Cover Story
Long-Term Instability
Increasing Poverty and Ethnic Tensions Cloud Fiji's Future
A young professional Indo-Fijian should be buying her first house now, but it’s not on the agenda.
“Our family has decided not to invest any more in Fiji,” she says. “We know that even now a group of the local people could come and occupy our home, and what could we do?”
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A Fijian father says with pride his two boys are in the army—the British Army that is.
“There are no jobs here,” he says, “and it’s good for them.”
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It’s not so much race or greed or stupidity that is strangling Fiji’s future, it’s the grinding uncertainty of so much of the place and failure of the state to resolve the all-important land issue. Legal title—be it leasehold or freehold—means nothing in the face of an older traditional ownership system that cannot resolve its claims normally and so resorts to extra-legal action as authorities turn a blind eye. While Fiji is easily one of the richest states in the South Pacific, and could readily supply all its citizens with a much higher standard of living than it does now, it is trapped in its own history and tradition, and has become a country where 40 percent of the population wants to bail out.
The uncertainty creates an odd environment where real productive investment is limited, but the state’s powerful Fiji National Provident Fund is, in effect, awash with cash—around F$2.4 billion (US$1.2 billion) in assets with over 57 percent invested in government assets—but no real place to put it.
It ends up funding high-rise buildings in Suva; hardly of significant long-term interest to the nation as a whole.
Its chief investment officer, Neale Wright, told the Fiji Review their problem was assessing what was worth investing in.
“The economy is strong right now, we have a stable, pro-business government and our exports are in demand,” he says.
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The current cycle of Fiji’s political life goes back to the end of Prime Minister Sitiveni Rabuka’s government that followed his two military coups in 1987. In May 1999 veteran politician and old-school trade unionist Mahendra Chaudhry’s Fiji Labour Party won the general elections on an overwhelming landslide against Rabuka, aided by severe divisions in the indigenous population. Chaudhry’s program rested largely on poverty alleviation and not particularly on the racial politics that always dominate Fiji’s public life. But as in any election result, there were losers and in 1999, what a High Court prosecutor was to later call a “coalition of losers,” was out in the indigenous community planning a rebellion.
The old political truism about omelettes and broken eggs was certainly true of Chaudhry, and in politics the first year of a five-year term has always been one of spending goodwill capital. Chaudhry’s mistake was to underestimate his enemies, and he was not helped by his police chief, Isikia Savua, who kept telling him everything was under control. The coup of May 19, 2000 showed the deception inherent in that.
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Fiji quickly found there was no international sympathy or tolerance for what happened and in the three years since, the 2001 democratically elected government of Prime Minister Laisenia Qarase has struggled to establish its credibility. It has succeeded in almost overcoming the enormous stigma of being conceived in a coup, but its own long-term stability remains open to question. Its constitutional legality was due to be tested in the Supreme Court in June while the legal wash-up from the George Speight coup can still yet reach into the upper levels of the indigenous ruling class.
While a lot of complex sociology and anthropology is built around Fiji’s land issue—with overall more than 80 percent remaining in traditional title—the essence of the issue is simple. Indigenous Fijians do not want to give up land ownership, but when it comes to leasing it to others, law and tradition have imposed barriers to straightforward commercial deals. Few people pay a market driven rental for what they lease, thanks to the intermediaries, particularly the Native Lands Trust Board, and few owners ever get more than a portion of the rent paid.
Qarase says they are trying to resolve the land issue, but it is not easy.
“It is a political football,” the PM concludes. “Also it has, unfortunately, racial connotations, but these are facts of life in Fiji. As a government, we are trying our best to reach some agreement with our colleagues in the Fiji Labour Party and other parliamentarians, but I know it will not be easy. I hope that at the end of the day we will come to a solution that would ensure long-term stability in the land tenure system in our country. Because that is of vital importance because, basically, Fiji is an agricultural country and we need to produce and sell overseas and locally, and we will need to grow for the sake of our children.”
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In an atmosphere of considerable distrust replete with mythology about the bad intentions of each other’s opposing negotiator, little hope for resolution exists. Unfortunately, little escapes the land trap. Plantation mahogany is unlikely to deliver the rewards once hoped for. Fiji has one of the world’s largest mahogany stands, at 43,600 hectares (108,000 acres), developed over decades with US$70 million taxpayer’s money. Its current worth has been variously estimated at between $68 million and $217 million. Some believe Speight’s coup was about winning access to this potential wealth. But as milling has begun, arguments between landowners, NLTB and the government have grown.
While land tenure is the long-term issue that will define Fiji this century, sugar is a more immediate crisis that, while linked to land, would have hit anyway. Sugar was never really viable in Fiji; to make it work, cheap labor had to be imported from India and, after the initial neo-slavery plantation operation, it could only survive on cheap land with cheap family workers. A British imperial sugar preference kept it and its four monster crushing mills. The European Union maintained the sugar preference, paying over twice the world market price in Fiji and similar countries until 2008, but in the last year Australia and Brazil have launched World Trade Organisation action against it.
Fiji is in a crisis.
Qarase has launched a last-ditch F$125 million (US$57 million) restructure plan to save the sugar industry, but Chaudhry, who is also general secretary of the National Farmers Union representing hundreds of mainly Indian farmers who form the backbone of the sugar industry, believes the end is near.
Thousands of leases have just expired or are about to, and even the restructuring plan cannot deal with this.
“It’s better to realize and face that reality and find an alternative to secure your future and that of your family and future generations,” Chaudhry says.
Making matters very much worse for the industry is the way in which dozens of Indian farm tenants and their families have been assaulted or threatened with assaults, abuse and roadblocks which the hard-pressed police are virtually incapable of dealing with.
While the government might see this is as a purely local problem, they miss the point that the brutality over the land issue does not sit well with international investors who can readily conceive the day angry landowners might want to seize their assets.
Last September, Qarase said his five-year plan was make or break: “We are now against time and are already slipping behind schedule. I cannot promise that the reform will come without some pain, some problems and some difficulties.”
With sugar producing about a third of Fiji’s GDP, and providing a living for nearly 200,000 people, the stakes are extremely high; and if it falls apart it will be quick and, as Qarase clearly recognizes, catastrophic for the nation.
When Qarase was first installed in office by the military in 2000, and subsequently after winning democratic elections in 2001, he proclaimed a “blueprint” of affirmative action for indigenous Fijians. The policy has critics locally and internationally because of its implied racism
Qarase is unrepentant: “I want Fiji to develop into a country that all communities would support and love to live in. At the same time I want the rights of the indigenous people protected and their aspirations taken care of. One of the reasons is that the long-term stability of our country will to a large extent depend on how successful we can accommodate the aspirations and wishes of the Fijians.”
As affirmative action programs around the world show, it is difficult to translate good intentions into results and a Fiji NGO group, the Ecumenical Centre for Research, Education and Advocacy argued in a report in March that, “inequality has increased and the percentage of those in poverty has grown drastically.”
The Fiji Indigenous Business Council recently revealed less than 100 indigenous companies were operating out of a total of 5,000 in the country.
“This is 2 percent of the total national participation and translates into a lopsided distribution of wealth,” council President Ulai Taoi says.
