which would go towards road maintenance 

 

 

Members of the Pacific Islands Forum’sworking group on Fiji that include representatives of the Australian and New Zealand governments have agreed to consider possible changes to the group’s terms of reference.

The request came from Fiji’s military-led regime, conveyed to members of the working group by its new foreign affairs permanent secretary, Ratu Isoa Gavidi.

“The working group discussed possible revision of its terms of reference, and agreed on a proposed revised text which would be referred to capitals for consideration in advance of the working group’s next meeting,” said a statement released by the Pacific Islands Forum Secretariat.

Exactly what Fiji wanted changed in the group’s terms of reference, no one is saying.

But this magazine has been told that Commodore Frank Bainimarama’s administration is seeking two amendments—that no reference should be made to holding free and fair elections in Fiji by March 2009; and secondly, that the working group’s mandate should reflect Fiji’s high court ruling that the Bainimarama regime is a lawfully enacted government.

Islands Business was told that in agreeing to consider a change in its terms of reference, members of the working group—comprising high commissioners and ambassadors of Forum member countries who are based in Suva—were not necessarily endorsing Fiji’s proposition.

That, they argued would have to be a political decision which would have to be made by their respective governments.

It was for this reason that this proposed amendment would be sent back to their respective capitals.

The response of several Forum countries is expected to remain unchanged, particularly Australia's and New Zealand, in spite of the new government taking office in Wellington.

At least a representative said one of Fiji’s requests is redundant in itself in the sense that the working group’s terms of reference has never mentioned an election date in the first place.

“All it was asked to do was to assist Fiji in holding elections and there was no date mentioned at all,” this representative told us.

Suva is hoping an agreement could be reached on the matter before the Forum’s ministerial contact group visit in December.

The six-member group comprises foreign ministers of Australia, New Zealand, Papua New Guinea, Samoa, Tonga and Tuvalu.

Their visit will pave the way for a special meeting of Forum leaders in Papua New Guinea in January 2009, in which leaders will take a decision on whether or not to suspend Fiji from the Forum.

Leaders had wanted Bainimarama to stay true to his promise of holding free and fair elections by March next year which he gave at the 2007 Forum leaders summit in Tonga.

December will also see the convening by the Fiji regime of a meeting of the country’s traditional leaders at its military headquarters.

The meeting is being held amidst a big offensive by Bainimarama to win support for his proposed people’s charter.

Promoted as the document that will break Fiji’s coup culture, his promotion of the charter was hindered somewhat when a high court judge ruled last November that all  promotional work of the charter must ceased.

But the ink on Judge Filimoni Jitoko’s order had hardly dried when the interim attorney-general sought and obtained an ex-parte stay order hours later from another high court judge who was sitting as a one-person Court of Appeal jurist.

November also saw the delivery of Bainimarama’s first national budget since he became finance minister following the resignation last September of veteran politician and Fiji Labour Party leader, Mahendra Chaudhry.

The F$1.66 billion budget contains some bold and real attempt to jump-start what has been otherwise a sluggish growing economy.

An analysis by accountancy firm Ernst & Young shows that while Chaudhry’s 2008 budget had projected a 2.2% growth this year, this projection has been amended to show a possible growth rate of only 1.2%.

2008 budget inflation projection of 2.5% is also way off the mark with newer figures now putting 2008 inflation at around 7.5%. High fuel and food prices no doubt were the main contributors.

Chaudhry himself was concerned with measures Bainimarama had adopted to bolster economic growth.

The Labour leader should naturally be disturbed as the coup leader—whether deliberate or not— had basically reversed many decisions that were the hallmark of Chaudhry’s 18-month term as finance minister.

Bainimarama, for instance, re-introduced tax concessions including tax free regions and tax holidays in key sectors like tourism, agriculture, fisheries, forestry and ICT.

Almost half of Fiji’s ocean is a now tax free region under Bainimarama’s 2009 budget including the second main island of Vanua Levu, the Polynesian island of Rotuma and the maritime provinces of Kadavu, Lau and Lomaiviti.

A tax holiday can be attractive but in regions where power, water, communication and transport are not available 24/7, such a declaration might looked good on paper only.

Chaudhry is a believer in protecting the integrity of the country’s tax system, adopting a World Bank review team recommendation that tax concessions including tax holidays were a drain on public revenue.

The tax free status of imported LPG vehicles he had removed in 2008 was restored by Bainimarama, as well as allowing overseas yachts to stay in Fiji for as long as 18 months.

The military commander also extended to eight years the life of second-hand vehicles that could be imported.                                                                                                                             

 

 

Concessions specifically aimed at indigenous Fijians were also big in Fiji’s 2009 Budget, although Bainimarama never once mentioned the ‘dirty word,’ affirmative action.

He said the state would surrender ownership of thousands of hectares of matured mahogany forest to indigenous landowners.

Tax holidays are also being offered to investors who partner with indigenous Fijians in tourism, agriculture, forestry and fisheries.

There will also be a concerted push for infrastructure development and upgrade with a yet to be identified “foreign donor” and using the much-touted public private sectors partnership approach.

A new road tax will be levied, all of which would go towards road maintenance, said Bainimarama.                                                                                                                                                                                                         Frank Bainimarama..new measures 

 

Sceptics did wonder how the regime would fund all these concessions.

Even the head of Fiji’s Inland Revenue authority Jitoko Tikolevu reportedly told the local media following Bainimarama’s budget delivery that they yet to calculate the total tax lost through such concessions. 

Chaudhry’s concerns that Bainimarama’s list of goodies would only deepen state debt were vindicated by figures released by Ernst & Young.

While net deficit for this year is projected at 1.5% of GDP, for 2009, this is projected to double to 3%. Net government debt will be at 48% of GDP, the same as 2005.

For Bainimarama, however, implementation would be the key.

That is why he wanted all senior civil servants between now and the end of December to undergo training on capital project implementation.

In addition, the man has also set implementation deadlines with most of the new initiatives like a government policy on super-yachts to be ready by January 1, 2009.