Economy must be rescued urgently: Labour

[posted 16 Dec 2006, 1200]

Urgent measures are needed to rescue the economy to minimise adverse effects of the coup on the nation and its people, says Labour.

The Party issued a media statement after its National Council meeting in Ba on Saturday to discuss Fiji’s current political and economic crisis.

The Council has called for a swift return to democratic rule and the handing back of executive authority to the President. Labour reiterates its offer to assist in every way possible in chartering a roadmap for the restoration of effective democratic rule.

The FLP is mindful that the current developments had its origins in issues of concern over bad governance and years of misrule that had allowed corruption to become endemic and set the nation on the path to virtual financial and economic collapse.

The failure of proper checks and balances had led the deposed government to forge ahead with unconstitutional and divisive legislation which seriously undermined the rule of law.

Add to this, the worsening social distress caused by the imposition of insensitive policies and taxation measures which heightened the suffering of the poor, and we had a sure recipe for disaster.

While Labour maintains that effective economic recovery and long term social well-being can only be pegged on to democracy and the rule of law, this must ensure responsible governance, sensitive to the needs of the people.

It is obvious that the governance of our nation must take on a new direction that will entail good governance, remove all repugnant features that characterised the past administration and deal with the fundamental problems assailing the nation.

This must be done urgently in view of the current plight of the nation.

The economy

The Labour Party is aware of the rapidly deteriorating social and economic situation in the country. The economy, already fragile, is now on the brink of collapse. Urgent measures are necessary to arrest any further decline in order to prevent more job losses and the social dislocation and distress likely as a result.

The FLP notes the virtual collapse of the tourism industry and the sudden decision by Emperor Gold Mines to close its Vatukoula operations, leaving hundreds of workers jobless at this festive season.

Labour believes one of the surest roads to economic recovery lies in reviving the sugar industry, and developing agricultural output generally in order to boost exports, and foreign exchange.

The collapse of the sugar industry at this stage will not only be disastrous for the national economy, it will inflict untold suffering on close to 200,000 people who are either directly or indirectly dependent on the industry for their survival.

In this respect, the Labour Party implores the European Union, on humanitarian grounds, not to take any hasty action in suspending the massive aid programme to the industry under its Alternative Measures Programme.

The $350 million earmarked for Fiji under this scheme is vital for the rehabilitation of the sugar industry to render it viable and internationally competitive and to return Fiji to economic recovery.

Should this aid programme be suspended, the social and economic impact on the nation will be devastating, exploding current levels of poverty to unprecedented highs and inflicting immeasurable hardship on our people.

FNPF Funds

The Labour Party is worried about the security of workers funds in the FNPF in the wake of the current national crisis. The likely collapse of several major tourism projects may have put at risk millions of dollars of FNPF funds loaned for these developments.

It appears that work on big tourism projects such as the Momi Bay Resort and the Natadola resort complex have halted endangering tens of millions of dollars of FNPF moneys invested in these projects.

Labour is reliably informed that these loans were not properly secured. The Fund must inform members on the current status of its investment portfolio - loans both to government and various tourism projects. Are these millions of dollars taken from workers’ pension funds safe and secure?

The FLP notes that the military regime has now suspended the operations of the Fiji Investment Corporation Ltd which had facilitated the loans for some doubtful tourism projects without properly securing them.

FEA Tariff Hike

In view of the current precarious social and economic situation, Labour calls on FEA to review the impending electricity tariff hike effective from January 1. Neither the commercial sector nor domestic users are in a position to absorb this increase.

Labour maintains that FEA is in a very healthy and sound financial positions and the increases are not warranted. In this respect FLP notes that all of a sudden FEA’s generation of power output from the Monasavu Dam has increased considerably.

Labour believes that Monasavu was deliberately under-utilised to gain the three-year tariff hike allowed in 2005 and the recently imposed 30% surcharge on diesel. The Party calls for an investigation into how FEA engineered the situation to gain the tariff hike, an extra imposition on the poor.

Labour offices will remain open

Labour assures members of the public that all its offices, throughout the country, will remain open to provide service to the electorate during this period of crisis. Despite the dissolution of Parliament, all Labour MPs will continue to serve their constituencies.