Bomb Scare for Fiji’s Economy and IG’s Future

I am told that the bomb scare cut short Dr Biman Prasad’s “dressing down” of Fiji’s post-coup economy. But it was already pretty clear even by that stage of the Prasad presentation that Chaudhry and the IG have been significantly overestimating both the economy, and their own abilities to manage it!

 Prasad was apparently still questioning the RBF’s economic forecasts for 2008. As a guideline, he pointed out the 2007 forecasts which started out at -3.0%; and was then revised mid-year to -3.5%; and then declared at the 2008 Budget presentation to be -3.9%. But tellingly, Prasad predicted that as last pieces of data for 2007 dribble in, he is predicting the final economic “slowdown” figure to finish up at greater than even -4.0%.

 That is a real slap in the face for Mahen’s alleged economic management and leadership credentials – especially after the 2000 IG already showed him how to revive an economy in short order. This really puts his constant criticism and fault-finding of all the Kubuabola budgets into a more accurate perspective.

Moreover, Prasad stated that although the post-coup economic decline had finally now “bottomed out”, he went on to claim that the economic “re-growth” bounce predicted by the RBF for 2008 had not yet begun! And nor was there much indication that it would or could begin absent the Government fiscal intervention that Mahen is effectively ruling out by his amateur and pig-headed insistence on keeping Government Spending at within 2% more than Revenues. The reason given by Prasad for doubting the RBF growth forecasts, was his industry-by-industry analysis of growth prospects in Fiji’s main economic sub-sectors. Sugar, Tourism, Fishing, Remittances, Gold, Timber, Services, Construction etc. were all down or flat, with little chance of growth or increased exports! So where then would the alleged 2.2% 2008 growth come from?

 The big “party pooper” according to Prasad was Sugar, where Prasad pointed out that EVEN if the IG managed by some miracle to solve the land, production and restructure problems without the EU’s $200 million, there was one dynamic which no-one was even addressing, but which would still single-handedly torpedo all of Mahen’s Sugar hopes and plans. And that was the fact that all over Fiji, farmers (both Fijian and Indian) are voting with their feet, and either leaving Sugar for cash crops, or simply leaving farming altogether. In the past, son’s could normally be relied upon to follow their fathers into farming, but now this is simply no longer the case in Fiji. Prasad pointed out that since this was a Fiji-wide AND worldwide trend, it was difficult to imagine it being reversed this year or ever, regardless of CBUL or leases or mill repairs! Not that Sugar is doomed, but just that it is in inevitable right-sizing contraction that will mean a lot of wasted money if the exact “right-size” is not properly anticipated.

 This means that there is a whole s..tload of unavoidable political fallout in store for Mahen, the FLP and the Regime as these economic chickens continue to come home to roost over the coming pre-election year. How long can Frank & Mahen continue to stave those political consequences off with their usual political grandstanding to Indo-Fijian interests and sensibilities? And then how will they entice broader participation into the NCBBF/Charter if they chose that usual path of ethno-partisan grand-standing again?

 Make no mistake people – the squeeze of cold, hard reality is slowly contracting around the Regime. And they know it, too!

 And so in what is potentially a bomb-shell rumour, I hear that Parmesh Chand “walked out” of the PM’s ministry office very recently. The way the story was related, the implication of “walked out” was that he’s gone for good. Apparently his wife in NZ is very sick, and Parmesh now just wants to leave all the controversy, heartache and tribulation of his current job to be with her indefinitely. The fact that we haven’t heard any comments from Parmesh on anything recently, especially when specifically asked to give Government’s response to recent news items, could mean something is indeed up. Apparently those in the know amongst the Regime’s “fixers” are frantically trying to conceal the defection and cook up some kind of cover story. Truth be told, this sounds just too good to be true! I also have not heard any independent confirmation of the details, or whatever else may have gone on. But whatever the truth is, it will come out sooner or later in some way or other.