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For richer and poorer: can indigenous Fijians accumulate? [The Fiji Times, 29 August 2002]

28/03/2012

Indigenous Fijians are poor.   Indo-Fijians (and Chinese and Europeans) are rich.  This has been a political complaint for decades.

But the Bureau of Statistics data show that the vast majority (90%) of the Indo-Fijians and Fijians are pretty much the same.  Except that there aren’t as many rich Fijians as Indo-Fijians.

Why not?

Why are there fewer rich Fijians?

The historical fact that rich Indo-Fijians have been in the business world for more than fifty years, is part of the answer.  But why have “well-off” Fijians not become as rich as similar Indo-Fijians?

Last week, Rev Koroi (ex-President of the Methodist Church), Mr Qereqeretabua (chief executive of the Fijian Hotel) pointed to other reasons.   They expressed concern that church fund-raising was putting unbearable financial pressure on ordinary Fijians.

And the Tui Nayau called on Fijians to pay greater attention to their own families.

Over the years, others have pointed out that indigenous Fijian traditional practices, at deaths and marriages, and the frequent soli, hold back the development of Fijian entrepreneurs and families.

Schools, children’s education, and family welfare (such as a family home) are neglected.  Businesses are forced into bankruptcy.

No doubt, religious leaders do have a point that the traditional obligations are socially and spiritually enriching.

But what is the effect of “richness in community spirit” on material wealth?  And what of differences in household size, diets, and other preferences, between Fijians and Indo-Fijians?

The Indo-Fijian and Fijian shop stereotypes

Look at two stereotypes-  Kaiviti Kabani  and Lal & Sons.

Both start with capital of ten thousand dollars in 1950.  Both are hard-working.  Both make a profit of 12 percent per year on their capital.

Where are they after fifty years?

 Lal & Sons

Lal will pray every morning and night to Goddess Laxmi, the Hindu godess of wealth (many Hindu shops and homes will have Laxmi’s statue in a corner).

But Lal does not allow family or community obligations to erode his profits, which he reinvests.

The $10,000 grows at a compound growth rate of 12% per year.    It becomes a massive $2,890,000 (almost three millions) after fifty years.

Many Fiji businesses (like Punjas, Motibhais, Lees) have made more than 12% profit per year, for several generations.

Get your children to calculate what happens to $10,000 after fifty years of compound growth at 18% per year (keep multiplying by 1.18).   Can you believe the answer?

And Viti Kabani?

  But Viti Kabani’s first year profit of $1,200 faces a lot of demands.

The talatala will remind of Jesus’ teaching- “it is more blessed to give than to receive”.

The mataqali will come for contributions to reguregu and remind of the vanua.

And there will be the  inevitable kerekere from relatives and friends.

Few Fijians dare to refuse, for fear of being labeled “mamagi like the kaidia”.

Demographic factors?

But other factors also increase Fijians’ household  expenditure and reduce savings and wealth.

For decades the Fijian fertility rate has been more than fifty percent higher than the Indian fertility rate- more children.  The average Fijian of working age (1996 Census), had 25% more dependents than Indians.

The 1996 Census data also shows that  a much larger proportion (27%) of Fijian children (compared to 16% for Indians) were not in the same households as their mothers (and  an astonishing 37% of Fijian thirteen and fourteen year olds).

Well-off Fijian families (especially in towns) are often asked to look after relatives’ children, usually to attend better schools.  They cannot refuse.

And dietary experts calculate that the cost per person of a basic nutritious Fijian meal (more meat and fish), is 20 percent higher than that for Indo-Fijians.

All implying that much higher household expenditure, less savings.

  Tastes and tradition?

A higher proportion of  Fijians (than Indo-Fijians) buy restaurant meals.  The Indo-Fijian takes to work his parcel of roti and curry costing 80 cents.

Fijians depend relatively more on hire purchase and end up paying interest rates of 30% or more.

At church conferences and soli events, households of senior Fijians will be filled with their village communities, needing food and kava.  Visitors bring contributions, but the host ends up spending money anyway (often by borrowing).

It is no surprise that for decades, senior Fijian civil servants could seldom afford house mortgages.  They kept paying rent (while minor Indian clerks under them, borrowed, built homes and saved their rent).

Profits of Viti Kabani?

Add up all the extra subtractions from the first year $1,200 profit of Viti Kabani.

Suppose (very optimistically) $300 is saved and re-invested- a quarter of the profit.   His capital grows by a compound growth rate of 3% per year.  Suppose this happens every year.

Fifty years later, the original $10,000 will have grown, but only to $43,840.

Nowhere near the three million dollars accumulated by Lal and Sons, running the same kind of business.

And if Viti Kabani had to compete with Lal & Sons, you know who could afford to cut the price, and who would go out of business.

Change the numbers here and there.  Compare the same salaries,  and eventual annual savings for fifty years.  Do fancy financial modeling.  But the end result is similar.

Well-off Fijians just cannot become as rich as the others, given their social conditions.

What of other forms of “wealth”: social wealth and poverty of spirit?

But how “poor” are Fijians?  And how “rich” are the wealthy Indo-Fijians in a holistic sense?

Fijian traditional obligations  may make well-off Fijians materially poor, as resources are redistributed from the well-off to the others.  There is a great leveling down.

But as church leaders point out, traditional obligations also create great social wealth.  They are occasions of  joy, socialising, and reinforcement of culture in music, meke, and song.

They give the average Fijian a sense of belonging, time, place and community (even if these ties are weakening).

Indo-Fijians are poor in communal spirit

Indo-Fijians also have a strong culture, but the use of resources is based on

individualism and the nuclear family.

Indo-Fijians do not see themselves as responsible for their extended families or community.

Unlike eighty years ago, Indo-Fijian fund-raising efforts today (for temples or schools) struggle to raise a few thousands  (while Fijians raise a million over a week-end).  The thousands of displaced canefarmers and destitutes are largely neglected by the Indo-Fijian wealthy (although government ministers will be generously funded).

Worsened by the 1987 and 2000 coups, Indo-Fijians have the global market economy attitude of “every man for himself”.

Indo-Fijians face social disintegration and alienation.  They have one of the highest suicide rates in the world.

There can be great “poverty of spirit” in the midst of wealth.  But they make their choices and live with it.

Indo-Fijians accept that if you don’t help yourself, no one else will.  They persevere and improve their families, not just in Fiji, but all over the world.   And some get rich.

  Somewhere between the stereotypes

Of course, there are indigenous Fijians and Indo-Fijians who do not fit the stereotypes, but they are few in number.   For both races, the challenge is to  move to the middle ground.  For Fijians it is a question of survival.

Rusiate Nayacakalau advised forty years ago that Fijians must modify their traditional practices if they are to prosper in the modern world.  But can they do so without losing their sense of community?

Many Fijians are experimenting.

Many Fijians today (and some Fijian churches) are curtailing reguregu and other traditional functions in order to reduce wasteful expenditure and time away from work.

Dr Ropate Qalo’s family company, the Mucunabitu Iron Works did not allow shareholders or traditional obligations to touch funds required for company growth (read his book).

Many Fijian families are quietly becoming rich, through company shares, private property and bank deposits- assets which are invisible to their communities and therefore able to resist traditional obligations.

Leaders cannot have it both ways

Of course, some religious and political leaders do not approve.

 

But do Fijian political and religious leaders try to have it both ways?

 

They demand that Fijians must fulfil their traditional obligations, whatever the material cost to their families- they must not be “mamagi like the kaidia”.

 

And then, when Fijians fail to become Punjas and Lees, they blame the kaidia.  They threaten political stability and even violence.

 

This is not fair on either the thousands of hard-working Fijian entrepreneurs (who we see all around us), or the Indo-Fijians.

 

Rev Koroi,  Mr Qereqeretabua and the Tui Nayau, are voices of reason, deeply committed to the well-being of the Fijian community.

 

Economists know that their advice to their communities to moderate (not totally eliminate) their traditional social obligations and focus more on their families, is soundly based.

 

A summit of Fijian entrepreneurs, religious and political leaders, to publicly agree on this issue, would be useful for Fijian development.

 

In the harsh globalised world, indigenous Fijians must also make hard choices, as others have done.

 

Those who want to make a buck, must stop passing the buck.   In more ways than one.

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