The Truth About the Economy.

Standing amid the smoking ruins of our economy, RBF Governor Savenaca Narube is putting on a very brave face.

The years 2007 and 2008 promise to be the worst two years in our economy’s coup blighted record. Previous coups have seen the economy take a hit and then bounce back. In 2000, the hit was smaller than in 1987 and the bounce-back of 2 per cent growth in 2001 reversed the 1.7 per cent contraction in 2000.

 When Mahendra Chaudhry took the reins it was clear that he thought this experience would be repeated. Instead the economy shrank by 4.4 per cent and. even on the illegal regime’s own estimates, the bounce-back will not even recover half of what has been lost.

 Savenaca Narube is trying to tell us we will get growth of 1.7 per cent, less than the forecast 2.2 per cent, but still growth. ANZ senior economist, Jasmine Robinson, has said 1 percent is possible, but no-one in the business community expects it to be that good.

 Narube’s optimism suggests that he has the Chodopu$$ tentacles pulling at every part of his anatomy. There is nothing in any of the information put out by the RBF to indicate anything other than despair.

 Try these few samples from the June RBF Economic Bulletin:

 “lending for investment purposes by commercial banks and imports of investment goods continued its downward trend.”

 “the results of the Business Expectations Survey and Fiji Employers’ Federation Expectations Survey, which point to a decline on capacity utilisation and planned investment in building and machinery.”

 The increase in the number new taxpayers coming into FIRCA’s system declined dramatically to equate to “an annualised decline of around 11.0 percent.”

 “Commercial banks’ annual credit growth slowed to 4.7 percent in April, compared with 12.4 percent in the corresponding period last year. The slowdown is largely attributed to lower lending to the building and construction sector and borrowing by private Individuals.”

 In short, nobody is investing and for one obvious reason: the State apparatus in the hands of thieves with no respect for law or the rights of anyone.

 Are there any bright spots? Well job vacancies have increased, but all this means is that the flow of skilled people emigrating to escape the disaster that is the Fiji economy has increased.

 By contrast, remittances from people who have left Fiji and are working overseas dropped by 20 per cent last year. People are still sending money home to help out family but no-one would dream of investing in a house or a business in Fiji at the moment. Local business people are trying to think of ways of escaping and taking their savings with them.

 What Mahendra Pal Chaudhry hasn’t factored into his calculations is his own incompetence. He is a cunning and ruthless politician but he is no economic manager. He doesn’t understand business and he no doubt thinks he can ignore advice from economists if it doesn’t suit his political machinations.

 A good example of the incompetence of his economic management of the economic management is the imposition of a new export tax on the only growing export Fiji has, mineral water. At a time when export income is desperately needed to avoid devaluation, this can only serve to dampen growth in exports.

 If you increase the cost of anything, you are generally going to sell less of it. It may surprise Fiji’s economic genius, Mahendra Chaudhry, but Fiji is not the only source of mineral water in the world.

 CORRUPTION FIGHTER

11 Responses to “The Truth About the Economy.”

  1. Groggymaster Says:

    Chaudry has mis-managed the economy so badly that with the benefit of hindsight, the coup of 2000 appears to have been justified.
    SDLs management of the economy wasn’t that good either, but the SDL understood that the economy needed to be stimulated, to create jobs, and keep money circulating, and in that respect did ok. SDL performed poorly in terms of expenditure management and allowed bad practices to simmer without vigourously addressing the bad habits, and invariably cost over-runs cancelled efforts on the revenue front.
    Chaudry has embarked on a vindictive campaign against tourism, manufacturing, now water, and transport, including air pacific. Further the sugar industry had it’s worst year in terms of performance, and returns in 2007. 2008 appears to be heading south of 2007 too.
    He believes in getting businesses and citizens to carry the can for government – SP Fertilizers – subsidising fertilzers to the tune of $8m, funded by borrowings from the canegrowers council, making FEA subsidise power generation which will cause it to borrow more, etc. Sooner rather thn later the piper will come calling.
    Chodo slashed costs by 10% or so he claims, and found that his policies caused the economy to shrink quickly to the point where his real revenue collections fell more thn 10%. He continues to harp about record collections – which doesn’t seem to be reflected in performance. Further, if fuel prices had not risen dramatically, the increased excise and duties on it would have savaged the government incomes even more dramatically.
    The govt is running out of funds – evidenced by hospitals running short of drugs, maternity patients having to fund their own consumables, PWD unable to keep up road maintenance. Visit most govt offices, and you find there are not enough safe seats to sit on for meetings. A govt dept delayed issuing approvals requested because the funding for that month had run out, and their was no ink cartridge and paper to print the apporval out. Stories of workers havng to bring their own toilet paper to work is another example.
    Economic management is not solely about cutting costs – it is about growing capacity, growing employment, and growing the tax base. Shutting down bottling plants, changing terms for the new operator etc reflect the infantile mindset this boci posseses.
    Some business owners I know won’t accept LPO’s – they feared not getting paid later. The list goes on and on.
    There are indicators that govt want to slash civil service numbers.
    It is absolutely clear that Chodo is not only out of his depth – he is totally in outer space. Inspite of funds running out, the IG insists on wasting the remaining meagre tax payers funds on the Charter Farter, pay top overseas rates for what appears to be a grossly mis-qualified candidate for the Supervisor of Elections role, etc,etc.
    All of this with the blissful unaware Eveli’s, Vore, sleepy Leweinski, sona levu Nawaolowalo, the sonombulant President, and cheered on the the worlds best legal clowns Aiyaz, shaista, and Gates.
    the IG is running out of excuses, now runnng out of money, and yes out of time.
    The question is how do they choose to exit – jail or six feet under.
    Time is running ooout!!!!! and We’ll be waiting.

  2. Ispy Says:

    Collectively, these water-bottling companies stand to lose millions of dollars per month in sales.

    Perhaps this will motivate one of these companies to pay Blackwater to surgically remove this cancerous administration from our midst.

    you only need 5 well placed bullets…

    …to change the course of Fijian history – for the better!

  3. tim Says:

    @Ispy – well there’s an option I never thought of – who better to get rid of a bunch of C**** than another bunch of C****. Perhaps Frank should’ve been smarter and cycled a bit more dumb military fodder through Iraq for a little experience in how to preserve his miniscule crown jewels. Actually if Queen Liz slapped him with her handbag he’d probably buckle

  4. lauan boy Says:

    while the mess is escalating…the arsehole soldiers that created this mess want to hide their faces….dou vei cai na sotia…..kua na dro….oti qo keda na qai vei rai tiko…..dou mai taqomaka tiko na boci qori o lewwni, bainimaga, ului, driti, chodo, leka-ram…..dou caita nodra mua muri.

    this is your clean-up magaitinamudou.

    dou na mate …. u r cursed to death u bloody arseholes.

  5. natewaprince Says:

    If the snake is still there 5 years from now,he’d still blame LQ and the SDL.But that’s ”IF”.

  6. Mark Manning Says:

    Bring back Peter Foster !

  7. Peace Pipe Says:

    This monster is the cause of Fiji’s doom yet he still wants to stick around even though he was rejected twice at the polls. Now he’s re-entered the corridors of power albeit illegally and criminally through the barrel of the gun he is doing his level best to ruin the economy.The snake comes out as some kind of mystery novel where we are not sure how to analyse him because at one time he seem bent on ruining the economy with deliberate intent. Other times he seems well out of his depth without a clue on how to manage a country’s economy. Whenever he implements draconian regulations on the business sector he always says he is doing it for the poor. Little does he realise that he is hurting the poor more in doing so. When the big comapnies are hit with crippling regulations they start cost cutting which inevitably includes the reduction of workers. Just cant wait to see the end of this trouble making snake.

  8. Koya na Man Says:

    I reckon that the 20cents Tax on every bottle bound for overseas market is too harsh a penalty for the Aqua industry.Most people reckon that the Tax was imposed on a mere rush probably on the boundary of lack of research and consultation to foresee the backlash it will bring to the economy.

    Probably it was one way of giving it back to the business community as they were suspected of funding the 2000 coup,but the ripple effects of such actions are devastating to the ecoomy and individuals whose livelyhoods depends on this industry.

    It comes as no suprise that our economy is dwindling as the current regime seems to be quite provocative towards the business sector.It’s always been proven that once the Govt.. of the day lean towards a group it obviously spells disaster,it should remin neutral taking care of both the enterpreneurs & the working class.

    Bad blood should be moderated to bring about harmony because it deems unnecessary to cut a chook which lays golden eggs.

  9. Kaiviti Says:

    Unfolding Financial Meltdown on Wall Street

    What’s The Difference Between Lehman Brothers & Bear Stearns?

    Lehman’s CEO Sits On the Board Of The NY Fed

    by Dr. Ellen Brown

    Global Research, June 15, 2008
    webofdebt.com

    An earlier article by this author (“The Secret Bailout of JP Morgan”) summarized evidence presented by John Olagues, an expert in options trading, suggesting that JPMorgan, far from “rescuing” Bear Stearns, was actually its nemesis.1 The faltering investment bank was brought down, not by “rumors,” but by insider trading based on a plan drawn up much earlier. The deal was a lucrative one for JPM, handing the Wall Street megabank $55 billion in loans from the Federal Reserve (meaning ultimately the U.S. taxpayer). So how did JPM get away with it? Olagues notes the highly suspicious fact that JPM’s CEO James Dimon sits on the Board of the New York Federal Reserve.

    In his latest post, Olagues discusses the fate of Lehman Brothers, the nation’s fourth-largest investment bank and the next faltering bank expected to fail.2 Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, “The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table.” Whether Lehman can come up with the “liquidity” to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two “bailouts” is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve.

    A conflict of interest? It certainly looks like it. Indeed, Olagues points to a statute defining this sort of self-dealing as a criminal offense. 18 U.S.C. Chapter 11, Section 208, makes it a felony punishable by up to 5 five years in prison for members of the Board of Directors of a Federal Reserve Bank to make decisions that benefit their own financial interests. That would undoubtedly apply here:

    “Fuld, at last count, owns 1.9 million shares of Lehman, 600,000 restricted stock units and 900,000 executive stock options . . . . Although Mr. Fuld sold over $320,000,000 worth of stock at near all time highs in 2006 and 2007, received through the premature exercise of his stock options, he still has value in his present holdings of approximately $100,000,000.”

    Likewise, says Olagues, “James Dimon holds almost 3 million shares of J.P. Morgan stock worth over $120 million with taxes already paid and executive stock options equal in my estimate of another $70 million. His dispositions of stock equaled $140 million over the past few years.” Olagues adds:

    “Fuld, like Jamie Dimon, was at the luncheon on March 11, 2008 with Bernanke, Rubin, CEO of Citigroup, Geithner, President of the New York FED, Thain of Merrill Lynch, and Schwarzman. Some claim that the meeting was about Bear Stearns and how to handle the situation.”

    Needless to say, Bear CEO Schwartz was not invited to the luncheon. “Lehman Bros. is one of the original stock holders of the New York Federal Reserve Bank,” Olagues observes. “Bear Stears does not now have any ownership in the FED banks.”

    The luncheon was held two days before the April 14 collapse of Bear Stearns stock that led to the bank’s demise. If the luncheon attendees were indeed discussing the Bear problem on April 11, testimony before the Senate Banking Committee in which the principals said they first heard of the problem on the evening of the thirteenth, says Olagues, was “less than truthful.”

    The evidence at least warrants an investigation, but who is going to hold these self-dealing Federal Reserve Board members to account? In a March 27 radio broadcast noted in The New York Post of the same day, Senator Christopher Dodd pointed out the conflict of interest and said it needed to be examined; but no mention was made of it at the April 4 Senate hearings. Why not? Olagues suggests he had gotten his marching orders by then from a major campaign contributor. New York Governor Eliot Spitzer, the former thorn in the side of the Wall Street bankers, has been summarily disposed of; and under the latest proposal of U.S. Treasury Secretary Hank Paulson, the Federal Reserve itself will soon become the chief overseer and regulator of the banks. The Federal Reserve will regulate the Federal Reserve Boards with their litany of private bank CEOs, a clear case of the fox guarding the henhouse.

    So who is left to bring the banks to task? That question will be addressed in my next article. Stay tuned . . . .

    Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves and how we the people can get it back. Her eleven books include Forbidden Medicine and Nature’s Pharmacy (co-authored with Dr. Lynne Walker and selling 285,000 copies). See http://www.ellenbrown.com and http://www.webofdebt.com.

    Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown
    http://globalresearch.ca/index.php?context=va&aid=9343

  10. tosotiko Says:

    Groggymaster, Well Said!

  11. FijiGirl Says:

    You can bet the the $6m from Air Pac has already been spent, or ‘allocated’ to fill the black hole Chodo is stuffing into our economy.

    Why doesn’t Chodo tax alcohol instead of water? Because the Catholic church is heavily involved in Carlton Brewery Fiji Ltd through high placed employees.

    Years ago, FWRM published findings proving that the annual cost to the economy of domestic violence was nearly hundreds of millons, and the bulk of these situations were alcholol-fuelled.

    A tax on alcohol will do more to help Chodo’s failing economy than crippling our water industry, but he dare not rock Vore’s rapildly overcrowding boat – perhaps he’s not the complete snake we believe him to be … or perhaps he’s just waiting for the right moment.

    Chodo has proven he can’t care a less about our environment or ecosystems, as I have pointed out elsewhere.

    Bring the regime down! Tabu soro!
    God bless Fiji

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