Amongst the specific economic reforms proposed were: (i) fast tracking of divestment from state-owned enterprises (SOEs) including the closure of non-performing SOEs; (ii) the amalgamation of different government departments and entities; (iii) outsourcing of service provision to the private sector; and, (iv) rehabilitation and rejuvenation of the deteriorating road-infrastructure. Pro-growth and pro-poor reforms also got a mention. The prescriptions for the economy are consistent with that from the manual of any international financial institution.
The PM is learning economics fast. The heat is on him given the rapidly deteriorating economic conditions and his role, amongst many others, as the Minister for Finance and National Planning. Foreign reserves at FJD660 million as of June have recovered, by FJD132 million at current value of the FJD, since the devaluation of 20 percent last April. This improvement, however, is due to a larger fall in imports compared to exports since the devaluation. The former was expected, but the latter is a disappointment.
While the proposed reforms are praiseworthy, a lot more may have to be done if an economic crisis is to be averted. Furthermore, considerable donor support would be required to bring any of the reforms to fruition. Most important, a revival of the economy requires a return to the rule of law at a minimum and to democracy preferably.
The Commodore has called for the building of bridges, appealing to the international community to lend a hand in him realising his vision. He has urged the private sector and the wider community to work together in exploiting the investment opportunities on offer. Private investments remain lethargic. It is here that the difficulties begin to emerge.
Many long standing reforms remain unattended. Land reform heads this list. Some 90 percent of Fiji’s land mass is under customary (group) title. Much of this land is under-utilised. Realising the potential of the nation means drawing this idle resource into production. Given the political sensitivities of land reform, the PM has been cautious, announcing that the current system of land-ownership will be retained whilst tenure secured and provided long term to entice private enterprise. This could be a hard high wire balancing act for the PM; get it wrong and the fall could be fatal. Law and order remains a perennial challenge.
Other than reiterating his determination to rid the nation of ethnically polarised politics through the introduction of a ‘true democracy’ by September 2014, the address was light on exactly how this would be achieved. All we know is that work on a new constitution will begin in 2012. Why so late?
Pronouncements of future socio-economic bounties, and before transfer to democratic rule, are meaningless unless realised. Bringing reforms to fruition requires widespread community engagement and support.
The difficulty for Commodore Bainimarama, as that for any dictator, is to prove his benevolence. Absent that, his plans will not stick; not to the domestic constituency, and nor to the international community.