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EDITIONS
Thursday, 15 November, 2001, 16:34 GMT
Niue's astronomical economic plan
The tiny Pacific nation of Niue plans to launch a communications satellite which it hopes will reap millions of dollars.

The cash-strapped government is looking for an alternative source of income after the US imposed trading sanctions in January because of Niue's tax haven status.

Prime Minister Sani Lakatani
Lakatani: There'll be lots of money
The five-year $300m project will create jobs for the island-state's inhabitants and "it will not cost Niue anything", said Prime Minister Sani Lakatani.

"The Niue satellite use can be leased out ... There'll be lots of money in the future," he said.

Call centres would be set up on Niue to receive satellite communications.

" We have 440 public servants. Half of them may go to the new IT business," he said.

Niue, home to about 2,100 people, lies between Tonga, Samoa and the Cook Islands and is the world's smallest self-governing state.

Astronomical aspirations

The scheme is similar to TongaSat, a lucrative satellite business established by Niue's larger South Pacific neighbour.

The satellite will be built and funded by an as yet unnamed US partners and launched into a geostationary orbit.

Niue expects to receive 35% of the profit, with 15% going to consultants and the rest to the satellite's makers.

Mr Lakatani expects a report next week from an adviser on how the satellite would be manufactured, launched and positioned.

US sanctions

Earlier this year, the US reportedly imposed sanctions on Niue because of links to Latin American tax haven operations.

Niue licenses six offshore banks, operating in Australia, which the Organisation for Economic Cooperation and Development (OECD) is trying to close down.

Mr Lakatani said the action would be "like cutting the throat of Niue."

Niue has reportedly given a Panamanian law firm the exclusive right to register businesses in exchange for about $1.6m a year, which is a substantial portion of the government's budget.

Niue's budget in 2001 is expected to be about $2m.

See also:

17 Aug 01 | Business
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22 Jun 01 | Business
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