Thursday, February 01, 2007

Fiji Coup Costly

Civil servants not spared the rod
But just a reminder to the unions and their members: they should be mindful that we now have a government that inherits it political power from the barrel of a gun - so follow its plans
By MAIKA BOLATIKI Political Editor - www.sun.com.fj, 7 February, 2007

The political situation in Fiji is not very healthy.This is because members of the global family of which Fiji is a member, have jointly condemned the removal of the Laisenia Qarase-led democratically elected government by the military.Even though we now have an Interim Government led by Interim Prime Minister Commodore Voreqe Bainimarama, the global family stands by it stance against Fiji.All they want is the return of democracy.The political instability has a negative effect on our economy.We now have a very weak economy, something the Interim Government has to address very quickly.At the same time, however, we must applaud the government of the day for quickly reacting to salvage our economy.Already it has put in place plans for economic growth.In its recent Cabinet meeting the Government had agreed to an additional $3.8 million to the Fiji Visitors Bureau to fund the marketing recovery plan of the tourism industry.This will be in addition to marketing funds already provided in the 2007 Budget. The additional funds will be allocated through the normal budgetary process.Interim Minister for Tourism, Mrs Bernadette Rounds Ganilau. Says: “There is a need to aggressively promote now to be able to sustain our visitor arrivals, foreign exchange earnings and employment levels by the next tourism seasons of March to October. The target for visitor arrivals for 2007 has been revised down to 514,000 with an estimated tourism receipt of $888.1 million.”The additional funds are to aid a quick recovery that is more intensive than the 2000 strategy.In addition to the Government’s plan to improve our economy, there are other measures now in the pipeline and one of them is to cut government costs.This will not be popular especially among civil servants.They are not going to be spared the rod in the move to recover our economy.It is a well known fact that when Interim Ministers were appointed by the Interim Prime Minister and Commander of the Republic of Fiji Military Forces, Commodore Voreqe Bainmarama, they were given specific terms of reference to be achieved in 12 months.One of the terms of references for each Interim Ministers is to carry out investigation on corruption.Another is to cut costs.The Interim Minister for Public Service and Public Sector Reform, Poseci Bune, has received instructions to slash civil service costs by $70 million.It is a tough call but because we now have a government that inherits its political power from the barrel of the gun, it has to be achieved.Civil servants had been told they would not be paid their cost of living allowance (COLA) Permanent Secretary for PSC Rishi Ram officially relayed this information to the Confederation of Public Sector Union (CPSU) secretary Rajeshwar Singh.The public sector unions had signed an agreement with ousted Prime Minister Laisenia Qarase last year that include COLA arrears to be paid include $9m - 20003; $16m - 2005; $18m - 2006; and $18m for 2007.Mr Ram said the Government had totally withdrawn that agreement as it just could not afford to honour itThe Fijian Teachers Association and the Public Employees Union (PEU) are totally against the decision.FTA president Tevita Koroi said the government of the day should honour the agreement signed by the ousted government.PEU secretary general Pita Delana said the agreement they reached with the ousted Prime Minister was a 4 per cent across the board payment 2005, 2006 and 2007. - 2 per cent payment across the board Jan 1, 2006 and 2 per cent merit payment 2004 Jan 1, 2005.All these are now down the drain.Another measure that the Interim Government is now looking at is to lower the retiring age from 60 years to 55.This move will save the nation $10 million but close to 3,000 established and unestablished civil servants will be without jobs Fiji Public Servants Association general secretary Rajeshwar Singh revealed the figure to Mr Ram in their meeting on Monday.All unions except for the Fiji Teachers Union are totally against the move.About 900 teachers would affected and Mr Bune said this would create 900 employment opportunities in the profession.The Interim Minister of Finance, Mahendra Chaudhry, has announced that there is a possibility of a 5 per cent pay cut for civil servants when the new budget is announced in March.Civil servants should now brace themselves for the pay cut, as it will be implemented as a means of economic recovery for the Government.Some civil servants experienced the same after the 1987 and 2000 coups.I must admit that it will be very painful for these honest workers.It is now time that families and individuals made plans to re-adjust their budgets to accommodate the forced pay cut.In 1987 the pay cut was implemented in September, four months after the coup.In 2000, the 12.5 per cent pay-cut order came in around July, two months after the May 19 coup. It also included ministers in the then interim government led by Laisenia Qarase. Now the pay cut is as early as March only three months after the coupThe pay cut will have effect on the business community as people will spend less and the economy in general will contract.The CPSU is totally against pay cuts and likewise other unions.It is a fact that civil servants are now used to solve Interim Government financial woes.It is a harsh decision and the Interim Government has also to accept harsh actions to be taken by the workers affected.The pay cut will have a lot of social impacts.The pain of the clean up campaign has touched the hearts of most of the people of Fiji.It is a fact that we now have to face the hardship of the clean up campaign in the next five years.The government of the day should prepare for a trade union backlash.Unions around the country will not want their members to suffer from the planned pay cuts and the lowering of the retirement age.But just a reminder to the unions and their members: they should be mindful that we now have a government that inherits it political power from the barrel of a gun - so follow its plans.We must have patience with the new leadership. My advice is just to sit back and wait for an expected outcome without experiencing anxiety, tension, or frustration. It is a time that we must have the courage to fight off the social impacts that will be part of the government plan.
Coup may prove costly for Fiji: research Thursday February 01, 2007
www.fijilive.com -01 Feb 2007

A New Zealand research house says the latest coup in Fiji will be costly, particularly to the country's poor, but may be worse for the economy if it fails. The New Zealand Institute of Economic Research says the military coup in December was likely to cause long-term harm to the economy, deterring visitors and prompting the departure of professional and skilled workers, if the 2000 coup was anything to go by. It took four years for tourist numbers to properly recover, implying the loss of about 450,000 visits between 2000 and 2003. "But this is only a relatively short-term and partial view of the economic effects of the earlier coup," the institute said in a monthly report. Aside from the 39 per cent fall in visitor arrivals after 2000, there was also a 33 per cent fall in investment, a $F36.6 million increase in private transfers abroad as Fijians left the country, and a 3.5 per cent increase in the real interest rate. Slightly offsetting that was a nearly 10 per cent rise in government expenditure. Wages, exports, gross domestic product and national welfare were also dented significantly. "In other words, the effects were profound but, predictably perhaps, the poor will have suffered the most. "Although it is too early to be certain, the effects of the 2006 coup are likely to be qualitatively similar, because the external and internal shocks are likely to be the same." Previous research found that in Africa, abortive coups had a bigger effect on economic growth than successful ones. "Thus, although a failure of the current coup might be preferred for other reasons, the interests of economic recovery in Fiji could conceivably be better served by a successful coup," the NZIER said. Army Commander commodore Voreqe Bainimarama was sworn in as Fiji's leader on January 5, a month after seizing control in an armed coup. He has dissolved Parliament and banished elected Prime Minister Laisenia Qarase. New Zealand extended sanctions against Fiji on December 6, suspending aid and banning sporting contacts and visits from Government members.

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