Facing the future: Fiji Islands

Address by Labour Leader Mahendra P. Chaudhry
at the

State of the Pacific Dialogue
Pacific Islands Development Program
East West Center, Honolulu, Hawaii
25-26 January 2011

 Aloha, Ni sa Bula Vinaka
Good Morning, Ladies & Gentleme

I feel privileged to be part of this discussion forum on the State of the Pacific.  I would like to thank the Pacific Islands Development Program and the East West Center for facilitating my participation.

Let me state at the outset that I believe this dialogue forum is long overdue. There  are some very serious challenges facing the Pacific region, in particular our little Island States – issues related to climate change for instance, economic sustainability, governance, political stability and rising social problems associated with housing, lack of jobs, low pays, and increasing levels of poverty.

Underlying all this is the fact that we are small economies with limited resources, highly vulnerable to external shocks and to the vagaries of nature. For most of us the Millennium Development Goals are still just gaols, a decade later.

An international dialogue forum such as this that focuses on challenges faced by the region and includes participation by civil and political groups has been lacking. Of course, we have the Pacific Islands Forum and within that the Pacific Islands Finance and Economic Ministers summit but these are closed shop sessions held at governmental levels. We need more broad based dialogue both at regional and national levels to focus on our growing multitude of problems.

Within that context, let me now turn my attention to Fiji and our own particular basket of problems as we face the future.

It reminds me of a comment by author and commentator David Lewis Stein: “The past is gone; the present is full of confusion; and the future scares the hell out of me.”

That Ladies and Gentlemen, aptly sums up how most us in Fiji feel today. It also makes me wish that Commodore Frank Bainimarama were here sitting next to me so we could get some answers from him to worries that are plaguing our people.

For Fiji today is a big question mark – confronted with major uncertainties and instabilities. In such an environment, it is understandable that we face the future with much trepidation.

How can one envisage any kind of a future in a country beset with grim uncertainties? The way forward, therefore, is crystal clear – if Fiji is to have a future, we must first restore stability, certainty and confidence. The salient question is: How do we do that?

Before we tackle that issue it may be advisable to take a quick look at how we have fared over the past 10 years. It has been a history of regression rather than progress. Take for instance, Fiji’s rankings in the United Nations Human Development Index – in 1998 Fiji was ranked 66 out of 174countries; by 2005 we had slid backwards considerably to a position of 92 out of 159 countries. In fact, Tonga and Samoa had done better than Fiji –ranked at 55 and 77, respectively, that year. By 2010 we were still ranked 86out of 169 countries. 

Fiji’s economy has shrunk – contracting four years in a row since 2006, sliding to a negative -3% in 2009, described by the World Bank as Fiji’s “worst performance in more than a decade”. Although a modest growth – just above zero – is being projected for 2010, even this is extremely doubtful considering the massive decline in sugar exports last year. And while tourism arrival figures may have been high boosted by heavily discounted airfares and hotel rates, actual receipts are likely to be low for the same reason. 

The value of our dollar has eroded considerably over the past decade culminating in the 20% devaluation announced in April 2009. This was meant to address our critical Foreign Reserves situation. 

Moreover, Reserves are artificially boosted by restricting the repatriation of profits of foreign companies (mainly banks) as pointed out by the Asian Development Bank in its December 2010 report on the Fiji economy (Pacific Economic Monitor). 

Most worrying is the State’s run-away debt situation which now stands at 56% of the GDP, the highest in the region. International financial institutions have warned the government about this. 

“The current high level of central government debt (about 73% of GDP when contingent liabilities are included) constrains the government’s ability to cushion the economy against future shocks,” the IMF warned in a statement released last November.

Unfortunately, the regime continues to borrow irresponsibly, regardless of such warnings. Its borrowings in 2010 alone run into a staggering $740million – the highest annual borrowing ever in Fiji’s history. This is placing an intolerable burden on the taxpayer. 

The annual debt repayment cost running at $519 million means that the taxpayer is forking out $1.42 million per day to repay the State’s massive debts. Budget 2011 provides for further borrowing of $450 million of which$200 million is to be sourced from the Exim Bank of China. 

The price for all this is paid by the poor and the low income workers. The2.5% hike in the Value Added Tax from 12.5% to 15% in Budget 2011 and increased duty on a wide range of consumer items, was to enable the government meet its loan repayment liabilities, according to the Acting Finance Minister. 

One of the most profound and far-reaching tragedies of our current economic crisis is the imminent demise of our once significant sugar industry. Although the industry has been troubled for almost a decade now, its collapse accelerated in the past two years with the current administration dismantling key consultative institutions which were set up to ensure accountability and stability. 

Even today some 20% of our population is dependent on the industry for their livelihood. Its collapse will be economically disastrous and socially catastrophic for both the landowners as well as the tenant farmers – with many more of our people sent into the throes of poverty. 

As it is, poverty levels now stand at a very worrying 45% of the population, according to figures released by the Prime Minister’s Office, based on the latest Household Income Survey. 

So: Social distress is high, confidence low and the environment extremely depressing: Made more so by the repressive Public Emergency (PER) under which the country is being governed since 10 April 2009 when the Constitution was trashed. 

Under the PER our people are denied their basic human rights which have been used to usher in extremely repressive measures to quell criticism and consolidate the regime’s position. 

Political parties, trade unions and civil society groups, both within Fiji and

  •          restriction on media freedom under rigorous censorship requirements
  •          ban on all political activities and those of targeted trade union
  •          organisations such as cane farmers associations, effectively curtailing
  •          the right to freedom of association and assembly
  •          promulgation of the Public Emergency Regulations (PER) which
  •          provide arbitrary powers of arrest and detention
  •         the promulgation of various other decrees ie:

               Legal Practitioners Decree No 16 of 2009
Crimes Decree No 44 of 2009
Pensions and Retirement Allowances Decree No. 56 of 2009
Administration of Justice (Amendment) Decree No 3 of 2010 and more recently
Media Industry Development Decree.

             These have been criticised as repressive, designed to entrench the administration’s control and silence criticism

  • the compromised state of the Judiciary and its restricted jurisdiction. The interim government’s decrees and       promulgations made before   April 10 2009 are not challengeable before the Courts. All pending cases were terminated. No new cases challenging any the decisions of the interim administration can be entertained by the Courts.
  •  interference with the Office of the Director of Public Prosecutions
  •   trumped up charges being laid against critics and others seen as threats by the interim administration
  •  increasing militarization of the civil service. Senior Army officers have been placed in key positions in the civil service and statutory organisations
  • a worrying lack of Transparency and Accountability in the affairs of the interim administration. Transparency International has excluded Fiji from its Corruption Perceptions Index 2010 which lists 178 countries. Samoa was ranked at 62, Vanuatu 73, Tonga 101 and PNG 154.
    Meanwhile, the International Budget Partnership gave Fiji zero out of100 points for a lack of transparency in its Budget process saying it is virtually impossible for Fiji citizens to hold the government accountable for its management of public funds.

The draft report of the UN Human Rights Council’s Universal Periodic Review which studied the Fiji situation in February 2010 has issued 103 recommendations for the Fiji administration to examine and respond to on the issue of human rights violations. 

There is now a serious lack of accountability and transparency in government dealings. Policies are put in place, decrees are promulgated, and existing institutions dismantled without any consultation with stakeholders. 

Outmigration of Skills

The country’s unstable and uncertain political, social and economic climate is driving hundreds of our highly skilled people to emigrate in search of a more secure and stable future elsewhere. This would have been even more marked had it not been for the effects of the global economic downturn in 2008/2009. 

The brain drain is impacting negatively on the availability of trade skills and professional expertise in the country. Recent statistics released by the Health Ministry show that 400 doctors have left Fiji in the past 12 months – this is47% of the total 850 trained doctors in the country. (We were losing more than a doctor a day!) 

International Scene 

We are fast becoming a pariah on the international scene – suspended from the Commonwealth, the Pacific Islands Forum, and sidelined by the European Union in terms of developmental aid. Relations with our neighbours and traditional allies, Australia and New Zealand are extremely strained; relations with the US have recently been somewhat strained as well.

Faced with this isolation, the interim administration is turning increasingly to the North, particularly to China for support. In this regard, the forum should take note of the recent acknowledgement by the World Bank that it had been overtaken by China in terms of lending to developing nations in the past two years. (Information from the Financial Times). This should pose serious questions for the democratic nations of the West.

The wisdom of remaining isolated from our traditional and long-term allies may not be in Fiji’s best long term interests but at the same time our more affluent neighbours need to consider that developing island States in the region now have an option they can explore, if neglected. Such are the realities of international politics! 

The future: Dialogue 

The present is grim. The future looks even more daunting. The challenge is to change it. How do we do that? Ladies and gentlemen, the only way forward for Fiji, as I perceive it, is through dialogue. This is the Pacific Way –dialogue is our culture and tradition. There is no other. We cannot continue with business as usual if we are to save our nation from wreck and ruin. 

Sadly, the interim Prime Minister has shunned any dialogue. Indeed, his policy is no talks before September 2012. Can the nation wait that long? I think not. Somehow or the other we have to get back to dialogue mode – to resume the President’s Dialogue Forum that had been in the process prior to10 April 2009.

This is where we need assistance from the international community. We have always been of the view that it must play a greater role in Fiji’s affairs, and indeed in the affairs of the PIC. As young developing nations with vulnerable economies and limited resources, beset with problems regarding good governance, we need guidance and support in building a better and more sustainable future for our people. 

In this context, I welcome the new initiative undertaken by the United States Government to re-engage in the region more vigorously. The US AID office in Fiji it to be re-opened after a closure of 15 years. The presence of State Department officials here this morning may be another indication of its renewed interest in the region. 

I advocate greater vigilance on the part of the international community to developments within small island nations in the Pacific. It is my view that the disaster in Fiji culminating in coup 2006 could have been averted had our Western allies been more pro-active. The signs had been there for at least a year, if not longer, that all was not well in the State of Fiji politically.

No overt action was taken until at the eleventh hour when New Zealand tried frantically to broker a deal – but by then it was too late. 

Fiji had been facing serious governance issues for some years. At the heart of the pre-coup tension was several controversial legislation being pushed by the Qarase Government despite strong opposition from almost all quarters including the military. Foremost was the PRTU, the so-called Promotion of Reconciliation, Tolerance and Unity Bill which was really an attempt by the government to grant amnesty or immunity from prosecution to people involved in the 2000 coup and the army mutiny of that year.

The government had already released on Compulsory Supervision Orders a number of people already convicted and jailed for complicity in these treasonous events. This had initially been responsible for creating acrimony between the SDL government and the Army. 

Also in contention was its Qoliqoli (Coastal Waters) Bill which was divisive even within the indigenous community and would have had serious implications on private property rights, particularly in the Tourism Industry. 

I myself had cautioned Mr Qarase against proceeding with these legislative measures until they had been subjected to greater public scrutiny and discussion. He ignored my advice. 

The point I am making is that signals of increasing tension in the country over these issues were there but were ignored by the international community. Some advice and/or pressure on the Government of the day from our traditional allies may well have averted the disaster. 

We need to learn from our past. In this global age of interdependence, no one country can live in splendid isolation, no matter how much Commodore Bainimarama may wish to do so or anyone else may wish to do so.

We need to work together to restore democracy and constitutional rule in Fiji. We need to put combined, concerted pressure on the Fiji regime to resume the dialogue process to take our nation forward to general elections. We need to work out our strategies to achieve this in the face of his indomitable objection to dialogue. 

Fiji cannot continue to be run by a small coterie of people who think they can dictate what is best for our nation. We can only move forward through dialogue and consensus – that is the Pacific Way. And that is the way to go. 

The dialogue process has to be inclusive, time bound and without prejudice to its outcome. We will welcome assistance from the international community in monitoring and facilitating the process.