People with some real knowledge of the Fijian economy are likely to scoff at the ADB’s projection, in its Asian Development Outlook (ADO) Report 2020, that growth will improve in 2021 and reach about 3%.
It has also projected the economy to shrink by 5% this year in the wake of Covid- 19.
This contrasts significantly from the 6% economic contraction recently projected by the International Monetary Fund.
The IMF has warned, however, that the situation was likely to be much worse once the full impact of the COVID-19 crisis becomes known. It is expecting to release another report in a month’s time.
Both the IMF and the ADB analyses, however, pre-date the devastating impact of Category4 -TC Harold on the economy.
“The economy is actually in a much worse shape, likely to shrink by 15-20%, at a conservative estimate, if the combined impact of TC Harold and COVID-19 are taken into consideration. Fiji was already in the throes of a severe financial crunch when the COVID-19 crisis struck,” said Labour Leader Mahendra Chaudhry.
The tourism industry which contributes some 45% to the GDP has virtually been put in cold storage for the foreseeable future. The impact of this on the economy will be devastating. This season’s cane crop suffered substantial damage from TC Harold, as have other agricultural produce. Forestry is already reeling from the trade constraints imposed by the international COVID-19 crisis. No doubt garment and fisheries will suffer a similar fate. The consumption sector which contributed so significantly to growth in the last decade, has been noticeably flattened.
In the light of such severe setbacks, one marvels at the very cautious approach taken by the international financial institutions in their economic forecasts.
ADB says government should empower the private sector to innovate, diversify and, drive economic recovery after Covid-19.
“These are just fancy words and no more. This is the type of meaningless rhetoric the bureaucrats who write such reports use to fill up the pages and earn their handsome keep,” said Mr Chaudhry.
“While the private sector plays a significant role in the economy, it is the government, particularly in small fragile economies like ours, that must take the driving seat and provide the necessary direction and stimulus for growth,” he said.
Fiji’s economy and government finances were going down the tube steadily from 2014 until it reached the very bottom of the pit last year (well before Covid-19 struck) requiring a Budget slash of 30%. All this while, ADB hardly uttered a word of warning. On the contrary, its officials paid compliments to those who mismanaged it to virtual bankruptcy.
The position today is untenable. The government is dead broke, the economy in tatters and a relentless raid is in progress on the workers’ pension fund (FNPF) to bail out a beleaguered government and a hapless private sector.