Wednesday, March 07, 2007

Stop the Finger of Blame Chaudhry You're Unelected

Finger of blame won’t ease the pain

The revised 2007 Budget is tough to all. But the fact is we must accept it, especially with the financial and economic crisis now facing the country. As we know, the Interim Government shelved the 2007 Budget that was enacted by Parliament last year. The revised 2007 Budget, while it is projected to stabilize the economy, has brought more pain to the people of Fiji. It is a fact that the Government of the day is facing a lot of challenges brought about by the coup. The military was warned of the challenges the country would face if it staged a coup, but this fell on deaf ears and we now have to cope. The Interim Minister for Finance, Mahendra Chaudhry, said our national economic and financial state was extremely critical. Who should we blame? It is sad that Mr Chaudhry laid the blame on the ousted government. “I am forced to stand before the nation today to carry out the unenviable task of tackling the financial and economic challenges that have been with us for a long time,’’ he said.
``These challenges have been neglected for six years because of poor financial management and governance.” Is this true? Mr Chaudhry should be mindful of the fact that the people have not elected him to his present post so it may be wise for him to refrain from making such political statements. To be frank, it is totally unwise to blame the financial and economic crisis on the ousted government, as in the past five years as outlined by the Reserve Bank of Fiji, the country recorded its fifth successive year of economic growth. Inflation was low and foreign reserves were adequate. Surely this should have been mentioned, but instead, Mr Chaudhry chose to discredit the ousted government. Mr Chaudhry himself said in his address later on that Fijis economy grew at an average rate of two per cent in the past five years. Economic growth last year was 3.4 per cent. As for this year, the Macroeconomic Policy Committee, chaired by the governor of the Reserve Bank of Fiji, Savenaca Narube, forecasts the economy to decline by 2.5 per cent. Much effort has been put in by experts to come up with a Budget that will save our economy from collapsing.
Mr Chaudhry said because of the critical state of the national economy and finances, the country had reached a juncture where it could either sink or swim. It is good that Mr Chaudhry has confirmed we are not going to sink, but we will swim together. But for how long? It is a fact that we cannot be swimming together to reach the other side as some will surely sink on the way. The first to sink will be the poor and the unemployed and Government workers will follow. I am saying Government workers because of their five per cent pay cut. Government has strongly defended the pay cut but workers’ representatives see the cut as a draconian move. Let us look at the pain inflicted by the revised Budget. As from this pay week, all Government workers will receive a thinner pay package and at the same time, change their lifestyle They have to put in a lot of sacrifice. While the Government of the day has been applauded for removing the 2.5 per cent increase in value added tax (VAT), there has been no clear explanation of why the increase was put in place by the ousted government.
The debate on the increase of VAT centred around the poor and the increase in poverty. The argument seemed to suggest that the lowering of VAT would solve the problems of poverty. Let us look at part of Mr Narube’s keynote address at the Fiji Development Bank 2006 Small Business Awards on November 23, 2006. He said: “We all know this is not true. Poverty is a wide-ranging issue and solutions are complex and comprehensive. VAT is of course paid by everybody, including the poor.” Now measures have been put in place in the revised Budget, but the pain is felt by all including the poor. Whether we like it or not, we have to work with the revised Budget. We are facing a situation that is directly linked to the bloodless coup on December 5. No one had dreamt we would be faced with this financial and economic crisis To make matters worse, we also now feel the impact of the recent flooding in the west and the north. The country’s projected two per cent growth rate could not be achieved, as we now should expect the economy to decline by two to four per cent.
The political crisis has brought another dimension to the challenges. Our exports are not doing well. To make matters worse, imports are booming. And to make matters even worse, the rise in the price of oil has come at the worst possible time. Our oil imports cost four times what we used to pay some six years ago. The balance of payments therefore continues to come under pressure. This is the number one challenge that we face. Reviving exports is the key. According to Mr Narube, the only bright spot in our scenario is tourism. It has been the driving force of our economic growth since 2000. Tourism, he said, would play a critical role in our economy as it did in the 2000.recovery. We have some good news that tourism is bouncing back very quickly and we hope this continues. Without tourism, it is fair to say that the economy would have been worse off. Tourism, therefore, needs our full support while we work furiously at reviving commodity exports. We have to accept the financial and economic situation the coup has created - we cannot escape it, we are in the middle of it.
We have to move forward together with the pain of the Budget. The military should be guilty of the financial and economic crisis we are now facing. No matter what lies ahead, we should be mindful of the fact that Interim Government will only hand back democratic power when it has completed its task. As the Commonwealth Secretary-General Don McKinnon said: “At the end of the day, the responsibility of any military authority in a Commonwealth democracy is to accept the will of the people as it is voiced through their elected Parliaments and Governments.” We have to bear the pain of the revised Budget and we can only do that with sacrifice and dedication. Let us all hope the pain will not be felt in the 2008 Budget as if it is still there, we should quickly have a democratically elected government in place.

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