What are Fiji’s options
Dealing with the second wave
FIJI has been warned of a severe second wave of COVID-19 that could hit the country hard if the rate of infection is not controlled. The global experience suggests a complete shutdown and more stringent mobility restrictions. The warning is that many more people would get infected in coming days and weeks and possibly many lives would be lost.
The rate of infections could escalate due to community infections causing hundreds of deaths. As per the estimates, the death rate could reach as high as 10 per day in the next three months if the daily infections were to grow as a result of community infections.
At the current growth rate of daily infections, Fiji’s total COVID-19 cases would reach 90,000 in the next 100 days. Of course we are not there yet, but if the current community spread continues we would definitely reach there.
The graph below shows how the total deaths and daily new cases would rise in the next 100 days if the infection rate continues to rise at 2 per cent. The scenario could be even worse if the infection rate escalates, as is the case for Delta and Delta+ variants. If the daily cases constantly increases at 2 per cent for the next 100 days, the total deaths could reach 800. By then, the total COVID-19 cases in Fiji would have reached 90,000.
This is a staggering figure which could push the daily deaths to about 1800.
Fiji’s infection rate
Fiji is currently leading the world infection figures on a per capita basis. The daily rates for Fiji have exceeded 260 now, which is equivalent to India’s daily infections of 380,000 per day on a population basis. This is higher than what India recorded before reaching the peak.
At India’s second wave peak, approximately 500,000 daily infections were reported. If people start dying at the same rate as at India’s peak, it will be a catastrophe for Fiji. It could mean about four people dying daily from COVID-19 complications.
Fiji has a much higher proportion of NCDs-afflicted people (413 for Fiji against 280 per 100,000 for India as per a published data on a global website). This means the death rate could reach even higher if daily infections are allowed to increase by 2 per cent on daily basis (see the chart).
We need to learn from the recent global experiences of other countries. It is abundantly clear that the second wave has hit hard – in the US and Europe in late 2020 and more recently India with more than 400,000 people in a matter of weeks. Fiji is going down this path rapidly.
While deaths in Fiji remain low at the moment, our healthcare facilities are grossly inadequate. We may have better health facilities than India on a per capita basis, but we do not have specialist facilities that are needed to save peoples’ lives in severe cases.
Our healthcare facilities are already overwhelmed. CWM Hospital is virtually under siege. Health centres around the country are now mostly closed.
Some people are even dying without treatment as a result. Sadly, such cases are not expressly reported by the media. Only implicit references are being made by the health authorities.
Government’s choices
The Fijian Government needs to wake up from its slumber now and take action before it’s too late. Here we must draw lessons from India’s experience where thousands of people died on the streets, with hospitals and crematoriums jammed for more than a month. Those were gruesome scenes of death and misery. Therefore, to avoid that experience, the Government must act now.
The Government needs to show leadership and shut down completely for about four weeks. There is nothing in between. Many political leaders have also said the same.
But it is obvious that the Government is avoiding expenditure by not locking down. A lockdown will be costly for the government to manage when its revenues are scarce.
Food and other costs
A lockdown would render people immobile. People would require food and basic needs such as toiletries, power and water. But Fiji is not alone in this.
Fortunately, Fiji’s two richer neighbours and friends, Australia and New Zealand, are willing to provide support. It is also possible, the rest of the richer world, particularly, the US and EU would provide support to Fiji during these dark times.
The Government also needs to calculate the costs. A good estimate of the total number of people in dire circumstances needs to be calculated - people who have lost their jobs and livelihoods need the first attention.
But the Government may need to take a two-tier approach in this calculation. First, start with the total number of people who have lost their jobs, and then work on the basic needs calculations for the households.
According to the Fiji Islands Bureau of Statistics (June 2021, Database) using sectoral estimates, a total of about 80,000 workers are out of jobs as a result of the restrictions and shutdown of the tourism sector.
This 80,000 is about 45 per cent of all formal sector workers in Fiji which represents about the same fraction of households that need direct assistance during the complete lockdown.
The National Poverty Data would help to calculate the total expenditure needed by the Government to support households during a full closure. This suggests an annual food requirement figure of $1132 for an adult in a median strata household.
Of course, food is not enough to sustain life. Non-food requirements for an adult equivalent are set in the median strata household at $1500 per annum. This means (adding food and non-food requirements) approximately $2600 per annum.
Now if we do simple math for each adult equivalent, an expenditure of $217 is needed for four weeks of complete lockdown. There are 200,000 households in Fiji, of which about 90,000 need direct support to survive during full lockdown.
So the math becomes simple if a few realistic assumptions are taken. Here, assuming that an average household has on average 4.5 adult equivalents, 90,000 households would have about 405,000 equivalent adults.
This gives a total sum of about $90 million for a 30 day complete lockdown.
Here we assume that all other households would survive on their own and the civil servants and the skeleton workers everywhere remain employed as they are right now.
This assumption may not be entirely true. Therefore, some contingency resources may be required.
Further to this, we assume that the normal community and social support mechanisms remain functional and reasonable community redistribution may continue to help.
The Government may need to allocate additional funds for contingencies during the lockdown. It would also require additional funds to logistically support any such complete shutdown period. Security and health personnel will have to remain fully deployed during these times.
These may run in millions of additional funds.
For Fiji it is known that with the formal sector closures, a huge number of informal workers are also affected. These include micro and small enterprises.
Therefore, these businesses should be located and provided direct government support.
Measures should be designed to cater for the poor households that are in dire condition and in particular facing food poverty. Farmers of all shades (sugarcane, vegetable and livestock farmers), including small fishermen are expected to benefit from measures described here.
Long run adjustment
The economy needs to create new sectors that can generate income by utilising domestic resources. Therefore, while addressing the current crisis the Government also needs to take into consideration the new world order where internalisation of the economy is necessary.
Both Australia and New Zealand have taken strategic steps to do this. Long run growth strategies beyond three years and up to 10 years need to be in place right now.
The long-term economic growth strategies must go handin-hand with what we are doing to address the COVID-19 crisis and its aftermath.
The planning should put the future in perspective and place an action plan now to realise the necessary outcomes when a new world order emerges after COVID-19 (six months to two years from now).
Economic planners in New Zealand have put in place plans for immediate needs and the long-term to rebuild the economy. The total package for 2021 budget exceeds $60 billion (NZD) in additional expenditures.
Taking the cue from this, the Fijian Government needs to strategise development of new sectors that would minimise the economic pain from the losses the businesses and employees have suffered in the tourism sector.
Right now, the baseline approach of the Government should ensure support for businesses in the tourism sector to survive. Other related services in all parts of Fiji need to survive the current downturn.
The Government needs to implement policies to support the existing debt of these businesses in the next five-year period. A medium term refinancing support is needed for businesses.
This approach is very evident in the national budget policies of the New Zealand and the Australian governments. In Fiji’s case, intervention of the RBF with fiscal support for the policies will do the trick.
While some relief has been provided already, the RBF needs to put its policies clearly to restrain banks from behaving badly during these times.
The Government must understand that the banking sector has to be regulated according to the circumstances that prevail in the economy.
Banks need to be regulated with the clear objective of protecting depositors and also borrowers at the same time. The US Federal Reserve has provided some bold examples of this during the last financial crisis and also in the current crisis.