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Sunday, March 14, 2010

Stamp Investment Tip: U.N.T.E.A. 1962-63 Issue (Scott #1-19)

"UNTEA" is not a popular beverage, but an acronym for a UN organization which administered territory and issued stamps.

Following the recognition of Indonesia's independence by the Netherlands, Western New Guinea became the focus of a political dispute between the two countries. Indonesia claimed the territory as its own while the Dutch side maintained that its residents were not Indonesian and that the Netherlands would continue to administer the territory until it was capable of self determination. Indonesia landed paratroops onto the territory of Western New Guinea in 1961, which prompted a political crisis between the Netherlands and Indonesia. The United Nations stepped in and mediated, resulting in an agreement whereby the UN temporarily administered the territory. In May of 1963, Western New Guinea became a province of Indonesia, later known as Irian Jaya.

During the period of administration by the U.N.T.E.A. (United Nations Temporary Executive Authority), a set of 19 stamps was issued by overprinting "UNTEA" on Netherlands New Guinea stamps of 1950-60 (Scott #1-19). The basic set had a modest printing and has appeal in three growing philatelic markets (Indonesia, the Netherlands, and UN), but what makes the story even more interesting for stampselectors is that the UNTEA set had four printings, with four easily distinguishable overprint types. I've listed these, along with the quantities issued and Scott '10 Catalog Values, below:

-1962 First Printing (Scott #1-19; overprint 17mm x 3mm long; 45,000; $ 60.00 )
-1963 Second Printing (Scott #1a-19a; overprint 17.5mm x 3mm long; 108,000; $ 35.75)
-1963 Third Printing (Scott #1b-9b; overprint 14mm x 2.5mm long; 3,500; $ 178.50 )
-1963 Fourth Printing (Scott #1c, 5c; overprint 19mm x 3.5mm long; 1,500; $ 175.00 )

The third and fourth printings may seem undervalued, but there are a couple of factors which render them speculative. First, fake overprints exist (and may even exist for the first printing as well), and based upon the current values of these stamps, it generally would not be practical to spend money on getting them expertized. Secondly, the third and fourth printings may not have been "regularly issued"; in other words, they may have been produced solely for stamp collectors. Scott lists them, but questions their status.

My feeling is that while the "status question" may put a drag on the two better printings in the short run, it will diminish in importance over time. The risk of buying a faked stamp is of far greater concern, so I'd recommend steering clear of the Third Printing for now, and purchasing the Fourth Printing stamps conditional on obtaining expertization for #5c (Sc.'10 CV = $130.00), even if it seems somewhat expensive relative to the cost of the stamp. Buying #1c and 5c in blocks and getting 5c expertized would be more economical, but blocks might be hard to find.

The three relevant sources of demand for this issue are collectors of the Netherlands, Indonesia, and United Nations. With about 16.6 million people, the Netherlands is the 16th largest economy in the world, and its annual GDP growth has averaged about 2.5% over the last 5 years. Indonesia is a developing, though still poor, country of 230 million people, with an annual GDP growth rate hovering around 5%-6%. Like most emerging market nations, it faces serious challenges which will have to be addressed, including corruption and major inequities in the distribution of income. The market for UN stamps (as well as those issued by its forerunners) should grow over the very long haul as institutions of world government develop in order to take on serious (and possibly existential) problems which can only be coped with globally. Despite the present inadequacy, corruption, and ineffectiveness of the UN, I view its reform and gradual strengthening as a gradual but irresistible trend.

Furthermore, global aging trends in both the Netherlands and Indonesia should bolster the population of serious stamp collectors in both countries in the coming decades. The Netherlands' population of citizens age 60+ is projected to rise from 18.3% in 2000 to 32.8% in 2050, while Indonesia's 60+ age group is expected to almost triple, from 7.6% to 22.3%.

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