Sunday, November 25, 2012

Bainimarama Hides Behind Fiji Debt Level of 75% of GDP

The post below on the Fiji Labour Party website tells a much more accurate story of the economic situation in Fiji than that painted by the illegal PM in handing down his 2013 Budget. AS we all know his figures are all cooked as it cannot be independently verified.


Dictator Bainimarama's 2013 Budget fuelling more Debt for Fiji citizens

 Budget Baloney!

22 November 2012


The State’s annual Budget sessions in the past four years have become much of a farce in an environment completely lacking in transparency and accountability.

It is farcical to hand down a Budget when government accounts and financial statements are not available for public scrutiny, the Auditor General’s reports are withheld and no one knows whether budgetary allocations are spent according to budget provisions.
Little wonder Transparency International gave Fiji zero out of 100 points in its last survey about budget transparency in 2010, saying it is “virtually impossible for Fiji citizens to hold its government accountable for its management of the public’s money”. 

Following on the example set by the State, public corporations are also lagging on releasing their financial reports. Publication of the annual reports of the Fiji Sugar Corporation and Air Pacific are long overdue. These are two highly troubled entities that have been registering huge financial losses in the past several years. 
 
The Fiji National Provident Fund report was released yesterday after a lengthy delay. Chief Executive Aisake Taito gloats about a $115m surplus for the year after slashing pension rates by 50% thereby reducing 90% of its current pensioners to acute financial distress in the twilight years of their life. 

Here’s a classic example of how the FNPF distorts and misrepresents the truth: The CEO’s report claims (FT 22/11/12) that “only 15 pensioners suffered a reduction in pension by more than 50 per cent”. (The emphasis is ours.) What about the 90% who suffered a 50% cut, Mr Taito? 

Meanwhile, the FLP is still waiting for a response from the FNPF for details on the $12m of members’ funds it used last year to purchase land for sale as residential holdings at the abandoned Momi Bay complex. Despite several reminders, the Fund has refused to divulge any further information regarding this project. So much for transparency! 

Economic indicators provided by the regime are suspect - indeed, there are several versions of how the economy is performing.

Not surprisingly, the RBF has projected an ambitious 2.7% growth in the economy and gives a glowing report, in its October Economic Review, of “buoyancy” in the tourism sector, of how the sugar industry “continues to perform well”, of increased gold production and “robust” consumption activity. 

There is no mention of the fact that visitor arrival figures are down by 30,000 for the 10 months to October this year compared to the same period last year - a 5% drop. The biggest decline is from the New Zealand market. 

The statement that the “sugar industry continues to perform well” is a gross misrepresentation of the truth considering that both cane and sugar production have fallen drastically since the 2006 coup. This year (2012) cane production fell to the lowest ever on record at 1.6m tonnes compared to 3.3m tonnes in 2006 and sugar make is likely to hover around 150,000 tonnes. Compare this with the 330,000 tonnes sugar manufactured in 2006. 

The Asian Development Bank remains a lot more cautious about the Fiji economy. In its Pacific Economic Monitor series (July 2012) it projects a modest growth in 2012 of 1.3% and 1.7% in 2013 but these are largely based on the ‘robust’ economic data provided by the RBF. 

ADB’s major worry, and rightly so, is the mounting government debt situation. Fiji is a country surviving on borrowed offshore funds. The ADB continues to warn about the implications of the growing public debt which is now put at around 75% of the GDP if contingent liabilities are considered. This has enormous implications for public development funding and will reduce growth prospects. 

ADB warns that business confidence and investment will remain low unless progress is made on political reforms. In its April monitor, the ADB placed Fiji’s private investment levels at 2% – the lowest ever on record. 

Meanwhile, in its Doing Business Survey for 2012, the World Bank shows Fiji sliding in ranking from 72 in 2011 to 77 out of 183 countries and says Fiji’s business environment has deteriorated. The regime gloats about development in the mining sector but in actual fact landowners are angrily denouncing the adverse environmental aspects of these mineral exploitation activities – ie bauxite mining in Bua.

Just last week reports were released of an American company receiving the rights to take over from Fiji Hardwood Ltd on the logging and processing of our mahogany resources – the 3rd such company to be named. 

Again, no details were released regarding the deal but local sawmilling companies are now up in arms – saying it puts local timber operators at a serious disadvantage. 

On the infrastructure front, our roading and water works have been contracted out to overseas companies. The Fiji Roads Authority has just announced that it will lay off more than 1000 workers at year-end as road works are sourced out to NZ companies. What a bleak New Year for these workers who first heard of their plight from a newspaper headline! 

Despite the privatization of water reticulation, urban residents are continually complaining of unexplained disruptions to water supply.
Meanwhile, the cost of living continues to climb as any housewife will testify. RBF reports close to a 4% increase in consumer prices for September (year on year), up on the 3.5% increase recorded for August. 

Against such a dismal backdrop Commodore Bainimarama will be delivering his 2013 Budget (baloney). He says it will be “good” –
Good for whom we ask?


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