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"Leases are expiring and land is being withdrawn from agriculture," he said.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