Fiji troubles could hurt region, says Lowy Institute for International Policy report

By Sandra O’Malley, | April 16, 2009
Article from: Australian Associated Press

ONCE the jewel of the South Pacific, political and economic trouble in Fiji could mean bad news for the whole region, a new report says.

The Federal Government has been warning that the political turmoil in Fiji is taking its toll on the economy and, as a result, hurting ordinary Fijians.

But in a policy brief for the Lowy Institute for International Policy, released today, Susan Hayward-Jones says the implications of Fiji’s economic decline could be much more widespread.

“Fiji’s political crisis is indeed grave, but the economic crisis already hurting Fiji citizens also has serious implications for the Pacific Islands region and therefore Australia,” the policy brief says.

“The full effects of the global financial crisis on the region are yet to be realised and the ripple effect of the deterioration of the Fiji economy on the wider region is difficult to predict with accuracy.
“However, Fiji’s importance as a regional economic hub means what happens in Fiji matters to the region.”

Fiji has been widely condemned after the military leadership of Commodore Frank Bainimarama was given greater powers just days after the Court of Appeal ruled his government was illegal.

In the wash-up from the court ruling, President Josefa Iloilo scrapped the constitution, sacked the judiciary and reappointed Cmdre Bainimarama until 2014.

Observers have warned the situation could mean tourism, one of Fiji’s biggest income earners, will plummet and the European Union is already hedging on a deal that could have saved the island’s important sugar industry.

In order to stave off further economic deterioration, Ms Hayward-Jones recommends Australia, which is holding the Pacific Islands Forum leaders’ summit in Cairns in August, work on ways to deliver finance to Fiji despite the political upheaval.

Failure to act on the political problems may also mean it becomes necessary for Australia to take a more interventionist approach in the future, says Ms Hayward-Jones, citing the situation in the Solomon Islands.

Since 2003, Australia has led the international Regional Assistance Mission to Solomon Islands (RAMSI) aimed at maintaining peace and stability in the island nation.

In her policy brief, Ms Hayward-Jones notes that earlier intervention by Australia in the Solomons may have made such a major response unnecessary.

“The delay in developing an appropriate response while the situation deteriorated and law and order broke down completely meant the policy response required and eventual implemented became much more complex and expensive, costing the government over $1 billion in expenditure on RAMSI,” the brief says.

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