Voters and the 2022 polls
1 October, 2022, 4:38 pm
Fiji soon goes to the polls for the 2022 General Election.
There are two major candidates vying for prime ministership, both former coup leaders – Sitiveni Rabuka (The Peoples’ Alliance) staged the country’s first 1987 coup and Voreqe Bainimarama (FijiFirst) who led the 2006 coup.
Both PA and its partner, the National Federation Party (NFP) led by former USP academic, Prof Biman Prasad, had been doing extremely well in opinion polls (before they ceased being published) and have been drawing big crowds to their campaign gatherings.
However, it has been extremely worrying that the Bainimarama Government has brought in all sorts of electoral regulations and rules which severely restrict the Opposition parties and candidates.
One strange law requires the Opposition parties to show exactly how their manifestoes would be funded, with the Supervisor of Elections apparently ready to initiate charges over any deficiencies.
Prosecutions over financial claims of housing allowances have led to convictions of some opposition MPs, making them ineligible to stand in the elections.
And a prominent lawyer is currently in court over a Facebook post five months previously that allegedly has brought disrepute to the judiciary.
The local issues
Of course, voters can be notoriously fickle and bought by freebies strewn around just prior to the election.
In Fiji, cash grants have been coming thick and fast, with grants to tertiary students, families with children under 18 (and a combined income under $50,000) and others.
But ultimately, the voters will probably be deciding who they give their votes to on the basis of employment and incomes (minimum wages) and poverty.
Unfortunately, the Fiji Bureau of Statistics has not published current statistics on incomes and employment for quite a while.
Indirect estimates from household surveys suggest that real wages have been declining for a decade, while formal sector employment has not grown much.
Ultimately however, employment and incomes won’t depart too far from the real growth rates of the economy.
The graph, using Reserve Bank of Fiji/Bureau of Statistics figures, shows clearly how the Bainimarama Government’s economic performance has been the worst since the days of Ratu Mara, which had an average growth rate of 4.2 per cent over 16 years.
After Mr Rabuka’s 1987 coup, there was an average growth rate of 2.8 per cent to 1998.
Then Mr Qarase’s Government had an average of 2.4 per cent.
The lowest growth rate has been that of the Bainimarama Government of a mere 1.2 per cent between 2007 and 2022, assuming that the current optimistic growth estimates for 2022 are achieved.
Even if one excludes the high negative growth Covid years of 2020 and 2021, the average for Bainimarama is still less than that of Qarase and Rabuka (2.2 per cent).
But this low average is still associated with a massive increase of public debt which clearly did not translate into economic growth.
Government, under the influence of employers, failed to continue with wages councils which could have raised wages differentiated by industry.
Feeble attempts to increase minimum wages have also been delayed by employers, who have exercised enormous influence with the Government.
After COVID, the Minister for Economy reduced employer contributions to employees’ superannuation funds (FNPF), effectively transferring more than $F300 million from the workers’ FNPF balances to employers.
For the first time in 2021, FNPF had a net deficit in contributions, with more money being withdrawn than deposited.
Voters will also be extremely worried about the massive public debt that has been racked up by the FijiFirst party from about 37 per cent of Gross Domestic Product in the last year of the Qarase Government (black columns) to
54 per cent in 2019 (before COVID) and 82 per cent currently (red columns in the graph).
During the Rabuka years, the Debt to GDP ratio was less than 29 per cent (blue columns).
These ratios understate the real financial mess that the Fiji Government is in because contingent liabilities of government are not included in public debt.
But State enterprises like Fiji Sugar Corporation have been essentially insolvent for more than five years, and Government has guaranteed more than $100 million of its loans, which are keeping this vital industry afloat,
especially given the hundreds of thousands of rural families who derive their livelihoods from this failing industry.
The Government has also guaranteed huge amounts of loans to Fiji Airways to keep it afloat during COVID.
It is also pertinent that FNPF has substantial investments in the tourism industry, which suffered during COVID, with virtually no support for the thousands laid off during tourism’s recent collapse.
The living standards of the people of Fiji have only been saved by foreign remittances which have grown from about $322 million ($US142 million) after the 2007 coup, to approximately $922 million ($US406 million) for 2022.
These are earnings are sent back by workers, carers, nurses, soldiers etc. from Australia, NZ, Canada and the US.
To put these sums in context, the gross earnings from the sugar industry are only about $150 million, while even the retained earnings from the tourism industry may be only around $500 million.
For both of these earnings, massive amounts have been spent by taxpayers, while remittances have cost them nothing.
It is crucial therefore that Fiji does nothing to jeopardise these remittances.
Fostering better relations with Australia and NZ may indeed be key to keeping these flows going, as employment
opportunities are opening up there as a result of direct Australian and NZ Government policies.
Regional and international issues
Even since the signing of the China-Solomon Islands treaty, geostrategic issues have become paramount in the relations between all Pacifi c Island nations and Australia and New Zealand, with Fiji occupying a pivotal role.
Relations between Fiji and Australia soured after 2006 because of Australian disapproval of the military coup by Voreqe Bainimarama.
Fiji had then really upset the apple-cart by developing strong relations with China, which stepped into the political void with aid and infrastructure spending.
At one stage there were worries that China might be allowed to develop a naval base in Fiji, although that did not go ahead.
In the last few years, Australia has repaired the bilateral damage and Fiji has gradually re-established close ties, with Australia being chosen over China to develop a military training centre in western Fiji.
Nevertheless, these cordial relations cannot be taken for granted.
It may be pertinent that the China-based Asian Infrastructure Investment Bank (AIIB) Board of Directors has just approved a $112 million ($US50 million) loan to Fiji.
The AAIB said that it was for “systematically mainstreaming resilience into [Fiji’s] budgeting and decision-making processes”.
The Fijian Government said that the money would be used to restore fiscal sustainability and promote inclusive climate-resilient economic growth amid the ongoing spread and impact of COVID-19” (FT 19 Sep. 2022).
Both nebulous explanations are probably less important than the timing of this loan just prior to the elections, especially when Fiji is already facing a massive public debt.
The long-term lessons for good governance
The Fiji 2022 elections are also important regionally for good governance issues.
Without doubt, Australia and NZ were terribly worried by the 2006 military coup with Mr Bainimarama removing
the democratically elected government of the late Mr Qarase.
They were worried at the fundamental erosion of the judiciary and institutions of state such as the police, prosecutions, and by media restrictions.
This was not a model of development they wanted to see replicated around the Pacific.
There was much talk by Australian and NZ commentators of the “failed states” in the Pacific and the “arc of instability” affecting the Melanesian countries of Fiji, the Solomon Islands and Papua New Guinea.
That worry has not gone away, especially with recent constitutional challenges in the Solomon Islands and Vanuatu, and Kiribati’s suspension of all the judges of the Court of Appeal.
That worry may be lessened if the 2022 election result in Rabuka’s PA forming Government with the NFP.
Both parties are known to be sympathetic to Australia and New Zealand.
Worry about China’s continuing influence may persist if Mr Bainimarama wins the election again, suggesting to other PICs that lack of constitutionality does not matter, as long there is a powerful donor like China to resort to,
uncritical of western standards of democracy and rule of law.
Either way, this will be a crucial election not just for Fiji’s voters, but for regional and international observers to keep tabs on.
- Prof WADAN NARSEY is an Adjunct Professor at James Cook University and a former Professor of Economics at the University of the South Pacific where he worked for more than 40 years. This article first appeared
in Islands Business magazine. The views expressed are the author’s and not necessarily of this newspaper.