TIMES are changing in the Falklands. Until ten years ago, residents of this clutch of windswept islands in the South Atlantic suffered near-feudal conditions to make a living from grazing sheep on poor pastures. Now the streets of Stanley, the tiny capital, are lined with four-wheel drive vehicles, and homes are stuffed with fax machines, testament to the riches that lie offshore. Britain鈥檚 most famous dependent territory 鈥 the size of Ulster with the population of an English village 鈥 has grown wealthy by selling licences to foreign fishing boats to catch squid in its waters. But the boom times may already be coming to an end.
The South Atlantic has had probably the biggest squid fishery in the world over the past ten years, supplying up to 10 per cent of the worldwide catch. At the height of the season, from March to June, more than a hundred large squid-fishing boats have worked off the Falklands. Catches of the big money-spinner, the Illex squid, reached 220 000 tonnes at their peak in 1989, with a value in the markets of Korea and Japan of more than $300 million.
The Falklands government鈥檚 income from selling licenes for this bonanza peaked at 拢30 million a year. Fish money has built a lavish new school and hospital in Stanley. It has bailed out a string of disastrous enterprises set up after the war by the Falkland Islands Development Corporation. And it is currently constructing the first roads across the two main islands. Meanwhile, the Falklands鈥 Treasury has amassed reserves of over 拢120 million, a healthy 拢50 000 for each of the 2200 residents.
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Like some oil sheikdom, the country barely has to dirty its hands. At times, there have been 10 000 people working in Falklands waters on 鈥渏iggers鈥, large vessels that play out numerous hooked lines and attract the squid with powerful lights. But none of them were Falklanders and virtually none of the fish is ever landed at Stanley. 鈥淚t鈥檚 hard, uncomfortable and badly paid work on the boats and we have no tradition of fishing,鈥 explaiend John Birmingham, a member of the Falklands legislative council. 鈥淲e leave it to Spaniards and Chileans.鈥
But a fishing community of sorts has sprung up around Stanley. Sitting beside Birmingham is fellow councillor John Creek, a former telephone engineer who set up Fortuna, a highly successful company that provides shore services (such as the Falklands address necessary for some fishing licences) for Far Eastern fishing companies. 鈥淭he fishery has brought big social changes,鈥 he says, 鈥渨ith a redistribution of wealth and power from farming to the fishing community.鈥
Boom and bust
Nice work if you can get it. But there is one problem: the party appears to be over. Catches of Illex in Falklands waters have crashed in the past two years to less than a third of their 1989 peak. Profits to the government from selling fishing licences were below 拢15 million last year and are expected to continue falling.
What has gone wrong? The Falkland government鈥檚 scientific advisers at Imperial College in London insist that there is as yet no proof of a long-term downward trend in catches. 鈥淭he stock is naturally very variable because the animal only lives for a year. It could just be that we have had two bad years,鈥 explained Geoff Tingley at Imperial鈥檚 Renewable Resouces Assessment Group.
But nobody in the Falklands believes that. They blame the Argentineans for catching too many young Illex early in the year before they mature and migrate south into Falklands waters in March. Without doubt, the slump in Falklands catches mirrors a dramatic increase in catches in Argentine waters (see Graph). The Argentineans counter that they are taking no more than they are entitled, and that the Falklands should not be so greedy.
In theory, Illex stocks are protected by hard science and hard diplomacy under the South Atlantic Fisheries Commission, a body set up in 1990 which brought together Britain, the Falklands and Argentina. The commission relies on the team at Imperial and on the Argentinean research institute INIDEP at Mar del Plata in Argentina for basic research and stock monitoring.
At the Falklands fisheries department, operating from an old military dock on the outskirts of Stanley, data about the catch is collected daily and sent electronically to Imperial College for instant analysis. The department鈥檚 cheif scientist Conor Nolan, says it was this analysis that persuaded the three countries to shut the fishery early last year to ensure that 40 per cent of the adult Illex escaped capture until the June spawning. This month, as the progeny of last year鈥檚 survivors begin to move south towards the Falklands, a joint research cruise will find out how successful this has been.
But the truth is that nobody really knows what a sustainable harvest of Illex is. There is too much natural fluctuation. Nolan admits: 鈥淲e cannot model the effect of the Argentineans increasing their catch. It may be that it coincided with a surge in the Falklands current, which damaged recruitment.鈥 One vital future task, he says, is to include oceanographic changes in stock models. Nor does anyone know how much fishing for Illex takes place on the high seas outside either nation鈥檚 jurisdiction, where part of the stock spends the early months of the year.
Nobody can say whether Falklands catches will recover in the next few years. But the omens are not good. The history of Illex fisheries worldwide is of boom and bust, according to Paul Rodhouse, the British Antarctic Survey鈥檚 squid specialist. The North Pacific Illex fishery off Japan crashed in the early 1970s and is only now beginning to recover. In 1972, Japanese boats moved to the North Atlantic to catch Illex off Newfoundland. A decade on, that stock also crashed and 鈥渟hows no signs of recovery yet鈥, says Rodhouse. That was when the Japanese 鈥 with Koreans in their wake 鈥 moved into the South Atlantic to catch Illex argentinus. Now the pattern seems set to repeat itself.
Second string
There is another Falklands fishery. The Loligo squid live their entire lives within Falklands waters, though they are fished almost entirely by Spaniards to supply their market in Vigo in northwest Spain. Last year for the first time, the volume of the Loligo catch exceeded the Illex catch, and it may soon be the Falklands biggest source of income 鈥 provided it too doesn鈥檛 crash. Pessimists, however, already see warning signs. The Loligo catch fell by more than a third in 1993, probably because of recruitment failures caused by changes in ocean currents. But it has since recovered strongly.
What happens to the Falklands when the squid bonanza is over? David Tatham, governor of the Falklands until the end of last year, warned in his last annual report: 鈥淲e may be facing a period of declining Illex stocks and reducing income. Payment from our investments will, or should, provide a financial life belt to keep us afloat.鈥 Beyond the investment income, there are two hopes: that world wool prices will recover from current low levels, and that prospecting for oil off the Falklands, which is due to start later this year, will yield a new bonanza.
Oil would be a real replacement for fish. Lots of cash for relatively little effort. A survey by the British Geological Survey has suggested that there could be as much oil in the waters off the Falklands as in the North Sea. Bids are currently open for the first round of prospecting, and rigs could be drilling by early next year with the first oil coming ashore early next century.
Until then, at least, Falklanders will have to look onshore again for their income. The chief executive of the Falklands government, British businessman Andrew Gurr, says that 鈥渇ish income may come and go, likewise oil, but the land is the only banker we have鈥. Until a decade ago, wool was the only export income for the Falklands. Today, output remains as high as ever at about 2500 tonnes, more than a tonne per person, which is sold to merchants in Bradford and used in everything from Wilton carpets to Italian sweaters. But the export value of the wool has been in almost continuous decline for 60 years, and currently brings in just 拢3 million a year 鈥 in real terms less than a half the income of a decade ago.
Equally seriously, there are questions about whether many new-generation Stanley slickers will be willing to go back to the land. Since the mid-1980s, primed by fish money, the population of the capital has grown by more than half. Meanwhile, the rest of the country 鈥 known as the Camp 鈥 has become one of the most sparsely populated habitable areas on Earth. A census due this year is likely to reveal that 鈥 leaving aside the soldiers on four-month duties at the Mount Pleasant garrison 鈥 fewer than 500 people inhabit the bleak, largely roadless and entirely treeless land that stretches beyond Stanley. Even Mongolia, outside its capital, is twenty times more populous.
Ironically, the exodus has been accelerated by government efforts to revive the Camp economy since the Falklands conflict. During the 1980s, the government took the great sheep-ranching estates out of the hands of their expatriate owners, broke them up into smaller farms and sold them to both locals and outsiders. These land reforms wool productivity by a fifth, as individual farmers struggled to make a living in a depressed wool market. But at a great cost. Many farmers moved to their own tracts of land and could not afford to employ the estate carpenters and shepherds or to keep up the settlement stores and schools. As a result, the Camp is littered with partly abandoned settlements, their houses and farm buildings empty and crumbling.
One of the main ideas behind the land reforms was to encourage farmers to diversify away from sheep. But so far, apart from a few tourist lodges near colonies of penguins on the more remote islands, little has changed. Gurr admits 鈥渢he land reforms were largely a failure鈥. Prompted by what he describes as 鈥渇reemarket dogma鈥 imported from Britain, they were meant to repopulate the Camp, but they had the reverse effect. 鈥淭hey were supposed to trigger innovation, but they have ossified the system,鈥 he says. 鈥淲e have to find new ways to encourage economic development and diversification if many of these farms are to survive.鈥
The response of the Falklands agriculture department has been a plan to introducing a new national stud flock from New Zealand 鈥 to bring in higher quality fleeces and more productive sheep. Gurr鈥檚 answer is more radical. Heretically, he wants continued government control of land. From his offices on Thatcher Drive in Stanley, he argues that privatisation 鈥 the central plank of policy on the islands since 1982 鈥 must be jettisoned. In a recent discussion document, he wrote: 鈥淚t is against the public interest to allow free reign to market forces. To do so will create inequity [and] inhibit the evolution of the rural economy.鈥
Gurr proposes that the last and largest surviving estate still in public hands 鈥 the old Falkland Island Company holding of Lafonia comprising the southern half of East Falklands, some 30 per cent of the entire country -should not be sold off. Instead, the government should keep most of the area to 鈥渟et an example to the private sector鈥 by carrying out the kind of experiments in land use and investment that individual farmers are unwilling or unable to make.
Gurr鈥檚 plan has created an outcry. Even Tatham, the outgoing governor, complains that 鈥済overnments can鈥檛 innovate鈥. But Gurr is determined.
He wants rapid and large-scale economic diversification. He wants to market wool products. This year, the new Falklander sweater, made at a wool mill at Fox Bay, will be launched at Britain鈥檚 National Exhibition Centre in Birmingham. He wants cattle ranching 鈥 widespread in the 19th century but now seen by Falklanders as an alien South American business for gauchos 鈥 behind solar-powered electric fences.
Already the development corporation is funding a new dairy and an abattoir to produce mutton and beef to health standards acceptable to the military base at Mount Pleasant. Currently, tens of thousands of sheep are culled each year, and their corpses thrown over cliffs because there is no demand for the meat. Yet, at the same time, says Gurr, 鈥2000 servicemen here are fed with meat raised in Uruguay and shipped here via the UK.鈥
He wants more market gardening, goats, coastal fishing and to boost the number of tourists from the mere 192 who visited last year. And, as a former timber company executive now running a treeless country, he wants to plant forests of lodgepole pine. 鈥淭rees don鈥檛 belong here,鈥 scoffs Mike Summers, head of the development corporation. 鈥淭hey grow too slowly in this climate,鈥 says Tatham. But Gurr has invited Scottish foresters in to offer advice.
He believes time may be short, and thinks that Falklanders have not yet woken up to just how dependent they have become on the government鈥檚 fish revenues to subsidise their newly affluent lifestyles and to keep their farms in business. The air service, for instance, maintains regular flights of 9-seater Islander aircraft to 39 Camp air strips. It loses some 拢400 000 a year, or 拢60 for every passenger-journey. Some airstrips now only serve one or two households. New roads planned to reach the main surviving settlements will costs tens of millions of pounds.
On the Falkland Islands, even basic technologies don鈥檛 come cheap. Upgrading the existing local phone system for the 200 phones in the Camp, agreed last autumn, will cost more than 拢7000 per phone. Meanwhile, public funds must stretch to hospital and fire services capable of coping with a major disaster if the regular Tristar flight from Britain should crash land at Mount Pleasant. And there would be an outcry if other expensive services were cut. At present there is a police officer for every 130 people and a teacher for every eight pupils.
Gurr has two visions of the future for the Falklands 鈥渁fter the squid鈥. In one, the government promotes change and the unspoilt islands become a rural idyll with fields, forests, sheep and electronic villages peopled by artists, philosophers and writers from round the world. But in the other, the wool market fails, the oilfields prove uneconomic and most of the islands are abandoned to the wind and the peat. Even the Argentineans lose interest.