By National Federation Party Leader
Professor Biman Prasad
[This is Part 1 of NFP Leader Professor Biman Prasad’s speech to the Suva Rotary Club yesterday]
Thank you for the opportunity to speak to you. I want to speak a little bit about our current situation and some aspects of the Fiji economy and what we at NFP want to do about it.
Please do not be surprised if you also read some of this speech in The Fiji Times. This week The Fiji Times wants us to write in our column about how we will create economic growth. So we are doubling up with this speech. Preparing material like this while we’re on the campaign trail is demanding. To use the phrase now famous in Fiji, we are pressed for time!
We last met together four years ago. At that time, NFP was coming out of eight years of dormancy imposed by the 2006 coup. We were struggling to be heard in a polarised political environment where the government held all the cards. They had made up the electoral system, without consultation. The government heavily controlled the institutions of the state. They frightened the media. And, as we all know, they also frightened the people. It was difficult to make political headway. We fought on. We made the threshold and got into Parliament. I believe we have performed well in there.
So-called Parliamentary democracy has not been easy. Soon after Parliament first sat I was appointed chairman of the Public Accounts Committee, because the rules required an Opposition member to be chair. This has been the rule in Fiji since Independence.
But as soon as the PAC began asking hard questions of public servants about misuse and waste of public funds, the Government decided to change the rules. Now a Government MP is the chairperson. And we might as well not have a PAC. It is only about good news now.
Parliamentarians have been suspended for long periods on baseless grounds. Everything is set up to allow Government to push legislation through, sometimes with only half an hour’s debate. If you watch Parliament on TV, one person dominates. He seems to answer nearly all the questions asked of the government, to propose most of the legislation and generally to be able to behave in any way he likes. In short, Parliamentary democracy does not look very different from the eight years that went before it.
But I have to say that the reception that NFP is receiving in this election campaign is very different to last time. The Fiji Sun’s highly scientific opinion polls are giving us 1 or 2% support. A week later, it stratospherically increases to 9% or 10% and then the following week it schizophrenically takes a plunge like the stock markets during the global financial crisis almost a decade ago.
It may surprise you but we are quite encouraged by that. It means that we know for sure that Fiji Sun’s polling is completely without basis. We will certainly get more support than the 6% we got last time; that is obvious. Our meetings and our social media interactions show strong support; and we still have a long way to go in this campaign.
Frank Bainimarama, in Nausori last week, dismissed us as an Indo-Fijian party. But that is not true. Certainly that is where the party’s political support has traditionally come from. But in the last few years, this support has been transformed. We would not have made the threshold last time without the support of voters from the Taukei. This year we have a genuinely highly qualified multiracial line-up contesting the elections. In our nightly pocket meetings, we are attracting a strong multi-ethnic mix of people who want to meet us, hear from us and our ideas.
So we are pretty excited about this election. We are playing to win. We are not in coalition with anyone. Of course everybody asks if we will go into coalition after the election. That is a fair question, because I think it is possible that no party will come out with the 26 seats they need to form a government.
The answer is that we will make any such decision once we know the results. We will decide based on what will be the best government for our country at that time. It is pointless to speculate now. The PM attacks us frequently. He tries to group us with SODELPA. I suggest that he calms down and keeps my mobile phone number with him on election night. He may need to talk to me.
So, what about the economy?
The Government talks a lot about Fiji’s economic success. But dig a little bit between the surface, and you will find a different story. Fiji’s economic success is mostly a propaganda creation. The Government tries to claim the credit for Fiji’s economic growth. Many of you in this room are people in business. You know, as well as I do, that Government is mostly an obstacle to economic success.
The reason we have had any growth at all is only because we have been able to avoid a military coup for 12 years. This has created some confidence. But the growth we are achieving is not close to enough. We have averaged just over 2% p.a. economic growth since 2006. Compare this to economies like Mauritius, the Philippines and Singapore, which regularly perform over 5%. Everybody knows that we need numbers like that to make a real difference to our economy. And Fiji is capable of this. The question is how we unleash that potential.
I am a believer in the old economic axiom that “everything is connected to everything else.” If economics cannot make a better society, what is the point? And the same is true of economic policy.
Most of us believe that more money would make us feel better. But many of us in Fiji have even more basic needs. One-third of our people live in poverty. Many need basic housing. But some of our biggest problems are social. We have a shocking suicide rate. Our domestic violence levels are also serious. One woman a day in Fiji suffers permanent injury as a result of domestic violence. We are a world leader in NCD incidence. The CWM Hospital performs three diabetic limb amputations every day. In short, outside of the walls of this nice hotel where we have just finished a fine lunch, we have a society that is at breaking point. And this government does not seem to have a plan for any of this.
We are criticised for our promise of a $5 per hour minimum wage. Of course we will phase it in, and of course we will do it in consultation with affected employers. But we must do it. If you look around the world, there is an increasing concentration of wealth among fewer people. As a result, there is tremendous political dislocation – look at Brexit, look at the election of Donald Trump.
We cannot afford to let this happen here. If there is increased disparity between the rich and the poor, there will also be dislocation here. But we know in Fiji what that means. It means the potential for instability, crime and violence and political unrest. That is the worst thing for the economy. It will destroy economic confidence. So policies which put a decent income in the hands of the poorest people are not a cost to us. They are an investment in our future economic stability.
The Government seems to have run out of ideas. The PM cannot talk about anything except the opposition parties. He talks about a vision for the future, but he has none. We have serious social and economic problems. These will not be solved by handing out $1,000 grants and flying around the world talking about talanoa. And if he does not have a vision for the economy, he should step aside. Because we do
A vision for the economy
[This is Part 2 of NFP Leader Professor Biman Prasad’s speech to the Suva Rotary Club on Thursday]
Fiji’s economic growth right now depends on two things – tourism and government spending. With tourism, we have been lucky. We are an attractive country for tourists and tourism is a fast-growing global industry. The economies in our main source markets have performed well. So we have achieved some growth. We have not achieved the 1 million tourist target that the government has promised so many times to achieve. We have not even hit 800,000.
And while tourism growth looks like a success, many people in the tourism industry do not see it that way. The industry is hopelessly over-taxed and the government does not listen. Why does the government tax tourism? Because no other industry is producing anything. There is nothing else to tax. The only other way to fund government spending is by debt. And this is our next problem.
The government does not have an economic strategy. It has a political strategy. The strategy is to spend on gimmicks and projects that people can see, so they will be popular. But this is not strategic. A road is nice to see. And it is nice to get a $1,000 grant. But the government is not strengthening both the education and the health sectors. That is because the spending needed there is unglamorous. There are no headlines there.
Mr Sayed-Khaiyum has just criticised the Fiji school curriculum as irrelevant. This is a senior Cabinet minister. Did he not know that before? Where has he been for the last 12 years, while we have been calling for an in-depth Education Commission to look at education?
Government spending is always good for GDP growth. But even this is a bit of an economist’s trick. We all understand how it works. If the Government spends money, then big companies, their employees, their own sub-contractors, are all recorded as receiving income. And that is how you measure GDP growth.
But when you are growing the economy by going into debt, as this government has done, it is like mortgaging your house to hold a big party. One day there will be no more money – and that is when we will need to build new rooms and fix the roof.
The Government talks a lot about its spending. But of course nobody has looked at the quality of that spending. Nobody is allowed to. I was removed as the chairman of the Public Accounts Committee. When the Auditor-General criticised the Government’s economic management, he was made to publicly apologise for his mistakes in a humiliating press conference. And while the Government is racking up debt, it is not improving the welfare of our poorest people.
The government is missing out on our economic potential – particularly beyond the tourism industry. Let us first acknowledge that tourism is important. The wages are better than many industries, jobs are created and we earn foreign exchange, although a lot of that foreign exchange goes back out again.
But this government has failed to create sustainable linkages to local agriculture. I know that many people in that industry have worked hard to improve these linkages, and there have been small successes. But small successes are not enough. We have to revolutionise our agriculture.
The government’s support for agriculture in Fiji, in one word, is pathetic. As many parts of the world get richer, they are demanding high quality food from countries with unpolluted environments. We have the land, the climate, ready access to finance. But we have been unable to take advantage. And why? Because government does not have a vision to grow agriculture. It has no idea what it is doing.
Meanwhile, look at the private sector. Look at companies like Rooster Chicken and Goodman Fielder like British American Tobacco. They do not just participate in agriculture themselves. They have contracts with hundreds of farmers. They support them with materials and technical assistance. In both the chicken and tobacco industries, Fiji is self-sufficient. Think what we could do if we focused on getting more focused investment of this kind and were able to turn other agricultural crops into exports.
Thousands of bottles of Fiji Water are sold every day, all over the world. And yet the Government is unable to take advantage of the promotion this gives us, every day. We want to tell the world “You know Fiji for water. But we can grow things too”.
Government forgot about the sugar industry after 2006. They only remembered it when elections were coming. And if they are re-elected they will forget about it again. The so-called strategic plan for the sugar industry cannot even tell us what products the sugar industry will produce, who will produce it and who will buy it.
Many of us in Suva have written off the industry. We cannot afford to do that. Too many people depend on it. But we do have to be smarter. We will probably never reach the glory days of the industry 30 years ago. Many families have left the industry and will not return. But for those who still want to farm, what we want is more efficient production and better returns for farmers.
And do not forget this very important thing – we need farmers. Farmers who grow cane today are farmers with the skills also to grow other crops tomorrow. They can also be the foundation for an agri-business economy, where Fiji should be strong. Like New Zealand, a country that is right next door to us. That is why keeping the farmers on the land with a guaranteed price of $100 a tonne is important. And of course it is not the price per tonne of cane which is the most important thing. It is how we get the most sugar out of that tonne of cane. If we can produce sugar more efficiently, we can all get better rewards.
We need to be investigating the potential for new, higher value sugar products. We cannot just keep sending out raw sugar in ships. We are criticised for promising to build a new mill at Rakiraki. But, if we get it right, we can build a modern mill which is much cheaper and more efficient than the current FSC mills, which are now museum pieces.
We have got to grow the economy in so many other ways. For example, take the outsourcing industry. We have good English skills, yet we have largely missed the boat in the call centre and business process offshoring industry, with only a few players here, employing only a few hundred people. We should be employing thousands more. And, again, if we get the right industry players, this is an industry that employs technology, develops individual skills and trains people to move up the value chain. What is the government’s plan for that? What is the government’s plan for anything?
I want to talk briefly about productivity. The statistics show that the productivity of our employees has barely changed for many years. We are not getting any productivity increases. This is basically because we are not educating our workforce. We have the FNU grants. Much of this money is unused. So the Government now wants to take this money and put it into a health programme. What it is really doing is admitting defeat. It does not know how to invest this money in training to achieve higher productivity. Once again – there is no vision.
And finally, I want to talk about government regulation.
Fiji is a small country. We cannot change the fact that we are a small country. We cannot change the land we have, or the people we have. But we can change things like the way we support investment.
The Fiji First Government has certainly changed that. In the wrong direction. In 2006, the World Bank ranked us as 34th country in the world for ease pf doing business. That ranking is now 101. For ease of starting a business we were ranked at 55. We are now ranked at 160. There are only 190 countries! Those figures tell the whole story about a control-freak, bureaucracy-driven government that cannot support new business and investment.
The government thinks it can fix this by “reforming” the civil service. But all they want to reform is civil servants’ jobs. They refuse to look at the obvious problem. It is their own rules and regulations that promote inefficiency and waste. And if the going is not going to change the way it behaves, then the people will have to change the government.
I have much more to say on these things, and in the next few weeks I hope you will see and read more of what we all say. We have a vision for the economy, some of which we have shared today. The first thing we will do in government is share the vision and ask for comments, criticism and improvements at a National Economic Summit, in which everyone can participate. Then we will work on that vision – together. Imagine, just having a government that consults us would be a huge change. And, as we at NFP like to say, change is coming.