FLP’s response to IMF Consultation Mission’s statement on the Fijian economy

  • 19th August 2013
  • 2013
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The brief statement issued last week (Aug 15) by the International Monetary Fund (IMF) Consultation Mission to Fiji, is seriously flawed and factually incorrect in some key respects.

Firstly, the overall unemployment rate is much higher – at around 17% of the workforce – and not 9% as noted by the Mission. Youth unemployment and under employment is significantly higher at 25% of those aged
between 19-30 years.

Likewise, inflation has not declined and imported commodity and food prices remain quite high, under-pinned by a weak Fiji dollar. It is difficult to accept a growth of 2¼% in the Fiji economy in 2012 when one considers that all key exports were down compared to 2011. Tourist arrivals declined by 2.1%, sugar and gold production by 9% and 39% respectively. The fisheries and forestry sectors also posted negatives, fisheries by as much as 40%.

The Mission’s reports are based on figures provided by the government, without any independent verification of their accuracy. The “strong VAT revenue collections” referred to in its report is based on gross VAT collections without being discounted by some $60m overdue in VAT refunds.

The regime’s consumption driven growth strategies, fuelled by fiscal measures that are unsustainable over the long term, is no answer to Fiji’s economic woes.

Accountability and transparency in government’s financial dealings remain at their lowest with corruption reportedly at its worst – an important consideration the Mission seems to have avoided.

Interestingly, the Mission has not mentioned a word about the regime’s raids on the Fiji National Provident Fund, using it as a major lender to the shaky national airline, nor has it deemed it worthwhile to comment on the massive write downs of the Fund’s assets running into hundreds of millions.

Regrettably, successive IMF Missions to Fiji have neglected to articulate the concerns of a vast majority of our citizens who suffer in silence; who are unable to put bread on the table for their families; who struggle to survive, living in in squalid conditions in squatter settlements and whose future remains grim under a dictatorship.

Poverty levels have risen significantly in the past 6 years , now estimated at about 43% of the population. Home ownership for people with ordinary incomes remains but a dream for them. Military expenditure continues to rise at the expense of health, education and social services.

For the IMF, country reports are a book balancing exercise. Poverty alleviation and social justice do not seem to feature in their scheme of things.