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“Love and Hate” between FLP Government and Business [The Fiji Times, 19 Nov 1999]

29/03/2012

 For most employees in this country, and Labour Governments the world over, there is a very understandable “love-hate” relationship with employers and businesses, a relationship which can easily slide into industrial unrest and economic break-down.

Workers, unions and their political parties usually see employers as filthily rich leeches, who cut wages at every opportunity, drag their feet on wage increases, lay off workers temporarily to save money (regardless of the impact on families), oppose unions from forming or operating, and even buy off union leaders.

In contrast, employers are seen to freely form their own federations, plot informally in their exclusive Clubs, drive around in Pajeros, swill double Black Labels by the bucketful, and spend an employee’s month’s wages, in a casual evening of entertainment.

A Labour Government Dilemma

  A “workers’ government” is naturally expected to redress these gripes.  And the great relief (at least for this year) that Fiji’s business sector felt when they finally saw the 2000 Budget, is only one symptom of the “love-hate” relationship that the current Labour-led Government is inevitably going to have with the business community over the next five years.

For Governments, even if elected largely by workers’ and farmers’ votes, have to assiduously court employers and investors, local and foreign.  Without the investment, there is unlikely to be the solid economic growth that is necessary to provide jobs and improve standards of living for a very large proportion of our people.

And withLomepreferences likely to disappear, with WTO driving deregulation and globalisation whichFijicannot insulate itself from, to achieve a period of sustained economic growth for the next decade must require that this “love-hate” relationship be understood and harmonised.

A complicating factor is that businesses and businesspersons, can have more subtle and potentially harmful relationships, with any Government, Labour or otherwise.

 Political Parties and “Fly-by-night” Businessmen “Friends”

  Over the years, all political parties inFiji have had their special business interest groups behind them.  Some openly allied with the large businesses, local and foreign; and some, because of the “labour” leanings, were more in support of, and supported by,  the small local businessmen and shopkeepers.

Businessmen surface at every election, providing a few thousand dollars for the campaigns. Some go all out to manipulate and control the party, right down to the minutest detail.  If their “political horse” wins, they naturally expect special favours from “their” governing Party.

Businessmen do not, and indeed cannot, have permanent exclusive associations and friendships with political parties.  Should their party lose in the elections, then overnight, they will scramble to develop associations with the new riders holding the reins of government.

There are many amusing stories told by ex-Prime Ministers, ex-Ministers and political leaders, about how former business “friends” suddenly are nowhere to be seen, once the politician is out of power.   Even ordinary MPs can tell of party business supporters becoming chilly or downright hostile once it became clear that the MP would not support their business interests in Parliament.

The current crop of new Ministers (and spouses and children) must also have some interesting tales about their newly acquired business friends, swearing their undying allegiance to God, country and the ruling parties in Government, with never-ending invitations for cocktails and private dinners.  Hospitality is a natural catalyst for return favours.

And Governments, through their discretionary policy measures, can grant favours in many forms, worth hundreds of thousands, indeed, millions of dollars, without any member of the public seeing a dollar change hands.

Over the years, millions of dollars of extra wealth have been granted through an extra 10 percent of duty protection, a restricted license or quota, a duty-free monopoly at an airport or port, a special incentive scheme for investment in tourism (such as SLIPs and Half-SLIPs), a concession in a Tax Free Zone, an interest-free or subsidised loan, privileged access to development funds without collateral, or a large Government expenditure on roads, sewerage, electricity and water connections.

It is natural for ministers to look kindly on businesses or business persons who have supported them during the election, while those on “the other side” run the risk of being frozen out from state favours, and even “punished” through discretionary measures taken against their products and services.  Not very healthy for the economy.

For entrepreneurs are few in this country, and it is quite funny that the most canny of them don’t have a particularly great record at picking the political winners.  Mind you, a few are always cunning enough to have buttered their bread on all sides, back, front, and the crust as well.

All parties need to discuss how elections can be financed on a more transparent and equitable basis, so as to reduce the vulnerability of Ministers and Governments to post-election pressure for favours from financial backers of winning political parties.

Local and foreign businessmen?

  Government also needs to guard against the very natural tendency to go overboard in favour of local businessmen, just because they claim to beFiji citizens.  The usual justification is that foreigners and “expatriate” businesses will send their profits abroad.

But capital, in this era of globalisation, has no nationality. The 1987 coups surely made it extremely clear that all businessmen behave alike, whether expatriate or local, whether European, Indian, Chinese, or Fijian.  All guarded against the risk of theFijidollar devaluing, or exchange controls being imposed, by moving and investing their available funds abroad.  They would have been financially silly not to.

And many local businessmen, who have become wealthy through privilege as “local” investors, now have more assets overseas than they have locally.  While they now operate locally using only borrowed funds, so that theirFijiexposure is virtually zero.

Workers of course also know that expatriate employers, for a number of reasons, often pay better wages than their local counterparts.  But again, this cannot be generalised.

There are many committed and model employers, both local and foreign, even in the often maligned garments industry, where, ironically, the better conditions for workers can be a plus in breaking down the trade barriers in the developed countries.

The Classic Apparel factory with the generally higher wages and better amenities for workers indicates to Australian detractors that not all garments factories are sweatshops.  The very successful micro-credit scheme run at Mark One Apparel suggests that employers do look after other needs of their employees.

But there are also businesses which are far from being model employers, and not just in relation to the low wages being paid.  Drive around all the industrial sub-divisions inFiji, and count the number of well-off businesses which force their workers to eat their lunches outside the factories, in the rain, beside the dusty roads and smelly drains.

Businessmen’s gripes

  Of course, employers also have their gripes over attitudes of Government, unions and workers.  Governments are not consistent in their policies; unions are un-necessarily belligerent and inflexible with respect to work practices; workers are not committed to productivity, quality, regularity, punctuality, and care of business property.

And many entrepreneurial businessmen, will not risk their capital, unless returns in excess of 20 percent are made.  A lower acceptable return (of say 10 to 15 percent), would lead to many more projects being invested in, with a corresponding spurt in the growth of GDP and employment.

But with investors afraid that a pro-worker Government will either  alternative between the screws and the massage, or selectively apply the screws and massage to friends and foes, many are still reluctant to invest.

And with capital and entrepreneurship free to move to any country, why should investors accept higher levels of risk, lower rates of profit and retain and reinvest inFiji?  Why should employers be more humane towards their workers, in terms of jobs, incomes, and overall welfare?

While cynics may laugh, can we create an economic climate where entrepreneurs and employers feel secure, feel they belong,  feel they won’t be victimised for their political foolishness,  feel they are valued for their contributions, more than anywhere else in the world?

How attract and keep good businessmen?

  Many businessmen (local and foreign) who have made their millions, know that making more is not going to make them or their children any happier; who know how alienating life can be in Australia, NZ, Canada and United States; who appreciate the quality of life that Fiji offers, and could be attracted to remain and build a better Fiji.  But how attract them?

We accept that the Fijian chief, for his social and political roles, is accorded a place of honour, dignity, and respect in the country, with special Constitutional provisions for the Great Council of Chiefs and in Senate.

But as important to our people are the “economic chiefs”- the Solankis, Lees, Samisonis and Whitesides, and dozens of others who feed, clothe and house thousands of workers and their families.

Our society does not systematically and consistently reward or recognise them in any concrete social way, although a chosen few may get some medals and invitations to official functions, now and then.  It is hardly compensation for what they contribute and the aggro that they get frequently.

Do we need an “Economic Senate” in this country, to which all the largest investors (employing say more than 100 workers) will automatically belong, with the most important unionists and CEOs from the largest public enterprises, and a few religious leaders?  Not just a Tripartite Forum manipulated by Government.

An “Economic Senate” which would develop and maintain an economic “compact” through which employers and employees build up a just and mutually respecting relationship, which can be the basis of industrial peace, economic growth and guaranteed improving standards of living for all our people.

An “Economic Senate” which must also bestow tangible honour, perhaps a suitable title, on all who belong.  An “Economic Senate” which could also constitutionally and independently of political parties, elect a small number of persons to the Senate of Parliament.

An Economic Senate which could minimise the fallout from the inevitable “love-hate” relationships between businesses, employees and Government.

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