been trained overseas, have seen the good life and want to replicate it here. We don’t have the resources to sustain it.”