by Dr. Tupeni Baba; published 31 July 2000

The mini-budget announced by the Qarase group is anti-people. Under the guise of providing a set of measures for the "restoration of the country", the Qarase budget is anti-poor and pro-rich. Viewed in its totality, the Qarase group will not be able to restore the conditions for economic growth; it will fail to restore confidence in the country, and will worsen the suffering of the vast majority of people of Fiji. What it will achieve, however, is to put more money in the hands of a privileged minority.

ECONOMIC GROWTH

Since the terrorists struck Fiji, the nation has been in turmoil. The terrorists attempted to destroy the multiracial foundation of Fiji. If they had limited success in this - as judged by the vast majority support for the Peoples Coalition Government even when it was in captivity - the terrorists succeeded in completely destroying the economic foundations of the nation. After years of doom and gloom, the Peoples Coalition government had boosted investor confidence in the country. This year's growth rate was expected to be 6%. With the actions of the terrorists, Fiji will see a decline in the nation's income by around 20% from what we would have achieved by the end of the year.

It is ironic that in his pre-budget address, Qarase stated: "A return to the pre-May 19 position would simply lead to more chaos and instability. It would not work. That is my sincere view and most people I have spoken with think the same way."

What utter nonsense!

It was the pre-May 19 conditions which had seen rapidly rising employment opportunities, rising investment, declining inflation, lower interest rates, declining poverty, better social welfare provisions, better health services, cheaper and more affordable housing, cheaper utility (electricity, water and phone) rates, and intensive rural development.

The very foundation on which the Qarase budget is built is faulty. One can not but wonder whether Qarase and his team have any idea at all of the realities of Fiji or whether they are imposing on the people of Fiji their own highly jaundiced view of how people in Fiji should live. Or is it that Qarase and Co. have started believing in their own lies about benefits of development for ethnic Fijians. In fact, Qarase refers to his own speeches in the Senate where, it is now well known, he misled the Senate on the status of ethnic Fijians under the Peoples Coalition Government. The lies continue.

Let me give specific examples. Qarase states: "from 1975 to the end of 1999, it is estimated that total earnings from sugar sales to markets in Europe under the Lome Convention exceeded $3.5 billion dollars. About half of that comprised the premium or windfall by selling our sugar at the Lome price, and not at world free market prices. Yet not a cent of that windfall was ever shared out to the Fijian landowners."

Such marked lack of understanding of how the economy operates coming from a so-called financial wizard is itself enough to destroy confidence in the leadership ability of Qarase and his team. The Sugar Cane Growers Council has very correctly pointed out that over the years, the UCV's of sugar cane land owned by ethnic Fijians has increased by 500% within the same period. Qarase would do well to learn that land rent is based on UVCs. And he may wish to compare the UCV trends in non-cane land over the period.

Another example of the lies is Qarase's reference to the $28,000 grant to evictees. Qarase will not deliberately accept that the SVT government had begun a program of resettling evictees. And the cost of resettling each evicted family was $28,000. What the People's Coalition government has done is to open the option of the evictees of resettlement to taking the equivalent cash sum and relinquishing any right to further government assistance. The provision of the option is rational economics. But Qarase continues with the lie that it is compensation to farmers while the landowners are left with "their depleted land". He has plainly mixed-up the provisions of ALTA on compensation and penalties, with the resettlement schemes of the SVT and Peoples Coalition Government.

The mini-budget, in short, is based on such lack of understanding of the hard realities of Fiji. It is unfortunate that the vast majority of people of Fiji will become the victims of the ignorance of Qarase and his team.

Investor, consumer and worker confidence are the three vital ingredients for economic growth. The fourth is a nation's reputation in the community of nations; this is particularly important for a nation like Fiji which depends heavily on preferential trade agreements and foreign aid. Confidence and our international reputation depend crucially on the underlying philosophies of economic policy making. If the philosophies are untenable, there will be no confidence in the economy and we as a nation will remain a pariah nation. The economy will be the ultimate casualty. And so will be the people.

Qarase specifically states that the mini-budget, particularly expenditure allocation under it, has been based on the Blueprint for Fijian Development.

While the Blueprint was endorsed by the GCC, everyone knows that the GCC endorsement was done when the Government of the day was held hostage by terrorists. That Qarase seized the tense environment to push forward a document based on his own racist views is deplorable. The motivation for the Blueprint is clear - it is to entrench racism in the country.

Seeking racial superiority in today's world will not be acceptable to the Peoples Coalition. The global community has also made it clear that it will not accept racial intolerance and oppression. The world has moved significantly away from the Nazi days. The ethnic cleansing experiments of the 1980's has further solidified international opinion against any philosophy proclaiming racial superiority. That Qarase still clings to the Nazi-type philosophy of racial superiority will provide the death-knell to Fiji's international standing. Again the casualty will be the economy and the vast majority of people of Fiji.

The numerous programs proposed in the mini-budget supposedly for the ethnic Fijians will further entrench the handout mentality which has prevailed within the ethnic Fijian community for decades.

International as well as Fiji's own experiences show that a handout mentality has not worked for the whole community. Granted that there will be numerous individuals who will gain massively. In Fiji we have the living example of the Fijian Holdings Limited. The benefits which the scheme has provided to a handful on individuals, including Qarase, is well known within the ethnic Fijian community. That the Qarase budget is aiming to further strengthen the handout mentality will not be acceptable to a vast majority of ethnic Fijians who know the abuses of the system and the wealth it has provided to a select few. The mini-budget will further divide the ethnic Fijian community between the haves and the have-nots.

If ethnic Fijians are to participate in the modern economy, what is needed is the rise of an entrepreneurial class of ethnic Fijians, not the rise of a crony-class of investors. The mini-budget, and the Qarase underlying philosophy, including the Blueprint, will not be able to create the entrepreneurial class within the ethnic Fijian community. This is for certain.

The Peoples Coalition government had a well-articulated plan for ethnic Fijian development. The numerous policies which the Peoples Government has put in place and was putting in place would have seen a rapidly emerging entrepreneurial class of ethnic Fijians. The policies, of course, would have limited the opportunities for enrichment for a select few who had hitherto lined their pockets through cronyism. The Qarase philosophy and the mini-budget are intended to further entrench the select group of cronies.

ANTI-PEOPLE POLICIES

The mini-budget and the set of policies announced by the Qarase team are anti-people.

The Peoples Coalition government, on the other hand, had put in place numerous policies to help the poor people of Fiji. These were:

This would have seen another round of significant reduction in prices of these item and the inflation rates. Further macroeconomic consequences from this would have followed for example, further reduction in interest rates, greater consumer demand for durables, more employment, etc.

There were numerous other pro-people policies which were to be contained in the National Development Plan which was to be launched in July. The Peoples Coalition government had, through prudent financial management, a surplus in the 2000 budget to the tune of $47m for the first quarter of 2000. The revenue trends were much better than expected. Careful expenditure management would have seen massive savings. All these were to be channeled to benefit the people through a better social package in the next Peoples Coalition budget.

The Qarase team, on the other hand, has begun reversing the pro-people policies.

The poor people of Fiji, whether these be ethnic Fijian or ethnic Indian, or others, will all feel the brunt of the anti-people policies of the Qarase team.

By the end of this year, Fiji will see a much higher poverty rate than what even the SVT government had left behind when it vacated office. When the Peoples Coalition Government came into power, one-third of the population was below the poverty line and a further 25% were on the risk of falling in the poverty trap. The Peoples Coalition government had arrested this trend. The massive increase in employment forecasted for this year under the Peoples Coalition government together with the falling prices of essential items and a good social welfare package saw the reduction in the poverty rate. It was the Peoples Coalitions' intention and plan to eliminate poverty from Fiji within its term of government.

The Qarase team's policymaking record so far, including the mini-budget, punishes the poor, the needy and the working people of all ethnic groups. These will create further internal ill will, division, and instability in Fiji. The mini-budget does nothing to create investor, consumer and worker confidence in the nation.

The Qarase team will entrench poverty in Fiji. It will entrench racism in Fiji. It will further erode investor, consumer and worker confidence in the nation. It will leave behind a legacy which will be worse than the SVT's record.