December 16, 2007

Rotuma Eco Camp 2007

Island sways to new beat

ASHWINI PRABHA
Saturday, December 15, 2007 - www.fijitimes.com

Excitement, adventure and eagerness surrounded the first ever eco-camp on Rotuma this week.

Nearly 70 students, adults and youth volunteers gathered for the three-day camp at Oinafa Bay, overlooking the anchorage on Rotuma Island.

The bay was a hive of activity from Monday, with excited children arriving from the Motusa, Christ the King, Peptea and Malha'a primary schools. The only high school on the island, Rotuma High School, joined the camp as well.

The eco-camp offered hands-on, fun activities that helped the young campers learn about the natural world, other people and themselves.

Activities ranged from driftwood art workshop, visual arts, song and dance activities, field trips, beach profiling, bird watching, rubbish auditing (sorting and recycle) and financial literacy workshop.

"The eco-camp aimed to raise the profile of Rotuma's unique and fragile natural heritage so that the next generation may be more environmentally conscious in this age of climate change and loss of culture," said Alfred Ralifo, eco-camp coordinator, LjeRotuma Initiative (LRI).

The camp links into the ongoing environmental education awareness program that has been part of Rotuma schools curriculum since this year.

This creative camp concept was a LjeRotuma Initiative in partnership with the schools on the island and supported by the Council of Rotuma and the District Office.

The camp was funded by the Vodafone ATH (Fiji) Foundation, GEF Small Grants Programme and private donations from the wider Rotuman community.

LjeRotuma is the only environmental non-government organisation on Rotuma with the mission to strengthen and mobilise the island community to manage and conserve its natural resources through training, research, demonstration and cultural exchange opportunities.

"I'm amazed at what LRI has pulled together and see the benefits of such exposure at a young age," said Tarterani Rigamoto, chairman of the Rotuma Council.

"We need the upcoming generation of Rotumans to appreciate and protect what we have as we depend on the land and sea."

The objective of the camp was to showcase environmental lessons to the wider island community.

The five schools have environmental activities where students adopt different habitats.

"The camp links all the activities the schools carried out throughout the year.

"It shows the students how each habitat is dependent on another, for example, how a forest area is linked to coral reefs and that each habitat can not exist in isolation," said Mr Ralifo.

"All the activities combined make up the eco-system of Rotuma.

"The children brought and displayed all the work they have been doing such as posters, photos, essays on environmental activities."

Teachers and students at the camp had an equally rewarding experience.

The camp provided them an opportunity to meet and network with students from different parts of the island.

Mr Fanifau Rafael said: "This camp is very good exposure for these young minds and shows them how to re-use rubbish and the students who are not good with formal education are learning how to use the simple things lying on the beach to make something useful through the art and craft workshop."

"We take advantage of the natural environment on Rotuma and stop appreciating it in our everyday life.

"But the bush work, beach profiling activities and collecting of shells and things to make art work is making us see things in a different light now," he said.

The Driftwood Art Workshop held by local award winning artist Craig Marlow was an opportunity for students to fire up their imagination by interpreting the driftwood pieces they collected.

That involved the addition of shells, seeds, string, etc, to decorate their pieces to produce a work of art from flotsam and jetsam found along the shoreline.

Wilfer Rigamoto, a form six student of Rotuma High School said, "We only knew how to draw but now I can make a nice artwork out of the things lying around and even learnt to re-use rubbish."

Musically inclined eco-campers were given the opportunity to write and perform drama and dance pieces based on environmental themes by choreographer and dancer Pelu Fatiaki from USP Oceania Dance Theatre.

"I love the dance workshop. We can fly like birds and swim like fish when we dance, it's so much fun," said Chesta William, of Christ the King Primary School.

December 7, 2007

Coup did no favours on Fiji economy: Academic



05 DEC 2007 - www.fijilive.com
As Fiji marks the one year anniversary of the military coup, local academic Professor Ron Duncan says that all indications point to the country’s economy being in worse shape than it was a year ago.

“No doubt the coup led to the development of perceptions about personal insecurity that adversely affected the tourism sector (Fiji’s major foreign exchange earner),” notes Duncan, the executive director, Pacific Institute of Advanced Studies in Development and Governance at the University of the South Pacific in Suva.

Exactly one year ago today, military commander and now interim Prime Minister, Commodore Voreqe Bainimarama deposed the Qarase government in a bloodless coup, citing corruption and racial bias and claiming he would clean up the corrupt practices of the previous government.

How much of this the interim Government has managed to achieve is not clear.

Still as far as the economy is concerned, Duncan says the heightened political instability has not helped the investment environment and the substantial decline in investment is reflected in the fall in GDP.

He noted that the sugar industry has reported another poor year, while the closure of the gold mine and the reduction in garment production and employment has also
contributed to the poor year.

But as he points out, the events in gold mining, sugar and garments cannot be blamed on the coup.

Duncan says that given the Budget report on the estimated drop in investment, the investment climate has suffered over the past year.

But he says that some of the things that the interim Government has done should be helping to improve the investment environment.

In particular, he noted the opening up of the telecommunications sector which he says is a boost for business and investment right across the economy.

More, the announcement that the interim Government will vigorously pursue privatisation of the inefficient, loss-making government business enterprises should also give a positive message to investors, as these costly enterprises are crippling business activity and are a burden on the budget, he added.

There have also been positive things happening with respect to land leases, Duncan says.

On how has Fiji’s standard of living fared over the past year, Duncan believes that it was inevitable that the standard of living has declined, given the decline in GDP.

“There have been job losses reported across most parts of the economy but especially in gold mining, garments and tourism.”

Duncan also expressed his disappointment that the interim Government continues with the policy of raising revenue through increases in tariffs.

“We hear all the time from the Reserve Bank of Fiji and the Ministry of Finance about the need to expand exports, but it needs to be understood that a tax on imports is effectively a tax on exports.

“I know that this is a difficult concept for people to understand but it is so critical that it be understood.

“For example, we need improved infrastructure, particularly roads, to increase exports and we need construction of resort hotels to earn more export income.

“Why then do we see a huge increase in tariffs on heavy equipment, even when there is no heavy equipment industry to protect,” asked Duncan.

On whether Fiji under the military was managing well, Duncan says he believes that the interim Government has managed reasonably well under the circumstances.

“Because of the travel ban, there is clearly a limited pool of skilled people to draw from for appointments as ministers and permanent secretaries,” Duncan noted.

But he again reiterated that the policies followed by the Ministry of Finance and the Reserve Bank have made Fiji’s economic situation worse than it needed to have been.

November 24, 2007

Fiji Budget 2008

The ups and downs of State expenditure

Saturday, November 24, 2007

THE State has announced a $1.52billion Budget with $1.2billion to be spent mostly on wages. Capital expenditure will take up $269million.

Allocations by department were:

-Office of the President, $1.56million (compared to $1.6million this year); Prime Minister's Office and People's Charter for Change, $5.14m ($5.64m for 2007);

-Public Service Commission and Public Enterprise, $13.7m ($13.9m);

-Ministry of Finance, National Planning and Sugar Industry, $90.24m ($104.3m);

-Ministry (Department) of Provincial Development, Indigenous and Multi-Ethnic Affairs, $45.9m ($47.2m);

-Ministry of Defence, National Security and Immigration, $5.3m ($5.4m);

-Ministry of Foreign Affairs International Co-operation and Civil Aviation, $20.94m ($21.13m);

-Office of the Auditor General, $3.17m ($2.81m);

-Elections Office, $4.24m ($707,000);

-Judiciary, $12.38m ($12.11m);

-Legislature, $1.01m ($1.48m);

-Office of the Ombudsman, $1.47m ($1.42m);

-Office of the Director of Public Prosecutions, $4.6m ($3.89m);

-Ministry of Justice, $2.01m ($2.12m);

-Fiji Prisons Service, $13.7m ($13.5m);

-Department of Information, $4.42m ($6.5m);

-Fiji Military Forces, $81.5m ($80.7m);

-Fiji Police Force, $70.53m ($69m);

-Ministry of Education, National Heritage, Culture and Arts, $25.5m ($26.1m);

-Ministry of Health, $139.5m ($150.8m);

-Department of Local Government and Urban Development, $3.52m ($3.96m);

-Ministry of Housing Women and Social Welfare, $32.2m ($29.2m);

-Ministry of Industrial Relations, Employment Youth and Sport, $12.43m ($13.32m);

-Ministry of Primary Industries, $58.7m ($62m);

-Ministry of Lands, Mineral Resources and Environment, $40.75m ($47.9m);

-Ministry of Industry, Tourism, Trade and Communications, $31.27m ($30.6m);

-Ministry of Transport, Works and Energy, $251.1m ($235.6m).

October 23, 2007

Interim Govt made serious mistake: economist


www.fijilive.com - Tuesday October 23, 2007

The interim Government's policy of insisting on a deficit of two per cent is a serious mistake, says an economist at the University of the South Pacific.

USP Professor and Head of School of Economics, Biman Prasad says the policy is one that will further contract the economy this year and will make it even harder to recover in 2008.

Prasad says it is "not sensible" to reduce spending when all other sectors of the island country's economy are performing poorly.

"If exports are down, if private investment is done, if consumption is down because wages are being cut, unemployment is rising and poverty is increasing, the only option is government spending to keep the economy afloat until other components of the national output begin to show improvement," Prasad told fijilive.

He made the comments when asked on his expectation of the 2008 National Budget, to be announced on November 23 this year.

He says the interim Government policies in the 2007 revised mini-budget in last March will take time to have an effect on the economy and "it is possible that some of the policies put in place by the interim Government could have an impact by next year."

He says the situation this year still looks bleak. Fiji's central bank maintains its forecast of a negative growth of three per cent.

Prasad agrees with commentators like Emeritus Professor of the Australian National University (ANU), Ron Duncan, who says governments should not be driven foolishly to cut deficits and further contract the economy.

"Borrowing in a contractionary period should be considered a sensible policy," he says.

Prasad says the policy adopted with respect to deficit has not worked.

He says if government spending through borrowing is not adopted, Fiji could expect a less than expected recovery in 2008.

"I am hoping the (interim) Minister for Finance (Mahendra Chaudhry) will take the situation into consideration and borrow more in 2008 to, especially, spend on developing infrastructure (if not new) then improving the deteriorating state of infrastructure in the country."

He says spending on infrastructure will send a positive signal to private investors and farmers and could spur investment activities and improve production.

"Increase government spending is also needed to combat increasing levels of crime, cushion the impact of high levels of unemployment through providing relief to those below the poverty line," Prasad says.

He adds these spending are vital to maintaining stability and social cohesion in the community.

When colonies come of age

WESLEY MORGAN

www.fijitimes.com - Sunday, October 21, 2007

AS the deadline for a new trade deal with the European Union approaches, the question on people's minds is: Are developing countries in the Pacific still willing to play?

Europe is negotiating new free trade deals with 76 ex-colonies in Africa, the Caribbean and the Pacific (ACP countries).

For decades, ACP countries have had a preferential trading arrangement with the EU, recognising the development challenges facing ACP countries.

Preferential trading arrangements also acknowledge the historical debt owed by European nations for hundreds of years of colonial exploitation which helped to grow Europe's own economy.

But now negotiations are underway to replace those trading agreements with a model that is compatible with the trade rules of the World Trade Organisation.

The EU is offering new trade and development agreements, called Economic Partnership Agreements (EPAs), to six ACP regions the Caribbean, West Africa, East and Southern Africa, Central Africa and the Pacific.

Leaders in the Pacific entered the EPA process in good faith, believing the EPA was about a real economic partnership and providing new avenues for sustainable development. They worked hard to develop a balanced and pro-development EPA legal text which was presented to the EU in mid-2006.

It took the EU 15 months to get back to the Pacific and when they did, the Pacific Islands Forum secretariat complained their draft was "lacking in a number of critical details".

The secretariat said the EU's offer set out the European demands while "reflecting almost none of the key written proposals" of the Pacific countries.

The EU's draft EPA text was a slightly amended version of an EPA proposal put to one of the African ACP regions which only added to suspicions the EU was not genuinely interested in pro-development proposals being put forward by the Pacific island countries.

Turning the screws

As time runs out, (the EU claims December 31, 2007 is an absolute deadline for EPA negotiations) West African trade ministers have said it would be impossible to conclude an inclusive and balanced trade deal by the end of the year and are backing out of the negotiating timeline.

However, the EU has continued to turn the screws on Pacific negotiators to try and squeeze out a face-saving deal by refusing to guarantee continued preferential market access if the Pacific doesn't sign up before the end of the year.

In a divide and rule move, the EU has also unilaterally denounced the Sugar Protocol in the final months of negotiations.

This has forced Fiji into a corner, because if Fiji wants to continue to enjoy preferential market access for sugar exports, Fiji must negotiate sugar as part of the EPA, abandoning a "red line" position of Pacific-wide unity in trade negotiations.

This week, the EU spokesman for trade, Peter Power, re-iterated the threat to reduce ACP export earnings if an EPA is not signed by the end of the year.

"If they are not signed by the end of the year, we will no longer be able to offer our current preferential access and will have to move to an alternative, which will give less market access in Europe for many ACP countries," said Mr Power.

The EU claims that it is a legal requirement of the WTO that they will have to raise tariffs on Pacific exports if the EPA is not signed this year.

However, a group of international development experts, including the coordinator of the economic and trade co-operation program at the European Centre for Development Policy Management and the head of Oxfam International, said on Thursday, "The Commission is incorrect to claim that it has no legal choice but to raise its tariffs in January 2008".

They said if the EU imposes a wide range of tariffs on many of the world's poorest nations, "it will be by choice, not by legal compulsion".

Pacific livelihoods will be threatened if the EU does choose to raise its tariffs at the end of the year.

For example, tuna from Papua New Guinea would be charged a 20 per cent duty on entry to the EU.

That would put the PNG fishing industry and thousands of jobs at risk.

The Pacific's own regional watchdog on trade, the Pacific Network on Globalisation (PANG) said the EU was not behaving like a true development partner.

PANG coordinator Roshni Sami said Pacific leaders had shown again and again that the Pacific wants to work with EU to create real development partnership.

"But we need the time to find a trade deal that will actually have development outcomes," said Ms Sami.

Even the secretary-general of the Commonwealth, Don McKinnon has said the EU was "creating a crisis" by placing undue pressure on its ex-colonies.

"This sort of thing is of concern to us because you are dealing with a heavyweight against many flyweights," said Mr McKinnon.

"They are not equal," he said.

"The deadline is all about creating a crisis, and in those situations the big guy is always going to win."

Real leadership

Pacific regional NGOs meeting in Tonga last week issued a strong statement to Pacific leaders, calling on them to stand up for the rights of Pacific people in the EPA negotiations.

The NGOs urged Pacific Ministers to adhere to 'red line' minimum negotiating positions and stressed the 'absolute necessity' for Pacific unity in the EPA negotiations, to prevent bilateral agreements dividing the Pacific's position.

The statement also called on Pacific trade ministers to take enough time for consultation and scrutiny of the implications of the EPA, including incorporating the results of a recent social impact assessment.

The Pacific has indicated they may be willing to sign an interim agreement on goods before the years end but Pacific NGOs are concerned this would undermine the Pacific's ability to get what it really wants out of the EPA.

Ms Sami said the EU's "staggeringly unfair" demands that any trade preferences granted to other nations be granted to the EU as well, indicated the EU was interested in free trade and not development and poverty reduction.

"Somehow we have to get Pacific leaders to put niceties aside and challenge our 'development partners' to stop trying to exploit our markets and give the Pacific a chance at achieving real development, good governance, gender equality and human security; because economic justice underlies all these things," said Ms Sami.

"We have to understand trade is important, because trading arrangements the Pacific has had in place in recent decades have provided wealth for a whole generation of Pacific Islanders and have helped provide for things like public education and public health.

"Signing a bad trade agreement will dramatically undercut our all of our futures." The author is the Information, Education and Communications Officer at the Pacific Network on Globalisation (PANG), a regional NGO committed to fair trade in the Pacific.

October 19, 2007

Wrong Govt polices worsens recession


Thursday October 18, 2007

An academic says that wrong polices adopted by Fiji’s Finance Ministry and the Central Bank in the wake of the 2006 coup has worsened the recession in the country.

Professor Ron Duncan, executive director, Pacific Institute of Advanced Studies in Development and Governance at the University of the South Pacific in Suva says that essentially, the major shock to the economy from the (December 5) coup was the adverse impact of the foreign travel advisories on the tourism industry.

“So we had an economy suffering a major external shock and consequently a recession.

“The policies adopted by the MOF and the Central Bank only served to make the recession worse than it needs to have been.”

Professor Duncan noted that stringent capital controls were put in place by the Central Bank, fearing capital flight.

But he pointed out that the 2006 coup was different from the 2000 government takeover, which threatened the business sector.

“The 2006 coup did not have the same impact on the business sector. There should not have been the same worry about capital flight.”

He notes that the Central Bank has since eased the stringent capital controls, under pressure from business.

“But I think that it still doesn't really understand the nature of the crisis.”

Professor Duncan says the bank reports that its policies are successful because imports are declining. “But here we have an economy in recession. It is only natural that imports will decline.”

He says the main reason for the bank's focus on capital controls was to prevent a further run-down in foreign reserves, which would force a devaluation.

But he pointed out that Professor Satish Chand (of the Australian National University) had estimated that the Fiji dollar was over-valued by 12 percent or more following the coup.

“The bank resisted devaluation. It is too late now to devalue as an adjustment of the economy had to be made in some form, and if the adjustment was not allowed to take place through the exchange rate then it had to take place somewhere else.

“The most likely place where the adjustment has taken place is in the loss of jobs.”

According to him, one of the Bank's arguments for resisting devaluation is that it will not lead to increased exports because Fiji's exports are "supply constrained".

He says this is true for agricultural exports.

“But Fiji's main export is tourism and devaluation of the Fiji dollar would have had a positive impact on tourism, which is not subject to the domestic supply constraints the Bank is properly concerned about.”

He says that prior to December 2006, the Fiji economy was showing symptoms of an increasing current account deficit and pressure on foreign reserves.

But, he says these were symptoms largely of the political impasse over agricultural land tenure and issues scaring foreign investors such as the law and order problem and the proposed Qoliqoli legislation.

“It was an economy supported by tourism and remittances but suffering from the shock of the loss of exports and employment in the garment industry.

“The Fiji economy was not what I would call an unstable economy. But it was one certainly in need of better management.”

October 17, 2007

UTOF wants its Momi money back


Tuesday October 16, 2007 -www.fijitimes.com

A winding up notice has been sent to Muanirewa Resort Ltd, the company linked to the Momi Bay developers Matapo Ltd, after it defaulted on a $12 million loan repayment to the Unit Trust of Fiji.

“We have had meetings, and promises have been made and not honoured. At the moment we are commencing our legal process to recover the money because there is no concrete evidence that they have got money to pay,” Unit Trust lawyer Sosefo Inoke says.

He said the company has been given 21 days to pay up.

Muainirewa was to have paid the loan back to Unit Trust by September 30 but the deadline was extended to October 10, but no money was forthcoming.

Inoke says there is no indication as to when the money would be paid.

For its part, Matapo Ltd says it would make a statement when the issue is resolved.

Inoke says this is money owed to the small investors whose savings are invested with the Unit Trust of Fiji.

“They are not rich people ... they are ordinary working people.”

He says investors come from overseas, take big loans and don’t pay it back. “We spend a lot of money trying to recover it.”

Late last month, Fiji's interim Government had said it would be requesting financial institution, the Fiji Development Bank to give a further $15 million to Matapo Limited in respect of the Momi Bay development project. (The multi million dollar project has been at a standstill since early this year due to lack of funds.)

However, Government said the funds were to be held in escrow until Matapo repaid all debts owed to the Unit Trust of Fiji, and Matapo sources $36 million from offshore which was required to develop the project.

It is unclear at this stage whether Matapo has been able to source the funds.

The project is divided into two phases. Stage 1 is owned and managed by Matapo Ltd and stage 2 by Muainarewa Resort Ltd.

Stage I of the project has to date been financed by $90m contributed by shareholders of Matapo Ltd together with funds provided by the FDB/FNPF syndicate approved total loan facility of $74m.

Unit Trust of Fiji provided a loan of $12m to Muainarewa Resorts Ltd for the purchase of 422 acres of land required for Stage II.

“At the end of the day, we want the money back and that is the normal commercial terms under the contract,” Inoke says.

July 7, 2007

Fiji Workers Pay

Letter to Fiji Times - 7 June 2007
Sir
Further cuts in public sector wages and a tighteningin expenditure are to be expected as the interim regime struggles to reignite Fiji's economy. To say otherwise is to cheat on government workers as the economic levers available to the regime dwindle at each turn.
The devaluation of the currency may be inevitable as import levels grow and foreign reserves to pay for it drop. The loss of skilled labour and expertise to overseas countries will further slow recovery, especially for attempts at reviving export sectors. As well, many are sceptical at attempts to attract tourism from non-traditional sources such as India, despite Chaudhry's self interested motivation for it.
While the the previous Qarase government has been dipping into the FNPF to fund its Budget deficit, Chaudhry is no better in obtaining similar funding from overseas capital markets. At least with the previous regime, repayment of the borrowed funds remain in the country. The key challenge in reviving the economy is growing it in a manner that does not stifle internal demand. Cutting wages of struggling families is not how to go about it as it just leads to other downstream social costs.
To grow the economy require workers who would give of their labour that equates to the cost and is of equivalent value and more in productivity gains. However, for that to occur you need a supportive environment that value workers' contribution, rights and entitlements.
Sadly, the current situation workers in Fiji find themselves is not of their making, yet they are paying a heavy price for it. To them, I can only say, take note of that fact and make those responsible pay an equally heavy price at the ballot box when Fiji's dignity as a democratic nation is finally restored.
Sai Lealea
Wellington

July 5, 2007

A mum and company owner - Nancy Sheehan


23-Jun-2007 - www.fijidailypost.com

MANY Fijians now living overseas profess a very dear-to-the-heart connection to and affinity with everything about their native Fiji.

One such person is a successful woman who has been living in New Zealand for the last decade or so with her family and who is very much a Fijian at heart.

During the early ’60s, Nancy Sheehan’s (nee Ratumaitavuki) parents, Maciu Ratumaitavuki of Nairai and wife Ro Silo Ratumaitavuki of Moturiki, both from the province of Lomaiviti, migrated to New Zealand with the hope of giving their family a better and secure life.

Nancy has three brothers (two of whom have passed away) and two sisters all living in New Zealand. Between Nancy and her sole surviving brother and two sisters, they have 16 children, with ages ranging from 24 to 2 years.

Nancy and her husband Michael Sheehan have four beautiful children, Edward, Mereana, James and Emily and they are of Irish, Maori, Yugoslav and Fijian ethnic ancestry but all identify themselves strongly with Fiji.

Nancy lives in North Shore, Auckland in a suburb called Beach Haven, which she describes as “a very nice unpretentious suburb as it has a superb view of Waitemata Harbour.

Waitemata Harbour is the main access by sea to Auckland. It connects the city and port to the Hauraki Gulf, and thus to the Pacific Ocean, and is sheltered from Pacific storms by the bulks of Rangitoto Island and Waiheke Island.

Nancy’s suburb has a lot of different ethnicities living amongst each other.”
Her home is close to the water and parks, which she says are great value for the children.

Nancy was mainly educated at Palmerston North, where her parents still live.

She completed all her tertiary qualifications in New Zealand where she gained a Bachelor of Business Studies in Marketing from Massey University in 1981.

She later worked in a number of corporate organisations in Auckland.

She later returned to study, completing a Post Graduate Diploma in Business (Finance) from Auckland University in 1993 and a Master of Business Administration from Massey University in 1998.

Nancy is now the proud owner of her own company, Nancy Sheehan & Associations, a business and economic development consultancy firm in Grey Lynn.

Her daughter Mereana works with her and the firm specialises in evaluation research and strategy, organisational capacity building and performance-based management.

Nancy has just negotiated an alliance with a strategic development and communications company L2S, which is a very exciting prospect for her as she expands her business.

In her line of expertise, she normally works with associates on large evaluation research, organisational capacity building and training projects for the New Zealand government in the social, health and business development sectors both in New Zealand and the Pacific region.

She is also keen to expand her work into Australia.

“I am living the professional life I designed for myself 20 years ago,” Nancy said.

“I was always a nerd with a voracious appetite for reading and I am also the consummate workaholic but my family gave me lots of reasons to not work too hard, so it’s all about ensuring balance and doing the type of work that makes your heart sing.”

She adds she is aware of the need to be internationally competitive.

In order to ensure that her knowledge base is current with international best practice in her specialist areas, she regularly undertakes training courses overseas.

In 2001 she attended a state of the art business development services training with the SEEP Network in Washington DC in the United States in 2001. She returned in 2002 to a Training the Trainers workshop with SEEP Network and then assisted in facilitating the same course again in Washington DC.

In 2006 she attended the International Programme for Development Evaluation Training (IPDET) supported by the World Bank in conjunction with the School of Public Policy and Administration of Carleton University, in Ottawa Canada.

Nancy then completed a course on Building Partner Capacity with the International NGO Training and Research centre (INTRAC) in Oxford, United Kingdom later in the same year.

“I also regularly attend or present at national conferences and fono (meetings), I also have attended or presented at international conferences in Rarotonga, Washington, London, Kuala Lumpur and Melbourne,” she says.

Nancy is also a professional director and the first Pacific person to sit as a director on a Crown Research Institute, Crop and Food Research and has had a number of ministerial appointments.

She currently sits on the Council of Manukau Institute of Technology, which she very much enjoys as quite a number of Fijians study at the institute.

As an outspoken and very open-hearted person, in Nancy’s mind she is always proud to carry the Fiji flag. Although living in and running a business in New Zealand she regards herself as a daughter of Fiji and the Pacific.

“This is my region so anywhere in the South Pacific feels like home.”

As a mother and a working class Fijian woman, Nancy has in many ways proven that we can all be what we truly want to be in life if we are dedicated to our goals.
She contends that a lot of patience is also needed.

“For those still at school – do your homework and develop a good work ethic and always make your parents proud,” she says.

“This loosely translates to – behave yourself and don’t do anything that will affect your career options at a later date and for those in university - get a few degrees, the first should give you a strong technical discipline, then at least one post grad that is research-based.

“Travel, open up your mind, read widely and be prepared to take advice, especially those who want to pursue self-employment.”

As owner of a consultancy firm she advises young people to “make sure the market wants your skills, actively network, be prepared to work long-hours and manage your money well.”

“Be motivated and have a thirst for learning, always work with integrity, do it right the first time, always look to maintain relationships and want the best for your clients and if you are a black woman, that’s both a challenge and a bonus,” she concludes.

SOWANI KURUSIGA

June 23, 2007

Vitusagavulu ready to head home

www.fijitimes.com - Friday, June 22, 2007

FIJI's High Commissioner to the United States and Canada is satisfied with the achievements of the Commission during his brief stint as Fiji's representative in Washington DC.

Jesoni Vitusagavulu finished off officially on Wednesday after serving 22 months of his three-year appointment.

''I wish I was allowed to complete my term as there was still a lot to be done,'' Mr Vitusagavulu said in a statement from Washington.

A major goal of the Washington mission in 2006 was to reverse the decline in exports to the US, the statement said.

This had dropped from F$261.5million in 2004 to $176.6million in 2005 - a big drop of 32 per cent, due to the decline in garment exports following the expiry of the garment quota system.

''My brief was to refocus the activities of the mission to support export and investment growth in order to stimulate the economy and increase employment,'' said Mr Vitusagavulu, who was recruited from the private sector to take up the post.

Exports to the US in 2006 totaled F$170million, a slight decrease of F$7million or four per cent compared to 2005.

June 14, 2007

Renewal energy benefits for Pacific

Renewal energy benefits for Pacific

www.ffijitimes.com - Wednesday, June 13, 2007

Update: 12.16pm FIJI is among several Pacific islands countries that will benefit from a US$9.5million fund provided by the Global Environment Facility for renewal energy electricity.

A statement from the World Bank says assistance will be provided to rural Pacific islanders so they can access low cost, long term finance to purchase electricity at a fraction of the cost they are now paying for diesel, with support from ANZ Bank in the Pacific.

''In the Pacific islands, access to electricity can be as low as 7 per cent in rural areas of Papua New Guinea to a high of 65 per cent in Fiji. However, power generation has been heavily dependent on diesel and most lighting is still provided by kerosene lamps. With the cost of diesel and kerosene soaring in the past two years, many rural households have been spending 25% or more of their income on fuel. Schools in Papua New Guinea have been spending around 70 per cent of their budget on diesel for electricity,'' the statement said.

The Sustainable Energy Financing project will draw on the Pacific islands good renewable energy endowments, particularly solar PV (Solar Photo Voltaic), Pico-Hydro and Biofuels (coconut oil).

The World Bank experience in China, Sri Lanka and Bangladesh has shown that renewable energy technologies have become a cheaper option for increasing access to electricity for rural households and small enterprises.

The project will also provide technical assistance so that quality energy equipment, such as solar PV kits, pico-hydro units and coconut oil tanks, can be provided reliably.

''The low cost loans over a five year period provided through ANZ Pacific will help to overcome the previous reluctance of local financial institutions to lend money on affordable terms,'' the statement said.

World Bank country director for Papua New Guinea, Timor-Leste and the Pacific, Nigel Roberts said: ''This project has the potential to bring cheap, reliable electricity so that Pacific Islanders can have light at night, listen to the radio, run a small refrigerator and at the same time, use power sources that are environmentally sound and sustainable.''

Papua New Guinea, the Solomon Islands, Vanuatu, the Republic of the Mashall Islands and Fiji will benefit from this project.

June 13, 2007

SHIPPING SERVICES IN STATE OF LIMBO IN FIJI

ISLANDS OUT OF BASIC ITEMS
13-Jun-2007
SHIPPING SERVICES IN STATE OF LIMBO

BASIC food items are reportedly running low in retail shops on islands in the Lau Group because inter-island vessels that service the islands are not visiting regularly.
The problem has been an ongoing one for the maritime province.

Shipping operators say the cost of running their services are very high and they are hopeful that government will consider their plight.

One trip to Lau costs a vessel an average of $10,000 in fuel, with other items like wages for staff and food ration taking expenses up to approximately $25,000 per trip.

Many are now asking what has happened to the franchise service set up by the deposed Soqosoqo Duavata ni Lewenivanua (SDL) government, to help subsidise costs for local shipowners who were awarded contracts for certain routes under the franchise.

Reports received from some of the islands in Lau yesterday confirmed that there was a shortage of groceries on some of the islands.

Basic food items now needed urgently include sugar, salt, rice, flour, cooking oil, tea and washing soap.

The lack of stock is because the two vessels that service the islands only visit the group once in a month.

The two vessels, the MV Tunatuki and the MV Cagi Mai Ba take turns visiting the different islands, with one visiting northern Lau while the other visits the southern islands.

They rotate after that.

The MV Tunatuki, which is operated by Salia Basaga Shipping, is still berthed at the Narain Jetty in Walu Bay, a week after it had loaded cargo destined for Vanuabalavu and other islands in Lau.

On board the Tunatuki is approximately $100,000 worth of cargo, including food items.
A part of this consignment was supposed to have been taken to Vanuabalavu, for the two Qalitu Enterprise supermarkets at Lomaloma and Mavana.

A Qalitu company spokesman told the Fiji Daily Post yesterday they had been waiting for the Tunatuki to sail since June 5 and they were worried because their supply was already on board.

“We have our supply for the two supermarkets already on board the Tunatuki,” the spokesman said.

“The supply on the island is running out and because the boat is not sailing some of the relatives have to buy the basic items from Suva and send them by airplane to the island.”
“As for us we are worried that our stock might get bad and that would mean a double loss for us.”

Efforts to try and get comments from the MV Tunatuki’s operators failed yesterday with telephone messages advising callers to call a Dharmend on a mobile phone number.

The MV Cagimaiba, the second vessel that serves the Lau Group, also visits the islands once a month.
Efforts to get comments from the Western Shipping Suva office yesterday proved futile with the answering machine advising callers that the phone mailbox was full.

Checks with supermarkets who receive orders from the islands revealed that they were also facing problems because of the irregular shipping service provided.

One of the supermarket managers said they had loaded supplies on the MV Tunatuki on June 5 because they were informed the vessel would sail that night.

But by yesterday afternoon the vessel was still at the Narain Wharf waiting to sail.
No comment was possible from the Ministry of Transport yesterday. When the Fiji Daily Post called, ministry staff kept transferring the call to a different extension.

A faxed question was also sent to Interim Minister for Transport, Manu Korovulavula but remained unanswered by the time this edition went to press.


By ILIESA TORA

May 29, 2007

Fiji Economy Gloomy

Gloomy picture for the economy

Monday, May 28, 2007

THE economy is headed for darker days, warns an academic.

University of the South Pacific economist Doctor Mahendra Reddy said the country's fiscal position was showing little signs of improvement and forecast more trouble in future.

He said the real picture was far from rosy with exports not picking up and tourism not responding too well.

"Real sectors (agriculture, exports, etc) are not responding and tourism is also afloat," said Dr Reddy.

He said there was an urgent need to address the fundamentals to start fixing the problem.

"Leases are expiring and land is being withdrawn from agriculture," he said.

"Experienced farmers are leaving the rural areas. This will not only have an impact on our ability to raise rural output but will also put pressure on the already strained urban amenities."

Travel advisories in place are not helping, as evident from the low tourist arrivals.

Dr Reddy said the issues needed to be arrested immediately if the country was to raise output and improve the livelihood of the general population.

He said the move to join military and police operations was a positive development in tackling issues related to the increase in crime and the move should be encouraged.

However, on the economic front, the picture was gloomy.

The Reserve Bank, in its April review, revealed the economy could further contract. Another economist Professor Biman Prasad said the contraction continued especially with a lack of recovery in tourism.

Mr Prasad said there was a need to engage with major trading partners such as Australia and New Zealand to lure more tourists to our shores for much-needed foreign exchange.

He said negative tourist advisories had a negative effect on the economy.

"We need tourists from these countries and it can only happen if the travel advisories are removed.

"Many hotels have gone to 50 per cent discount and the rate is low.

"With the current trend, it could continue to the end of the year.

"This time last year, hotels had 70 per cent occupancy but today it is 30 to 35 per cent.

Air Pacific had cancelled some flights and was taking away some services.

March 28, 2007

Modest Growth for Fiji in 2008 - ADB

Modest economy growth in 2008: ADB
www.fijilive.com Tuesday March 27, 2007

The Asian Development Bank says Fiji's economy is seen to emerge from a recession in 2008 with a growth of 1.3 per cent.

ADB regional director based in Suva, Sirpa Jarvenpaa said this is predicated much on the recovery of the tourism numbers between six to eight per cent in 2008.

She made the comments while releasing the Asian Development Outlook, the ADB's annual economic publication.

Jarvenpaa said while Fiji's foreign reserves will continue to be under pressure, the tight fiscal and monetary policies are expected to contribute to financial stability.

"But to generate the necessary level of growth for sustainable employment expansion against the subdued growth achieved over the last five years at 3.4 percent and 3.4 per cent in 2006, development challenges call for major structural changes. Particularly to attract more private sector investment.

Jarvenpaa said Fiji faced many economic challenges even before the 2006 coup and 2007 looks as if it would be a difficult year.

She said the 3.4 per cent growth last year was achieved on the back of agriculture, particularly sugar production, forestry, fisheries sectors and expansion in construction, and growth in services stimulated by consumption demand particularly in electricity and water sectors.

"Growth was achieved despite a decline in the tourism sector and the closure of the country's gold mine."

Jarvenpaa said economic performance in 2006 was affected by the continuing loss of preferential access in textile export markets reflecting in a steep decline in clothing industry in 2006 where production was reduced by 25 per cent.

"Imports grew by 12.7 per cent in US dollar terms in 2006 and exports fell by 1.8 per cent.

"While the surplus on services and transports increased primarily due to the personal remittances this was insufficient to offset the widening trade gap."

Jarvenpaa said exports remained weak last year and current account deficit widened, placing pressure on the reserves.

On private sector investment levels, Jarvenpaa said this remained low at the equivalent of eight per cent of Gross Domestic Product (GDP).

She said private investment should comprise the largest share of total investment that should exceed 25 per cent of GDP to generate the necessary level of growth.

Coup affects EU negotiation

The illegal removal of the Laisenia Qarase-led Sosoqoqo Duavata ni Lewenivanua’s multi-party government could surely affect Fiji’s negotiation on theEuropean Union’s new economic partnership agreement (EPA). The EU has strongly opposed the military takeover on December 5, 2006. The EU has still not changed its stand and maintained the coup had not been in the best interests of the people of Fiji. It has called for the urgent and full restoration of democracy, as well as a return to civilian government as soon as possible. As a result of the takeover, the EU considers that there has been a violation of the essential elements of the ACP-EU Partnership Agreement (also known as the Cotonou Agreement), to which both the EU and Fiji are signatories.Where provisions of the essential elements of the agreement - regarding democratic principles, the rule of law and human rights - have been breached, a process is provided for under Article 96 of the Agreement whereby the authorities of the country concerned are invited for consultations, with a view to seeking solutions acceptable to both parties. If, following such consultations, acceptable solutions are not found, appropriate measures are taken. Such measures can include the suspension, or partial suspension of EU-funded aid programmes, including - in the case of Fiji - suspension of the assistance to the sugar sector that, prior to the coup, the EU had committed itself to providing. A letter was sent by the EU on February 27, addressed to the President of the Republic of the Fiji Islands, stating that it wished to conduct formal consultations with the Interim Government before any such measures were taken. The consultations are designed to give the Interim Government the opportunity to set out its plan for the return to democracy, as well as its future intentions as regards respect of the rule of law and of human rights. The Cotonou Agreement provides for the consultations to begin no later than 30 days after the issuing of the letter of invitation, and the consultation procedure should last no longer than 120 days. A first meeting is expected to take place, in Brussels very soon. The measures to be taken with regard to aid suspension will be decided by the EU only as a result of the conclusion of the consultation procedure.At a meeting with EU Trade Commissioner Peter Mandleson at Brussels last Monday (March 19) said the EPA was the way forward for the 78 African, Carribean and Pacific (ACP) countries.He said with the Cotonou Agreement coming to an end in the very near future, ACP countries had been given time to think of the EPA.In fact the EPA concept had been floated around in the last seven years.Mr Mandleson said non-governmental organisations (NGOs) had been quick to criticise the EPA but had offered no alternatives.
We had the opportunity of meeting with Oxfam International at their office in BrusselsOxfam said free trade agreements could impose radical tariff liberalisation, threatening the livelihood of small farmers and preventing governments from using tariff policy to promote manufacturing. Citing an example Oxfam said through the EPA. Europe proposes to oblige the poorest countries in the world to reduce a very large part of their tariffs to zero.
At the same time FTA’s do not address the adverse impacts of rich country subsidies on poor countries through dumping, or the plethora of non-tariff barriers that continue to impede access to rich country markets.Mr Mandleson says the EU wants to complete new trade agreements with ACP countries by the end of the year despite opposition from developing countries and NGOs. “This means we will have to significantly increase the tempo of negotiations in some regions,” said Mr Mandelson.The EU had talks with development ministers and representatives of 30 ACP states in Bonn, Germany.
The EU wants economic partnership agreements with the ACP to replace the preferential treatment it gives to ACP imports, which the World TradeOrganisation says is discriminatory and has to stop by the end of this year.The new pacts see the creation of six regional markets, the diversification of local economies and a gradual opening up of ACP markets for EU services and exports.ACP countries fear a market opening could damage existing economic structures and harm their economies, but Mr Mandelson said this would not be the case because there would be a lengthy transition period of years, in some cases decades.The trade commissioner said he expected a deal to be reached with Caribbean nations in July and with the other regions before the WTO deadline expires at the end of the year.Mr Mandelson said the EU had a responsibility to ensure that the ACP nations were “not left in the state of underdevelopment in which they currently find themselves.”He said they needed help to realise their potential.
The ways to achieve this were to invest more, improve integration of regional markets and increase access to EU markets, he said.
In addition to fears of economic hardship, the ACP countries also want the EU to provide them with more funds to introduce the reforms needed for the new pacts to become effective.Mr Mandelson warned the ACP nations that they risked being decoupled from the global economy and left on an island of steadily declining exports of natural resources. Promising a completely new partnership, he said that negotiations would be difficult because of fears of change as well as misunderstandings on both sides. On March 1, Pacific ministers met with EC Commissioners in Brussels to take stock of the progress of EPA negotiations between the Pacific and the EU and to provide political impetus and guidance for the next steps in the negotiation process. The Pacific delegation was led by Samoa’s Associate Minister for Trade Negotiations and the Acting Lead Spokesperson of the Pacific Regional NegotiatingTeam, Hans Joachim Keil, and included Minister Martin Tofinga of Kiribati. The EU was represented by its Commissioner for Trade and its Commissioner for Development, Louis Michel. Both sides recognised the special situation and features of the Pacific region and agreed that the architecture of an EPA must reflect this while ensuring WTO compatibility and meeting the deadline of December 31,the 2007. Both sides agreed that negotiations must be accelerated. In so doing, the immediate focus must be on making rapid progress concerning the key issues of interest to the Pacific, ie goods including rules of origin, fisheries, investment, development cooperation and services.The Pacific and the EC agreed on the importance of converging quickly towards mutually acceptable outcomes that would allow for an EPA to be concluded by the end of 2007. In Fiji’s case, a quick return to democratic rule will see the release of development funds.Funds have been on hold awaiting the Government’s presentation on the case here in the country. As a result of the takeover, the EU considers that there has been a violation of the essential elements of the ACP-EU Partnership Agreement Let us all hope, EU assistance to Fiji will not be affected.

Tough Year Ahead for Fiji

Tough year ahead for Fiji: Economist

Wednesday, March 28, 2007 - www.fijitimes.com

THE Fiji economy is expected to contract by an estimated 2 per cent this year, according to a leading bank's senior economist.

ANZ Senior Economist Jasmine Robinson said the modest decline in growth was expected to be led by the tourism sector.

"Investment prospects are likely to remain uncertain until the interim Government provides greater clarity over macroeconomic policy and investment directions," Ms Robinson said.

"Recent downgrades to the outlook by major ratings agencies will weigh on investment decision. However, the revised budget goes some way in identifying measures to improve the business climate."

She said the persistent problems in two top major export groups sugar and garments were likely to remain unchanged as the garment sector continues to face stiff competition from the Asian manufacturing bases.

Sugar restructuring will need to feature more prominently as the industry adjusts to the phased reduction in the European Union sugar subsidies, she said.

"One bright spot will be tourism where recovery in visitor numbers will likely follow the calmer security situation. We expect a modest pick up in economic activity in 2008 led by recovery in tourist related activity," she said.

"However, the Fiji tourism sector would benefit from an added injection of support today to continue to uplift is international profile." She said further reforms were needed for a number of industries but guidelines should be considered to format this in a move to assist foreign investors and "get out of this weak position."

Fiji Chamber of Commerce acting president Swani Maharaj said Ms Robinson missed a vital point Fiji had learnt to bounce back on its feet after three previous coups.

"I'm not a doctor of gloom and doom," he said.

"I enjoy a positive outlook. I have faith in the interim Finance minister (Mahendra Chaudhry), who has introduced measures which will turn the economy around by November."

Mr Maharaj said the level of commitment from the people and the government was evident and promising.

He said if the EPA negotiations with the EU over the sugar trade did not materialise in Fiji's favour, the fall back plan would be to cut imports and prevent substandard items being dumped locally.

"For those migrating, there should be tighter control in paying out money," Mr Maharaj said.

"It shouldn't be paid in lump sum, but on a piecemeal basis for such cases.

"And foreigners who want to invest in Fiji need to borrow a maximum of 40 per cent locally, not like Natadola and Momi Bay where they borrowed everything they needed locally."

ADB Aid On Hold

$212m aid on hold

FREDERICA ELBOURNE
www.fijitimes.com- Wednesday, March 28, 2007

THE Asian Development Bank has suspended $212million in funds earmarked for capital projects.

In a statement yesterday, the bank said the interim Government must provide assurance that it would resume its international responsibilities before it could resume funding.

ADB regional director Sirpa Jarvenpaa said the matter with the interim administration was likely to be settled in the next few days which would enable the resumption of project funding.

She said the assurance needed from the interim Government included a commitment to provide an environment that would ensure the successful completion of the four major development projects the ADB had invested in.

The conditions also included counter-funding and adequate staffing in anticipation of the restoration of such terms "soon".

Part of the government commitment included covering past loans not only to ADB but to other banks and international organisations, she said.

The four projects covered by ADB include the third road upgrade, which cost about $65million of which $55.8m had been spent, the ports development project which cost $27.6million, all of which has been spent, the Suva-Nausori water supply upgrade which cost $77.3m of which $29.6m had been used and the Alternative Livelihood Project, which cost $41.4million of which several thousand dollars had been used.

Ms Javenpaa said the cost of doing business in Fiji needed to be scrutinised to improve the investment climate where better access to capital was enabled.

Other measures which served as a challenge for the economy included the need for funds for infrastructure services which would be vital for economies of scale and other benefits and relevant education, she said.

Further challenges in the need to shift gear smoothly included markets that supported labour mobility and flexibility alongside affordable social protection and arrangements that lower risks and uncertainty for business and allow new firms to enter and old firms to exit. Ms Javenpaa said the removal of at-and-behind-the-border impediments to integration were other crucial elements.

On the highlights of the ADB's outlook for 2007, she said Fiji was among two Pacific Island countries whose performance grew by 3.1 per cent and enjoyed a faster expansion while elsewhere in the region was not the same.

"Even before the coup, Fiji faced many challenges and 2007 looked as if it would be a difficult year.

"But now the attrition of confidence and loss of new aid flow may push the country into recession.

She said stabilisation was a key challenge for Fiji.

Modest Growth for Fiji in 2008 - ADB

Modest economy growth in 2008: ADB
www.fijilive.com Tuesday March 27, 2007

The Asian Development Bank says Fiji's economy is seen to emerge from a recession in 2008 with a growth of 1.3 per cent.

ADB regional director based in Suva, Sirpa Jarvenpaa said this is predicated much on the recovery of the tourism numbers between six to eight per cent in 2008.

She made the comments while releasing the Asian Development Outlook, the ADB's annual economic publication.

Jarvenpaa said while Fiji's foreign reserves will continue to be under pressure, the tight fiscal and monetary policies are expected to contribute to financial stability.

"But to generate the necessary level of growth for sustainable employment expansion against the subdued growth achieved over the last five years at 3.4 percent and 3.4 per cent in 2006, development challenges call for major structural changes. Particularly to attract more private sector investment.

Jarvenpaa said Fiji faced many economic challenges even before the 2006 coup and 2007 looks as if it would be a difficult year.

She said the 3.4 per cent growth last year was achieved on the back of agriculture, particularly sugar production, forestry, fisheries sectors and expansion in construction, and growth in services stimulated by consumption demand particularly in electricity and water sectors.

"Growth was achieved despite a decline in the tourism sector and the closure of the country's gold mine."

Jarvenpaa said economic performance in 2006 was affected by the continuing loss of preferential access in textile export markets reflecting in a steep decline in clothing industry in 2006 where production was reduced by 25 per cent.

"Imports grew by 12.7 per cent in US dollar terms in 2006 and exports fell by 1.8 per cent.

"While the surplus on services and transports increased primarily due to the personal remittances this was insufficient to offset the widening trade gap."

Jarvenpaa said exports remained weak last year and current account deficit widened, placing pressure on the reserves.

On private sector investment levels, Jarvenpaa said this remained low at the equivalent of eight per cent of Gross Domestic Product (GDP).

She said private investment should comprise the largest share of total investment that should exceed 25 per cent of GDP to generate the necessary level of growth.

March 1, 2007

Fiji Tourism Figures

Tourism figures

Letter to Editor; www.fijitimes.com - 28 Feb 2007

WHILE the FVB and Tourism Action Group are doing a commendable job, the general optimism published and broadcast widely in the media on Fiji's tourism recovery in Fiji in 2007 should be viewed with some caution.

It seems to be based on visitor numbers rather than on the more useful economic measure of financial yield that is, a visitor's monetary contribution to Fiji.

Painting such an optimistic picture on recovery of visitor numbers could lead to complacency on the industry's part on the one hand and funding reduction to the FVB and TAG by the Government on the other.

As a simple illustration on the fallacy of basing tourism recovery on visitor numbers, let's say a thousand visitors buy a net $500 package each will contribute $500,000. Whereas, a thousand visitors paying the 40 per cent discounted package now offered to the market will earn Fiji only $300,000.

Therefore, to make up the difference in dollar terms ($200,000), we need to attract 667 visitors over and above the one thousand visitor mark. In other words, it is simply not enough just to get back to the visitor numbers experienced in 2005/6.

As per the illustration above, Fiji needs some 66.7 per cent more visitors on the discounted packages just to get back to square one, let alone move forward to the billion-dollar goal.

I, therefore, predict that the full recovery of 2005/06 levels in dollar terms is still some 12 months away, provided of course that TAG's and FVB's concerted efforts continue.

And provided that the Government's policies and actions promote international goodwill that will eventually lead to the complete withdrawal of damaging travel advisories.

As I see it, the only real benefit of the resurgence of comparatively lower yield visitor numbers is more word of mouth advertisement if they return home after a Fiji holiday experience. The other and perhaps more important benefit is the greater ability of tourism employers to re-employ laid-off staff and restore full working hours for others as a direct result of restored visitor numbers.

I'll be very happy indeed if tourism financial yields in the next six to nine months prove me wrong.

Radike Qereqeretabua
Nadroga

February 24, 2007

Deficit Financing

When deficits are unnecessary

DR SUKHDEV SHAH
Friday, February 23, 2007

ECONOMICS Nobel Laureate James Buchanan published a book in 1979 that surprised economists. The book was called: Democracies in DeficitThe Legacy of John Maynard Keynes.

Keynes came up with a cure for the depression of the 1930s that started with The Wall Street Crash of 1929 in the United States, spread to the rest of the industrial world, and lasted for a decade until the beginning of the Second World War in 1939.

His was a very simple solution for lifting the industrial economies out of depression let the workers dig ditches and re-fill them! The underlying economics of the solution was contained in Keynes path-breaking economics treatise he wrote in 1936 named: The General Theory of Unemployment, Interest and Money, or The General Theory, for short.

Reportedly, when the US President Roosevelt was told of Keynes new insight on fighting economic depression digging ditches and all that he told his advisors: This (way of fighting depression) looked too simple. By saying this Roosevelt implied that if the cure for depression were so straightforward and painless, no country in the world would have suffered from it and for so long.

And the economic hardships caused by depression was for everyone to see in the US and elsewhere in the industrialised world: close to a third of labour force unemployed whereas full employment had been the norm; factories and banks closed; long lines at soup kitchens all across US to feed unemployed workers; and spreading gloom if the depression would ever end.

Keynes logic for fighting depression was simple but in no way simplistic. He understood but not in the manner others in the economics profession envisioned at that time what had caused depression and why this had been so persistent.

Industrial economies had built a massive amount of productive capacity since the industrial revolution began in the latter part of eighteenth century. As long as growth in production capacity was matched by growth in incomes and demand in about equal proportions goods produced in factories can be sold in the market place at their full cost of production that included normal return to producers for their efforts and labour, commonly known as profit.

This cyclical process supply creating its own demand and in an equivalent amount, according to the famous Says Law, named after nineteenth century famous British economist, John Say worked without a hitch for over a century, with only infrequent and minor interruptions in the smooth functioning of the capitalistic economy, which most people did not even notice.

But, nonetheless, some thinkers of the time, most famously Karl Marx in the 1860s, questioned whether the capitalistic system (which was another name for this cyclical process supply generating its own demand) was stable and fair for the workers who produced the wealth that yielded profits for the capitalists.

Marxs view was that capitalists took too much out of the national income stream in the way of abnormal profit and paid too little to workers for them to be able to afford buying all the goods they had helped produce and being sold at their full cost of production.

If the factories could not sell all the goods that had been produced at their given prices which Marx thought was inevitable, given the fact that capitalists saved (i.e., not spent) all the profits they took there would be unsold goods in the market, their prices would decline, factories would not get new orders, would operate only part-time or close down, and so workers would be thrown out of work.

If this downward spiral in economic activities persisted for a long time, the capitalistic system would collapse because of deficient demand for all that can be produced. Marxs view was pooh-poohed at the time he came up with the doom and gloom about the capitalistic system but he was vindicated when depression struck the capitalistic (i.e., industrial) world in the 1930s. There were many converts to Marxs theory about the unworkability of capitalism but Keynes fought back with his new theory of how to cure depression and, implicitly, how to prevent it from occurring again.

Here then comes the Government with its budget deficit Keynes invention of the panacea that can cure depression and also help the capitalistic system to make it depression-proof. It worked this way.

Government needs to open up its purse and spend freely. If it runs out of money, it should borrow and, because only the central bank of the country has the power to create money just by printing it at no cost it can open its spigot for the Government supply it with almost unlimited amount of liquidity, which the Government can use (spend) to end depression (offset the deficiency of demand).

The reasoning worked something like this. Depression happens because of lack of demand from people (consumers and investors) for the purchase of goods and services already produced and brought in the market place. In order to purchase (demand) something, people must have an income, which meant having a job. If government spending helped create jobs and added to the income stream, demand in the economy would increase, hereto-unsold merchandise could be sold, factories would receive new orders, they would begin hiring the laid-off workers and, eventually, everyone would get employed.

Keynes was careful to note that, since a lot of unused production capacity already existed (hence the depression), workers need not be employed for creating things of value (i.e., addition to existing supply capacity). It would be beneficial for the economy if, in fact, they created nothing.

Hence the advice: employ the unemployed workers to dig ditches and make them fill again! Not ridiculous advice after all given the circumstances!

Fijis case is different

The interim government has resolved to keep this years budget deficit at no more than 2 per cent of GDP (roughly $100million or same as proposed by the previous Government in November 2006), in the face of an expected shortfall of about $200million in revenue collections from the level estimated earlier.

This has invited opposition from some economists on whether this is the right move for fighting the depression that the Fiji economy is feared to be sliding into.

Some social groups and religious organisations also have opposed the Governments deficit control intentions. They fear this would require suspending programs and slicing expenditures, including allocations for social programs. Some of these are already funded poorly and any cuts would mean more miseries. I sympathise fully with these concerns. Any cuts in aid to the poor must come as the last, not the first, item in the Governments deficit control campaign. On the contrary, it would be wise giving the poor some extra help, since they are the ones who suffer most when times get hard.

However, I am opposed to the view that the Government not target a lower deficit than is likely with the expected decline in revenue because doing so, according to the critics, will induce or intensify depression. On the contrary, I would say that keeping a lid on deficit can be beneficial for the economy and the Government should go one step further and balance the budget not over the medium-or long-term but now and immediately.

The reason is simple, if one is able to think through with an open mind.

Fijis economy is passing through a difficult period low or non-existent growth, high job losses, declining foreign reserves, pessimistic outlook for the future. But this can hardly be said to be caused by low or deficient aggregate demand that is, too much supply chasing too little demand.

In fact, the opposite can be said of the current situation. There is an excess of demand in the economy (most of it courtesy of Governments deficit spending binge over the years), which is not being met by available supply amount of goods and services produced inside Fiji.

As a result, unmet demand in the economy is leaking out into imports and, with export stagnant because of the shortage of supply of most items available for export, the trade and balance of payments deficits have ballooned, which must be paid for by the drawdown of foreign reserves held at Reserve Bank and/or by borrowing overseas. And, in fact, both of this is happening. The RBF has been losing reserves for some time now, and, lately, it has borrowed funds from overseas to maintain reserves at a comfortable level.

Therefore, in the given situation of limited capacity to expand production, any addition to demand will mean the worsening of trade position and loss of reserve.

Because of the reason that this is already happening and probably for some years the logical thing for the Government to do will be to reduce aggregate demand, not add to it by maintaining or increasing its budget deficit. Any measure of control of budget spending to help rein in the historically fattened budget deficit will protect exchange reserves and reduce the threat, for example, of a devaluation. The cure for Fijis economic malaise short-term and long-term is not for the Government to resort to pump-priming which is what fighting recession with budget deficit is known as but working to soften the supply constraints, focusing on items that could be exported.

For numerous reasons, output in all major sectors of the economy been stagnant or declining, and there is no reason to believe that we have seen the worst of it.

And the same difficulties plaguing recovery in traditional sectors of the economy have discouraged new initiatives for growth in other sectors, making it harder for anyone to believe that recovery is just around the corner. Until a solution to Fijis supply problems is found which, in my view, is rooted more in social and political choices the country has made and less related to its economic fundamentals aggregate demand needs to be kept in check, not expanded, which, as the preceding analysis shows, can be a dangerous thing to push for. A balanced-budget stance is the minimum this Government needs to adhere to for keeping the economy in reasonably good health.

February 8, 2007

Fiji Civil Servants Targeted

Economic Growth Projections Slightly Lower Than Predicted
The closure of the EGM has slowed economic growth.The Reserve Bank of Fiji has revealed that economic growth projections for 2006 are likely to be slightly lower than the previous forecast of 3.6 percent.The RBF said economic growth was affected by a slowdown in the tourism industry as well as the closure of the Emperor Gold Mine in early December. It said visitor arrivals projection for 2006 has been downgraded from 576,000 to 540,000, and as a result, growth in related industries will be affected.The Reserve Bank states that the closure of the gold mine on 5th December caused the mining and quarrying sector to decline by 49 percent, in the year to December.

The slowdown in the tourism industry has also affected economic growth.The tourism industry recorded a modest performance up to the third quarter of 2006 with visitor arrivals totalling 419,000 for the first nine months of the year.However, the RBF said travel advisories issued by certain governments following the political events of December 2006 slowed the flow of visitors. This resulted in the loss of jobs for some casual workers and reduced hours for permanent staff at various tourist establishments in the country.Although there was a slowdown in tourist arrivals, the sugar industry registered a good performance up to December 2006.
The RBF said mill reports indicate that around 3.2 million tonnes of cane was crushed up to the end of December, representing an annual growth of 9.3 percent. Sugar production amounted to around 307,000 tonnes, representing a growth of 2 percent on an annual basis. Meanwhile, the 2006 year end official provisional foreign reserves level was 823 million dollars, which is sufficient to cover 3.3 months of goods imports.
Civil servants not spared the rod
But just a reminder to the unions and their members: they should be mindful that we now have a government that inherits it political power from the barrel of a gun - so follow its plans
By MAIKA BOLATIKI -Political Editor - www.sun.com.fj - 7 Feb 2007.

The political situation in Fiji is not very healthy.This is because members of the global family of which Fiji is a member, have jointly condemned the removal of the Laisenia Qarase-led democratically elected government by the military.Even though we now have an Interim Government led by Interim Prime Minister Commodore Voreqe Bainimarama, the global family stands by it stance against Fiji.All they want is the return of democracy.The political instability has a negative effect on our economy.We now have a very weak economy, something the Interim Government has to address very quickly.At the same time, however, we must applaud the government of the day for quickly reacting to salvage our economy.Already it has put in place plans for economic growth.In its recent Cabinet meeting the Government had agreed to an additional $3.8 million to the Fiji Visitors Bureau to fund the marketing recovery plan of the tourism industry.This will be in addition to marketing funds already provided in the 2007 Budget. The additional funds will be allocated through the normal budgetary process.Interim Minister for Tourism, Mrs Bernadette Rounds Ganilau. Says: “There is a need to aggressively promote now to be able to sustain our visitor arrivals, foreign exchange earnings and employment levels by the next tourism seasons of March to October. The target for visitor arrivals for 2007 has been revised down to 514,000 with an estimated tourism receipt of $888.1 million.”The additional funds are to aid a quick recovery that is more intensive than the 2000 strategy.In addition to the Government’s plan to improve our economy, there are other measures now in the pipeline and one of them is to cut government costs.This will not be popular especially among civil servants.They are not going to be spared the rod in the move to recover our economy.It is a well known fact that when Interim Ministers were appointed by the Interim Prime Minister and Commander of the Republic of Fiji Military Forces, Commodore Voreqe Bainmarama, they were given specific terms of reference to be achieved in 12 months.One of the terms of references for each Interim Ministers is to carry out investigation on corruption.Another is to cut costs.The Interim Minister for Public Service and Public Sector Reform, Poseci Bune, has received instructions to slash civil service costs by $70 million.It is a tough call but because we now have a government that inherits its political power from the barrel of the gun, it has to be achieved.Civil servants had been told they would not be paid their cost of living allowance (COLA) Permanent Secretary for PSC Rishi Ram officially relayed this information to the Confederation of Public Sector Union (CPSU) secretary Rajeshwar Singh.The public sector unions had signed an agreement with ousted Prime Minister Laisenia Qarase last year that include COLA arrears to be paid include $9m - 20003; $16m - 2005; $18m - 2006; and $18m for 2007.Mr Ram said the Government had totally withdrawn that agreement as it just could not afford to honour itThe Fijian Teachers Association and the Public Employees Union (PEU) are totally against the decision.FTA president Tevita Koroi said the government of the day should honour the agreement signed by the ousted government.PEU secretary general Pita Delana said the agreement they reached with the ousted Prime Minister was a 4 per cent across the board payment 2005, 2006 and 2007. - 2 per cent payment across the board Jan 1, 2006 and 2 per cent merit payment 2004 Jan 1, 2005.All these are now down the drain.Another measure that the Interim Government is now looking at is to lower the retiring age from 60 years to 55.This move will save the nation $10 million but close to 3,000 established and unestablished civil servants will be without jobs Fiji Public Servants Association general secretary Rajeshwar Singh revealed the figure to Mr Ram in their meeting on Monday.All unions except for the Fiji Teachers Union are totally against the move.About 900 teachers would affected and Mr Bune said this would create 900 employment opportunities in the profession.The Interim Minister of Finance, Mahendra Chaudhry, has announced that there is a possibility of a 5 per cent pay cut for civil servants when the new budget is announced in March.Civil servants should now brace themselves for the pay cut, as it will be implemented as a means of economic recovery for the Government.Some civil servants experienced the same after the 1987 and 2000 coups.I must admit that it will be very painful for these honest workers.It is now time that families and individuals made plans to re-adjust their budgets to accommodate the forced pay cut.In 1987 the pay cut was implemented in September, four months after the coup.In 2000, the 12.5 per cent pay-cut order came in around July, two months after the May 19 coup. It also included ministers in the then interim government led by Laisenia Qarase. Now the pay cut is as early as March only three months after the coupThe pay cut will have effect on the business community as people will spend less and the economy in general will contract.The CPSU is totally against pay cuts and likewise other unions.It is a fact that civil servants are now used to solve Interim Government financial woes.It is a harsh decision and the Interim Government has also to accept harsh actions to be taken by the workers affected.The pay cut will have a lot of social impacts.The pain of the clean up campaign has touched the hearts of most of the people of Fiji.It is a fact that we now have to face the hardship of the clean up campaign in the next five years.The government of the day should prepare for a trade union backlash.Unions around the country will not want their members to suffer from the planned pay cuts and the lowering of the retirement age.But just a reminder to the unions and their members: they should be mindful that we now have a government that inherits it political power from the barrel of a gun - so follow its plans.We must have patience with the new leadership. My advice is just to sit back and wait for an expected outcome without experiencing anxiety, tension, or frustration. It is a time that we must have the courage to fight off the social impacts that will be part of the government plan.

January 26, 2007

Kiwis Help Not Criticise!

Kiwis told to help, not criticise

www.fijitimes.com - Friday, January 26, 2007

NEW Zealand was yesterday urged to be more supportive and less critical of the problems faced by troubled Pacific island countries such as Fiji.

New Zealand Pacific Business Council board member Mike Flanagan also urged the New Zealand media to take a more active role in reporting on a broader range of issues in the Pacific and not just bad news.

The New Zealand Pacific Business Council facilitates trade between New Zealand and Pacific nations.

New Zealand exports goods worth more than $NZ1billion ($1.176billion) to 23 Pacific islands.

Almost half the sum is from Fiji, Papua New Guinea, the Solomon Islands and Tonga.

Mr Flanagan said it was seldom that the geopolitical and economic reality of the crisis in the Pacific and their likely consequences were reported.

He said New Zealand and Australia should reconsider its uncompromising stand with Fiji, as the victim of any censure is the general population.

Mr Flanagan said the latest developments from Fiji indicated a welcome step back to a constitutional government.

"It appears that in Fiji, as in Tonga, the Pacific way is the preferable way to resolve disputes."