Seabed Mining Offers Hope for Island Economies

COULD deep sea mining come to the economic rescue of a cluster of Pacific Island ministates under United States jurisdiction? At present, Washington provides about $600 million annually to these territories - American Samoa, Palau, Republic of the Marshall Islands, Federated States of Micronesia, Commonwealth of the Northern Mariana Islands, and Guam. And $300 million dollars move indirectly through military payrolls into Guam.

But despite the high per capita direct outlays (over $1,900 for each of the 360,000 inhabitants in the group of six) and the population's exemption from federal taxes, growth lags in all but Guam and the Northern Marianas.

These territories are preparing to embark on varying new political relationships with the US. Each has been a territory, commonwealth, or insular area administered by the Interior Department in Washington. In recent years, all have achieved a greater degree of autonomy.

Economic development lies at the cornerstone of this new relationship, say many on the islands and in the federal government. And seabed mining offers some hope for greater economic independence in the future.

Charles Johnson, a minerals specialist at the East-West Center, recently brought together seabed mining experts from the Soviet Union, US, Asia, and Europe. In the past, the quest of seabed exploration had been manganese nodules - round chunks of ore lying like gravel on the sea bed. Those riches, covering many square miles of the ocean floor south of Hawaii, were an important element prompting the talks that led to the 1982 Law of the Sea Treaty.

But there are also trillions of dollars' worth of cobalt crusts in the Pacific. Focus on the crusts - rich in several minerals - emerged with the realization that they were only half as far beneath the ocean surface (3,300 feet) as nodules. Also, research and development obstacles are no longer as great as once believed.

``We've scratched the surface,'' says Dr. Johnson. ``Even richer deposits are below the ocean floor.''

The Marshall Islands are especially well-endowed. Officials there are talking to a private consortium about exploiting the crust. Public sector consortia are interested in other Pacific regions.

At some point, Washington and the islands must agree on how to divide the potential wealth from seabed mining by determining the disposition of economic zones within the 200-mile range offshore. Actual mining, using advanced hydraulic systems, is not likely to begin anywhere for at least 10 years.

Until that time, several impediments to economic development in the islands remain. Restrictions on ownership of residential and commercial land are in force, irritating potential foreign investors. In the Federated States of Micronesia, for example, no land is sold to non-citizens. The same is true for the Palau. Legal battles on the issue are undecided in the Northern Mariana Islands.

The Pacific Island economies are based on subsistence farming, tuna fish processing, copra, and tourism. Each of the islands is at a completely different stage of development. Permitting the islands to retain duty-free access to the US will expand textile production and other light industries.

The Interior Department's Office of Territorial and International Affairs Federal is expected to announce shifts in its political policy toward the islands early this summer. It may recommend a review of federal legislation, since the islands complain that federal laws restrict commerce. The Jones Act, prohibiting use of foreign vessels for shipment of goods, is one example.