Monday, August 01, 2011

Fiji Economy in Doldrums Since 2006 Coup

by Sai Lealea

01 August 2011

Despite attempts 
by the current interim regime to hide the real picture of the Fiji economy, it is clear it is in the doldrums!

Using every indicator there are, Fiji's economy is in dire straits and unless political stability and long term solutions to its current political problems are implemented, the downward trend will continue and with disastrous consequences.

Despite words and government reports to the contrary by the regime, IMF data in the presentation below, provides proof of this sad and diabolical situation for Fiji. To make it worse, reforms carried out by the current regime are having the opposite effect to that intended as: 

  • the sugar industry is reeling under lack of investments in infrastructure and low productivity as farmers leave the industry for more profitable sectors.
  • tourism earnings, once the rising star for Fiji, remain patchy despite ongoing discounts and attempts at new and non-traditional markets.
  • government debt level continues to soar towards a negative rating as unproductive sectors of government such as the military, soak up expenditure.
  • productivity and economic growth therefore will remain stunted and will be made worse as workers and their unions are subjected to punitive restrictions from draconian decrees by the unelected regime. 

Poverty level will rise as prices increase on basic items. Job numbers has not been able to keep pace with a growing population of new entrants into the labour market. To placate the population it is more than likely that further borrowings will have to be made through various channels as has become the norm via Chinese loans.

No wonder there has been a concerted effort to open up Fiji's natural resources for use through mining, forestry and other forms of mineral and sea bed extraction (see news below). While resource owners have been enticed with dollars flashing past their eyes in quick exchange for their consent, the lack of proper investigation and due diligence for environmental impact is bound to have long term and costly impact on both owners and their resources. Sadly though such impacts have often been downplayed in favour of the larger economic returns from exploiting those natural resources. Read below reported returns from mining projects in recent years as reported by mining authorities in Fiji.

Worse still, the doubtful nature and lack of confidence in the court system to oversee and enforce just resolutions over resulting disputes and conflict will further disadvantage resource owners when matched against capital rich corporations and conglomerates.

Ongoing political instability and uncertainty can only favour fly-by-night investors keen only on extracting maximum return at minimal cost and least time. These are investors with one eye on their bottom line and the other firmly counting down to the return to democratic rule at which time they would be exiting Fiji to enjoy their ill-gotten gains. It is no surprise there has been widespread reports of kickbacks to key regime figures as these investors seek to unblock bureaucratic log jams holding up their operations on the ground in Fiji. 

Then again one cannot blame them if such tactics have become the modus operandi to doing business deals under a restrictive environment. 

Sadly though it is the Fiji economy and its people who lose out in the end from such cavalier attitude and wanton greed on the part of some.

Click here for presentation on Fiji's worsening economic situation since Coup 2006.

Fiji Live News - 28 July
Fiji’s mining exploration projects contributed a combined $74million in revenue to our economy in 2009 and 2010, says the Mineral Resources department.

Mineral Development director, Malakai Finau said Australian mining companies, Amex and Newcrest had contributed significantly to the figure.
“The department recorded approximately F$52 million in exploration expenses in 2009 and approximately F$22 million for 2010.

“And these figures are for Mineral Exploration only and does not include earning from Mining in Vatukoula for which the gold and silver production exceeded the F$100 million in 2010,” Finau said.

This, Finau said, marked a significant improvement since the temporary closure of the Vatukoula mine in 2006 and it’s re-opening in 2007.

He also predicted a further $23million could be gained from mining explorations this year.

By Repeka Nasiko

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