Thursday, September 29, 2011

Survey Reveals a Sick Fiji Economy & Getting Worse

by Sai Lealea


Sugar Industry - destined to collapse
A recent survey has revealed what we all know to be the case - A sick Fiji economy and it is getting worse by the minute the longer the current illegal regime stays in power.

Authored by a group of economists at the University of the South Pacific, the report confirmed the bleak prospects for economic growth as a result of the political situation in Fiji and made worse by external global economic realities. The dire situation facing the sugar industry is there for all to see with the current regime's attempt at revitalisation destined to fail. As well, dilapidated infrastructure will stifle long term investment opportunities in tourism and other key areas.


In the other words, Fiji's situation has been made extremely difficult by the draconian policies of the current illegal regime, including restrictions on media freedom and human rights.

Again as everyone have noted, the solution identified by the report is a return to democratic government to ensure political and economic stability. This in turn would ensure effective and well-constructed policies that promote economic growth.

The Concluding Remarks of the Report are as follows:
  • The short-medium term prospects for Fiji on both the political and economic fronts look less than promising. On the economic front, GDP growth rates have not increased despite the numerous promises. While poor growth between 2007 and 2009 can be explained partly by the impact of the global economic crisis, natural disasters and some inherent weaknesses, the continued forecasts of low growth between 2010-2013 reflects the continuing state of poor investment caused by lack of confidence in the country. The imminent collapse of the sugar industry should be a serious concern and it appears that the current government’s game plan may not work. The sugar industry has a long-history of networks which may have sounded political but it is those networks that allowed farmers to keep the interest in the industry. The destruction of some of the historic institutions of the farmers may not augur well for the industry. The current media censorship and lack of dialogue with the stakeholders is likely to be harmful to the industry which is already on the brink of collapse.
  • While the prospects for better outcomes from the tourism looks realistic, the government’s tight fiscal position may provide very little room for any serious investment undertaking to improve the infrastructure needed urgently in Fiji.
     
  • The short-medium term prospects for Fiji on both the political and economic fronts look less than promising. On the economic front, GDP growth rates have not increased despite the numerous promises. While poor growth between 2007 and 2009 can be explained partly by the impact of the global economic crisis, natural disasters and some inherent weaknesses, the continued forecasts of low growth between 2010-2013 reflects the continuing state of poor investment caused by lack of confidence in the country. The imminent collapse of the sugar industry should be a serious concern and it appears that the current government’s game plan may not work. The sugar industry has a long-history of networks which may have sounded political but it is those networks that allowed farmers to keep the interest in the industry. The destruction of some of the historic institutions of the farmers may not augur well for the industry. The current media censorship and lack of dialogue with the stakeholders is likely to be harmful to the industry which is already on the brink of collapse.
  • While the prospects for better outcomes from the tourism looks realistic, the government’s tight fiscal position may provide very little room for any serious investment undertaking to improve the infrastructure needed urgently in Fiji.
     
  • The answer to Fiji’s serious economic problems may incidentally lie in a political settlement. The link between good economic growth, democracy, media freedom and rule of law cannot be underestimated. There is no substitute for well-constructed policy when it comes to economic growth and development. Previous governments in the last three decades have made similar mistakes about growth policies. There have been very limited successes to count particularly towards long run economic growth prospects and at this point in Fiji’s history any bandaid approach will not do any good. Firm commitments and definite steps are needed to build that confidence that has been lost. The much demanded open dialogue must start immediately and the media freedom be established by relaxing the emergency law and the current censorship of the media.
  • The government has a good opportunity now to open up dialogue with the political parties, external partners and organisations such as the UN and the Commonwealth to move Fiji towards a Constitutional democracy, good economic growth and development. 


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