Monday, December 17, 2007

POLLS TO BE DEFERRED?

Either that or the People's Charter an exercise in futility

Samisoni Pareti - December 2007
Postponing the general election to mid-2009 or even early 2010 is still a possibility if the interim government is to enact its much-touted People's Charter.

Such a proposition cannot be ruled out altogether given the insistence by interim Prime Minister Frank Bainimarama that a charter needs to be put in place before a general election could be held.

This is how it's going to be... Archbishop Petero Mataca, co-chair of the People's Charter, and Women's Minister, Laufitu Ekari Malani.
A delayed poll was not denied by senior interim government ministers and officials FIJI BUSINESS contacted during the past weeks.

While none was bold enough to be named for this article, these interim administration members agreed with the magazine's calculation that there is not enough time to implement the charter if the election is still to be held by March 2009.

It also confirms what overseas-based diplomats suspected right from the day Bainimarama made a promise to the members of the Pacific Islands Forum in Tonga last October that polls would be conducted by the first quarter of 2009.

"I wonder whether in wanting to produce a People's Charter and by committing to an election by the first quarter of 2009, someone in the Fiji Government had made the calculations in terms of the timeline," an overseas diplomat based in Suva, who asked not to be named, said.

"As it is, from the time the Constituency Boundary Commission starts work on the boundaries to polling date, the country will need at least eight clear months as there are several statutory requirements that must be observed.

"But if the People's Charter will be ready by October 2008, that leaves only five months for the committed election period of March 2009. What then will happen to the interim prime minister's desire to hold a one-man-one-vote system, a common roll, and common boundaries for all? There's just not enough time."

Permanent Secretary in the Prime Minister's office, Parmesh Chand was not keen to comment on the matter when approached last month at his office on the fourth floor of the new wing of Government Buildings in Suva.

He did say, however, that the poll date of first quarter of 2009 was actually the suggestion of a team formed under the working committee of the Pacific Islands Forum member countries.

"The European Union seized the timeline, then the Commonwealth, and now it's been reinforced by the Forum leaders," said Chand.

"You would recall that in one of his first public statements on the matter, the prime minister had wanted the elections to be held around May 2010.

"He had done that because we had wanted to accommodate the work on the People's Charter."

According to the proposed timeline on the People's Charter for change and progress, a draft of the charter should be ready by July 31, 2008.

Formulation of the draft would be done through an intensive consultation programme that will also see the production and discussions of issues and discussion papers as well as a state of the nation and economy report.

Through the help of international organisations including the Commonwealth Secretariat, the interim government also hopes to form a panel of eminent persons.

Members of the international community will form the panel.

The plan is that when the National Council for Building A Better Fiji co-chaired by Bainimarama and the head of the Roman Catholic Church in Fiji, Archbishop Petero Mataca holds its scheduled fourth meeting on August 11, 2008, members of the panel of eminent persons will be in attendance as well.

According to the timeline, they hope to have the draft charter ready for the president Ratu Josefa Iloilo by October 8, 2008, with the referendum on the document pencilled in for either October 10 or October 15.

The dates are mere proposals, government officials have pointed out, and it will be for Bainimarama and Mataca together with the members of the council to work out the actual timelines needed for the production of the charter and the holding of elections.

Also needing a firm decision will be the objective of the proposed referendum, as it could be either to seek the people's endorsement of the charter, or the types of constitutional changes that would be required to implement the provisions of the charter.

These could include suggestions like a common roll, abolishing the present constitutional requirement of communal seats and boundaries.

If the charter would indeed propose changes to the electoral system, it would therefore mean changes to the electoral boundaries as well, a process that constitutionally would require a good 11 to 12 long months to implement.

As it is, the report of the Forum's independent assessment of the electoral process in Fiji estimated that from the census night on September 16 to the public release of the provisional boundaries, a good seven months would be necessary.

Following objection periods, counter objection periods and other statutory requirements, another four months would be required before the Constituencies Boundary Commission could issue the final boundaries.

Even the appointment of the commission's chair is being held up following the resignation of the first appointee and the illegality that surrounds the appointment of a replacement.

And once you change the boundaries, the voter registry automatically needs changing too, and once changes are done, the law requires the observance of certain timelines as well.

The timeline produced by the Pacific Islands Forum independent assessment team gave the process a good five months.

Another difficulty officials admit is the legal status of referendums as the 1997 constitution is silent on the matter.

Furthermore, using a new electoral system may run foul of the conditions agreed to by Bainimarama at the Forum meeting in Tonga in which he had promised to hold elections "according to the constitution and current laws of Fiji."

If postponing elections in early 2009 will be deemed a hot political potato because of the huge outcry it would cause in the international community, Bainimarama may very well shelf the implementation of his charter.

He even has the option of making the proposed referendum run piggy back on the March 2009 general elections, whereby ballot papers will not only ask voters' preferred candidates but also their views on the charter itself.

However, there seems to be a general consensus even among some members of his interim regime that adopting a people's charter and holding a March 2009 elections simply do not go together.

There isn't just enough time. And perhaps money as well.

Interim finance minister Mahendra Chaudhry gave the initiative $400,000 in his budget address on November 23.

But the money is only to kick-start the work on the people's charter for change and progress, especially in the formation of its technical and administrative support secretariat (TASS), which is to operate out of the parliamentary complex in Veiuto.

The office of the prime minister began advertising for a head of TASS in mid-November, specifically calling for those holding post-graduate degrees in either economics, commerce and international relations.

The head of TASS will sign a 12-month contract and will be assisted by three coordinators as well as the head of its public relations and media team.

Seeking international funding could be a challenge, as several countries like Australia and New Zealand had initially expressed reluctance in contributing to an exercise they believe is left best for an elected government to pursue.

Ousted prime minister Laisenia Qarase's Soqosoqo Duavata ni Lewenivanua Party holds the same view, so as the National Federation Party and other organisations like the Fijian Teachers Association.

It is a matter of speculation too whether Bainimarama had indeed gone to the Tonga Forum appreciating the full implications of a first 2009 quarter poll.

Some diplomats felt his address before the United Nations General Assembly in early October this year could have given him some false sense of hope, in the belief that all that was required of him was a prepared speech, a passionate delivery and await the accolades.

"Frank Bainimarama won a few kudos by attending the Leaders Meeting," said a seasoned diplomat who spoke to FIJI BUSINESS on the condition of anonymity.

"Kudos will remain and more respect will be gained if he delivers on his commitments.

"Needless to say, should he renege on his commitments, all those kudos and respect will be irreparably shattered."

The leaders meeting, this analyst said, is a lot more demanding.

A leader needs to converse and dialogue both formally and informally, he added.

"More so, he or she will need to interact in meetings, not just to read prepared texts.

"The leader will need therefore to be well briefed and to be conversant with the issues.

"He or she may not grasp the technicality of all issues.

"But that is where officials come in to help."

It could be established that even before interim Attorney-General Aiyaz Sayed-Khaiyum sat down in his Nuku'alofa hotel room to polish the commodore's address to the leaders at the retreat in Vava'u the next morning, the decision had already been taken for Fiji to re-commit on an early 2009 election date.

Fiji journalists who were in Tonga for the Forum said by the evening of October 16, Bainimarama was already telling them that he would use the retreat the following day to announce his intention to hold elections by early 2009.

Some aides of Papua New Guinea's Prime Minister said that commitment was made a few days earlier, when Somare met Bainimarama at a resort near Fiji's international airport in Nadi.

Political commentators say in committing to a general elections the Fijian military leader had dug a hole he would have great difficulty extricating himself from.

He would have a fall back plan had he opted to stay away from the Forum, these analysts believe.

Bainimarama could have sent his foreign minister Ratu Epeli Nailatikau to the Tonga Forum for instance, and if a commitment to a general election was then made, he could conveniently said afterwards that the promise to go to the polls wasn't made by him personally.

"This is the challenge he faces," another diplomat told this magazine.

"He gave his commitments, whether he was put under pressure or not.

"Already, he is talking about constitutional changes and the People's Charter, preoccupations of which will make him derogate from his commitments at the Tongan meeting.

"He will know that if he reneges, history will write him off as a non-event.

"He will want to leave behind something Fiji will remember him by. Reneging on his commitment will not be one of those."

This diplomat said that if he were Bainimarama, he would be studying all his options right now.

He will want to do the right thing.

The longer the army commander stays in power, the more he wants to be a statesman.

He will want to deliver on his commitment.

"He will probably want for example to take the recommendations of the People's Charter and its recommendations on the constitution to the new parliament, and that clears the road to a general election as indicated.

"On the other hand, he may just throw his hands up and to hell with trying to be a statesman.

"He just reverts to the obnoxious character that we saw emerging from the barracks last December, never mind the commitments and what they mean and represent.

"Never mind a clean page in Fiji's history!"


Viewpoint: A YEAR ON AFTER THE LAST COUP

Dr Satish Chand
Savusavu market... each coup has pushed Fiji back some three years in terms of economic progress.
5th December will bring with it the first anniversary of the last coup in Fiji. How far has Fiji travelled on the road to political stability and economic recovery? Can we draw lessons from the past year to improve our chances of doing better in the next 12 months? These are some of the issues that I take up in this article.

The Interim Prime Minister has expressed his dissatisfaction with the pace of progress over the past year. He is not alone on this assessment. While the hands of the clock cannot be wound back, the least we can do is learn from the past. These lessons could help us improve our prospects for charting a better course over the coming year.

Let me share with you the tasks, as I see them, for the next 12 months. These are: (i) lay the groundwork for a workable and durable political solution; (ii) improve law and order; (iii) create mechanisms for resolution of conflict; (iv) revive the economy; and, (v) combat corruption.

Political architecture

We must bring an end to ethically compartmentalised political competition if the coup culture of the past is to be jettisoned. And this has to be done before returning to the polls. Our electoral system rewards divisive politics that has over the past pitched the two major ethnic groups against each other.

Fortunately, there is considerable consensus across the political spectrum on the need to reform the electoral system so as to reduce ethnically compartmentalised politics. The exodus of Indo-Fijians since the first coup has helped in this shift of opinion. While it may be opportune for the Interim Government to push these changes through, doing so within the confines of the Constitution may be problematic. Not making the change could be even more problematic, however. A return to the polls under the existing system will leave those same incentives for past coups in place. I am no expert on the way out of this quagmire, thus urge the experts to exercise their minds on this very important challenge.

Law & order

Violent crimes have spiked over the recent few months but this is only the tip of the iceberg. Some disturbing allegations have surfaced on interference with the functioning of the courts. Repeated allegations have surfaced on the abuse of powers by the police and the army. If there is truth to these allegations, then these are symptoms of a crumbling State Law & Order machinery. The trust in the State is likely to erode if the situation continues to deteriorate.

Trust in our police force has taken a battering recently. The consolidation of police and military capacities has a short-term rationale but could be counterproductive over the longer time horizon.

A unified police and army provide the state the concentration of force to avert a violent challenge to its authority and the capacity to squash one quickly should it arise. A powerful disciplinary force with a complete monopoly on violence runs the risk of usurping power.

A powerful and efficient Fiji Military Forces, not surprisingly, was the means to the past coups. Divisive politics provided the motivation (more so, the excuse) for the above.

The coup gene was released in 1987. It has since mutated and multiplied. It may even have turned against its very creators and their backers—“karam dand” (karma)—as one intellectual pointed out to me in the aftermath of the last coup. Putting the gene back into the bottle is not possible anymore.

All that can be done is to reduce the motive of and the means for its spread. Taking away the incentives for ethnically divisive politics addresses the first of the above. Not much thought has yet been given to the second.

Addressing just one of the above-mentioned will not be enough. Downsizing of the army and the separation of the police from the military will also have to be addressed if we are to reduce the chances of future coups.

Conflict mitigation

The last coup was everything except a surprise. Commodore Frank Bainimarama had announced his intentions months in advance. I am told that many within the ousted regime knew both of the outcome and even its timing.

We can debate as to whether this coup could have been averted but its eventuality is evidence enough that our conflict resolution and mitigation services are not up to scratch.

We know that conflicts are bad, but part of life. In a multicultural society such as ours, the risks of conflicts are even larger. We thus need shock absorbers that prevent conflicts from emerging in the first place and mitigate their consequences when they do surface. The details of such a system are well beyond my expertise, but I once again urge the authorities to exercise their minds on this issue.

Economic growth

Per capita GDP as of 2006 according to the October release of economic data by the Reserve Bank of Fiji was equal to $5358 (at 2006 prices in Fiji dollars). The bank forecasts a decline in aggregate GDP in 2007 of 3.1 percent. With the population projected to grow by 0.8 percent in 2007, per capita GDP as of the end of 2007 would have fallen some 3.9 percent or to $5147 (again in Fiji dollars at 2006 prices). Using the bank's projections on population and GDP growth for the following two years, per capita GDP would have edged back to $5304 by the end of 2009. Three years on from the last coup, according to the calculations given above, we would still be some $54 (in Fiji dollars and at 2006 prices) short of the per capita GDP figure for 2006.

I have argued before that each coup pushed us back some three years in terms of economic progress when the latter is measured in terms of per capita income.

On this count alone, this coup is likely to be just as damaging as the previous coups. This assessment, moreover, may be conservative since coups, much like all disasters, affect the weak and poor disproportionately.

The Interim Prime Minister pleaded for our forbearance when he first took office, arguing that the pain was necessary for future gain. After all, this coup was a clean-up, an investment into our future. Many amongst us would be satisfied if the current pains were compensated for with future gains. I say many rather than all simply because some amongst us would not live to see the gains: any gains, according to RBF projections, are at least three years away.

Corruption

The case for a clean-up of corruption remains a strong one. There is substantial anecdotal evidence of poor governance and sometimes even of outright theft from the public purse.

Finding the necessary evidence to substantiate this in a court of law where the benefit of doubt always goes to the accused has never been easy, anywhere. There is no reason to believe that the ongoing efforts in Fiji to eradicate corruption will be an easy or a quick gain. But this is not reason enough to stop this battle.

In sum, let me reiterate the promise of the government to the governed. The Interim Minister of Finance, in his address delivered on October 22, 2007 in Washington DC to the joint annual meeting of the World Bank and the International Monetary Fund, announced that: “On the political front, the Interim Government is in effective control of the country. Peace and stability has been maintained. Law and order is intact.

The Interim Government is pursuing roadmaps to democracy and economic recovery. There is determination to rebuild and move the country forward. We are deeply committed to combatting corruption and promoting good governance. [and] necessary steps are being taken to enable general elections to be held.”

I ask for no more!


BUDGET OF HOPE: IS IT OPTIMISTIC?
Only a strong economy can provide the foundation for progress: Chand

Dr Satish Chand
Having brought down its second budget within a year in office, Fiji's Interim Government passed another milestone since taking office. Mahendra Chaudhry, the Finance Minister in the Interim Administration, announced the revised 2007 budget at a downtown Suva hotel on March 2, this year. The budget for 2008 was announced in a similar fashion on 23rd November but at a different hotel. Budgets brought down at hotels are not exactly the substitutes for those tabled in Parliament, but the taxpayers in Fiji would have to do with what is on offer for now.

The budget, nonetheless, is still a crucial policy document. It announces the vision of the administration, the prognosis for the economy, and strategies to be pursued in the forthcoming 12 months to improve on past performance.

The theme for the last budget was that of 'securing financial and economic stability'; this one has been tagged as a 'budget of hope' - it is indeed an optimistic budget!

But only a strong economy can provide the foundations for progress on both politics and poverty.
Here I take up in some detail the good and the bad out of the budget in terms of policies for growth.

Rubbery macroeconomic projections

The rubbery growth projections for 2007 provide little reason for confidence in the macroeconomic estimates, however.

The growth estimates have thus far been revised three times. Gross Domestic Product (GDP), an aggregate measure of the value of goods and services produced in the economy, was projected to fall relative to the figure for 2006 by 2.5 percent in the Marc budget. This figure was revised to a fall of 3.1 percent in October 2007.

A month later, the November-budget has announced a contraction in GDP for 2007 of 3.9 percent.

These large and frequent revisions raise doubts on the reliability of the macroeconomic forecasts as a whole.

The Minister has reason to be conservative with the size of the budget deficit.

He has stuck to his original promise of containing the deficit to 2 percent of GDP, arguing that government debt, at 50 percent of GDP, had already ballooned beyond sustainability.

But every percentage point fall in GDP lowers tax take by a quarter percent of GDP. Thus, the 1.4 percentage point decline in GDP over and above what was envisaged in the revised 2007 Budget should have pushed deficits up by 0.35 percent of GDP.

This did not happen because of additional expenditure tightening that took place subsequently. Public expenditures, however, can only be trimmed to a limit (the bone) before it becomes counterproductive.

Any further cuts after that begins to fracture the machinery of the State. There may still be some room for further trimming down of fat in the public service, but this room will, sooner rather than later run out.

The only path out of this fiscal quagmire is to reverse the decline in GDP, and this better happen quickly!
Persistent balance of payment deficits is another macroeconomic indicator headed in the wrong direction. It is a problem that began well before the coup.

The balance of trade, this being receipts from exports less payments for imports, continues to record large deficits-projected to be 19.6 percent of GDP in 2007.

Current transfers, it has been suggested, has improved the balance of payments to a (projected) deficit of 0.7 percent of GDP.

But remittances, constituting a large part of current transfers, have been estimated to fall, by some 30 percent, this year.

Despite the above, foreign exchange reserves are reported to having increased - from F$879.9 million at the end of 2006 to $930.6 million (sufficient for 4.3 months of import cover) by the end of October 2007.

These figures are hard to reconcile, particularly when the Fiji dollar has remained stable against the major hard currencies.

Specifics in the budget

With some 82 percent of total government expenditure going to salaries and wages, the rhetoric of reducing recurrent outlays for public investment has as yet to be translated into reality.

A number of worthy initiative have been announced in the budget. The consolidation of the Ministries of Agriculture, Fisheries, and Forestry into a single Ministry of Primary Industries makes has a strong logic, as does the amalgamation of the Ministries of Trade with Tourism, and Ministries of Youth and Sport with Employment and Industrial Relations.

But why keep the Ministry of Sugar out of the Ministry of Primary Industries?

The budget places priority on promoting exports but then talks of import substitution and protection of specific industries.

It provides funds to the Ministry of Agriculture for both: $2 million for export-promotion and $1.3 million for import-substitution. It talks about lowering the costs of doing business but then promises to pursue companies who do not bring their export receipts onshore. It similarly provides funds for promoting tourism but then goes on to raise hotel taxes. It talks about 'creating a level playing field' for the private sector, and in the same breadth introduces tax concessions for ICT (Information, Communications, and Telecommunications) investments. These contradictions must be resolved.

A serious attempt has been made to introduce competition in the provision of some of the hitherto public infrastructure services. Some success has already been recorded with telecommunications.

The budget has foreshadowed the deregulation of the superannuation industry. This will loosen the grip of the Fiji National Provident Fund and is another commendable and long-overdue initiative.

Debt dilemma, notion of 'odious debt'

The budget announced a close to finalised concessional loan facility of some $242 million with the government of the Peoples' Republic of China (PRC).

Discussions on another similar loan were aired some months ago with Merrill Lynch. Multilateral banks have also announced their willingness to consider lending funds to the interim administration.

The creditors, I hope, have done their homework on the principle of 'odious debt'.

The legality of the Interim Government is still before the courts. What if the courts declare the Interim Government illegal? What would then be the status of the debt taken by an illegal regime?

More specifically, will a future constitutionally elected government be obliged to honour a contract entered into by creditors with an illegal regime?

Just for those familiar with international law, the legal theory of odious debt would suggest otherwise.

I am no legal expert, but my understanding of this theory is that any debt incurred by an illegal regime is unenforceable unless shown to having being used in the public interest.

The onus, therefore, is on both the creditors and the Interim Government to ensure that funds accessed from abroad are used for 'national interest'.

Not new for the government, but it is a completely new ball game for at least some of the lenders!

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