The year ahead
THE dawn of a new year is usually a time for an honest appraisal of what we have achieved and where we are headed. It is a time of renewed hopes and aspirations, and a fresh start.
For many of us in Fiji, however, year 2021 offers little in the way of comfort or prospects for improvement.
The year ended on a bleak note with super storm Severe Tropical Cyclone Yasa devastating vast areas of the North — Vanua Levu and the nearby islands — the southern parts of which have now been designated a red zone.
This calamity struck at a time when we were still battling with the impact of the coronavirus pandemic on our already fragile economy.
The global crisis shows little sign of abating. Our borders remain closed. Likewise, those of our next door neighbours – Australia and New Zealand. Tourism is at a standstill.
Prospects for the resumption of international flights in the near future, and along with it, the revival of our tourism industry, remain uncertain.
In a statement issued on December 22, the World Bank warned that “economic activity across the Pacific could remain depressed for another nine-18 months”.
Unfavourable forecasts
The impact of the pandemic on our economy has been crippling considering that we were already in the throes of a recession before the COVID virus struck.
The economy in 2020 is forecast to contract by 20-23 per cent by the Asian Development Bank and other international monitoring agencies.
Recovery is expected to be minimal at around 1 per cent in 2021.
This is almost one-fifth of our GDP. However, as I have said before, I have serious reservations about this.
I believe the economy will contract by as much 30-35 per cent in 2020 considering that tourism alone accounted for 40 per cent our (pre-COVID) GDP.
Government’s financial situation remains precarious with revenue expected to be 33.3 per cent lower in 2021, says the ADB.
It continues to borrow and approach donor nations to fund its operations.
Indeed, as the year ended, we witnessed Economy Minister Aiyaz Sayed-Khaiyum receiving $35m from Australia — $31m of which he says will be used to provide relief packages for the victims of STC Yasa and $4m to go towards budget support.
What this relief package is likely to be is anyone’s guess for the moment but let us hope that the Australian Government will require accountability and transparency in the disbursement of their donated funds.
It is extremely important for donor countries to ensure that their funds are properly utilised.
Focus on the North
I am concerned that two weeks since the cyclone struck, people battered by STC Yasa are still completely in the dark about what relief to expect from the government.
A lot of houses were damaged, some quite substantially.
A good number of families have had their household and personal belongings destroyed and need financial assistance to replace these items.
They want to get on with the repair work but need to be assisted to purchase building materials.
These families cannot be expected to live in the open in the harsh weather conditions prevailing at this time of the year.
They are anxiously awaiting government announcement of a relief package so they know where they stand.
It needs to be understood that most of those affected are from the rural community — farmers and villagers.
They are not members of the Fiji National Provident Fund so government cannot tell them to fend for themselves by withdrawing money from their retirement savings in the Fund.
Substantial loss to farmers
The people in the North are heavily dependent on agriculture for their livelihood — sugar cane, yaqona, taro and copra.
Villagers particularly in the outer islands, rely on subsistence farming, mainly root crops.
They are now extremely vulnerable as a result of the destruction of their crops by the cyclone.
All major crops have sustained heavy damage. Many cane farmers I visited, estimate having lost between 50-60 per cent of their entire crop.
Likewise, yaqona and taro farmers. The yaqona crop takes three-five years to mature.
Farmers say they are now forced to harvest their young, immature crop because of the damage sustained from the cyclone.
Root crops get water logged and perish.
These farmers are completely devastated. They face a bleak future.
Many of them are on ordinary incomes, mostly subsistence, with little savings.
They will need urgent assistance with cash and building materials to rebuild their homes and survive in the short term.
My worry is that with the recent setback they have suffered, many more families may now opt to move to Viti Levu in search of a more secure life, adding to more informal settlements here.
This must be prevented. The Government must pump more funds in the North to rebuild its economy as a demonstration of its commitment to the well-being of the people there.
Our thanks to the donor governments, the NGOs and the people who used their own money, time and resources to provide immediate relief to the victims of the cyclone.
Difficult year ahead
Let’s be realistic. It is going to be a difficult year for most of us.
People must brace themselves for even greater hardship.
Those who lost their jobs or were forced to work reduced hours or on reduced pays, will likely have diminished much of their savings with little likelihood of their jobs being restored any time soon.
Those reliant on withdrawals from the FNPF will also find their funds are being depleted and at risk, if they continue to borrow.
With a deeply contracted economy, it is unlikely that new investments will take place or new jobs created any time soon.
So we must prepare ourselves for a difficult 2021.
Spend wisely, plan carefully and work hard to make ends meet.
They say necessity is the mother of invention — we must look for ways in which to enhance our incomes to maintain a decent lifestyle.
Despite the constraints, I wish everyone all the best for the New Year.