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Fate of Fiji Economy in military's hands

Fate of Fiji Economy in military's hands

Wed, 7 Feb 2001 08:55:19 +1200


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Fate of the economy depends on the military - Investment Co.

Fiji lost hundreds of million of dollars of investment which that was poised to revitalise the Fiji economy just as the failed May 2000 coup struck, states the Kontiki Fund Ltd's last quarter report of 2000.

The report states that the key determinant to investment and growth in Fiji is political stability. It reads: "the stock market and the economy can only make real progress if political stability and legitimacy are restored. On this issue the stakes rose sharply over the quarter just finished - and will escalate further in the year ahead. The key event determining sentiment and long term prospects over the next few months will be the outcome of an appeal by the Interim Government (IG) against a High Court ruling in mid November that the May coup failed and that as a consequence the IG should stand down, and parliament be recalled."

The report further states that although "the ruling is being appealed by the interim government, the military has consistently indicated that it will support the final outcome of the court process and press for formation of a government of national unity within the constitutional framework."

It says that if this "proves correct, it will be highly bullish for the economy and the market, especially as foreign governments are likely to move swiftly to reward a return to democratic government with aid and trade deals."

"Australia in particular is already highlighting the possible gains on the table with highly conditional proposals to underpin Fiji's fast growing garment trade with its big neighbour. If the Australian conditions are met, the garment trade will grow rapidly. If not, it will dwindle."

The report holds that failure "to abide by the court's ruling will constitute a crisis in the rule of law throughout the nation". But, it continues, "acceptance of such a ruling may still expose the country to a backlash from some of the same elements thought to be responsible for orchestrating the rampage through Suva on May 19th."

"Choices made by Fiji's political class at that point will in large part determine the prospects of a generation. Opportunism or lack of leadership may condemn the country to poverty and a worsening brain-drain, and fatally stem any recovery in investment and even tourism. Respect for the law and decisive leadership could offer Fiji an unrepeatable chance to regain international respect and the soul of its own increasingly disaffected middle class of all races."

It states that while the interim regime contains many good people who are participating out of a sense of public duty and seeking to push through worthwhile economic reforms, the "inclusion of candidates rejected in previous democratic elections seems to have undermined the semblance of legitimacy the IG appeared to attract initially. One danger is that contentious elements in the IG may use their tenuous grip on power to try to pressure an outcome in their favour, including agreeing to hold new elections under the 1997 constitution, but imposing unacceptable delays on actually holding polls."

The report argues that the "fate of the nation may lie in the hands of a determined and fair-minded military leadership which had no involvement in the initial coup and which actually wants to stay out of politics".

It states that a positive outcome of the Appeals court decision outcome "should give a major boost to all stocks" as well as "set the scene for resumption of some of the hundreds of millions of dollars of investment that was poised to revitalise the Fiji economy just as the failed May 2000 coup struck."


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