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“Fiji@50: how did Fiji share its cake?” (FT 10 Oct.2020)

11/10/2020

Fiji@50: sharing of the cake

In Part I of this article, I contrasted the poor record of Fiji over its 50 years of independence in growing the GDP cake with the much better performances of Malaysia and Mauritius.

In this Part II, I focus on the sharing of Fiji’s cake with six important interest groups: the young, the elderly, workers, women, indigenous Fijians, and the future generations (via Public Debt).

The harsh economic reality is that if “the size of the national cake” is growing poorly, you tend to have a “zero sum game” where gains for one group (the strong) are usually at the expense of others, usually the politically weak.

Let me start with the small bit of good news on access to education, boosted by the Bainimarama Government.

The young and education

For most of the colonial period, only the elite indigenous Fijians were guaranteed education (such as at QVS and ACS) while the commoner Fijians and Indo-Fijians were left to fend for themselves, usually through their religious organizations like the Catholics, Methodists, Hindu and Chinese managed schools.

At tertiary levels, access to scholarships for non-indigenous groups was always a struggle, as was the funding of early childhood education.

With Indo-Fijian parties such as National Federation Party and Fiji Labour Party prevented by military coups from governing (which I suspect they would have done reasonably well in education as well) the Bainimarama Government eventually allocated enough taxpayers’ money to ensure almost “universal education”, in the process guaranteeing the support of Indo-Fijian voters.

FBS statistics for 2015-16 show that school enrolments are at record high at every stage of education- early childhood (around 82%) , primary (99%), secondary (88%) and tertiary (43%), with females generally doing better.

But there are many hidden issues such as serious deterioration in the quality of schools and teaching (with high rates of emigration of qualified and experienced school teachers, especially at the secondary and higher levels), lackadaisical management with government funding and control strengthening the “handout” mentality among parents and school managements.

While opportunities for tertiary education have risen locally with the rise of national universities, they all suffer from deteriorating quality of student intakes (loss of the best to universities abroad) and inability to hire quality academic staff.

A once good regional university has badly deteriorated since the Bainimarama coup with a compromised management willingly practicing censorship on academics and students, with politicized council membership and interference undermining not just university management but regional solidarity, while most academics have gone into standby mode of operation.

Women

Despite all of the Fiji Governments’ commitments to international protocols on gender equality at the UN, gender equality on the ground has a long way to go in Fiji.

While there is good gender balance in education especially in aggregate numbers, girls and women still lag behind in the STEM subjects and hence in professional employment in the economy.

Even though by the ultimate measure of total time worked on both paid and unpaid activities, women do more than 50% of the total work done in Fiji, only 39% of women aged 15 and above, are in income earning employment (defined as “economically active”) as opposed to 77%% of men.

Statisticians and economists continue to contribute to the economic marginalization of women by assuming in their definitions that that unpaid household work (three quarters done by women and girls) is not “productive economic work”.

Much higher proportions of highly qualified women are not working for incomes: 41% of women with certificates and diplomas (compared to only 17% of men), and 24% of women with degrees  (compared to only 10% of men with degrees).  This represents a huge waste of human capital for Fiji, largely because government fails to provide child care for mothers who wish to work for income.

One bit of good news is that there is roughly gender balance in civil service employment at virtually all levels, although declining slightly at the higher levels.

But in the private sector, only 25% of business owners submitting tax returns are females, and only 16% at the highest income brackets.

Women’s average incomes are less than men’s at all age groups, occupation groups, industry groups and throughout the economy, some 16% less in aggregate.  Women’s rates of poverty are higher in virtually all the dimensions throughout the economy.

Given their lower numbers of income earning employment and their lower average incomes, women only receive 30% of all income earned in Fiji, mostly at the lower income and middle income levels. They are a mere 20% of the highest income groups who pay taxes in Fiji and earn only around 20% of all incomes reported to FRCS for tax purposes.

Not surprisingly, they own only 33% of all the superannuation funds  held with the FNPF (probably less after COVID-19), and almost certainly much less of savings and time deposits with private banks and financial institutions.

Then there is the never discussed property ownership bias against women:  how many Fiji families (especially Indo-Fijian) have become gender neutral enough to ensure (as I once changed in the wills of my parents) that upon their deaths, their estates would be left equally to daughters and sons? I am still waiting for my commission from my dear sisters.

But politically, women continue to be grossly under-represented both in the national parliament and in most governing bodies in the public and private arena.

A wonderful opportunity was lost when the government-established Yash Ghai Commission’s Draft Constitution was trashed by the Bainimarama Government thereby also rejecting a “Closed List” provision in the electoral system which would have encouraged gender parity in parliament, as long as political parties alternated women and men on their party lists.

May I suggest that the women’s organizations (FWRM, FWCC, Femlink etc.) get together and produce a Fiji@50 Fiji Times Gender Supplement which acknowledges the courageous work of all the pioneers of the past fifty years, and today’s fighters who are soldiering on.

Indigenous Fijians (iTaukei)

The ethnic sharing of resources in Fiji has always been a political hot potato since independence, giving rise to four military coups since 1970, and will still be there despite many protestations that “we are all Fijians”.

In land and qoliqoli resources, indigenous Fijians may have majority ownership but it has not translated into incomes.

While comprising some 65% of the population, indigenous Fijians own only a tiny fraction of businesses, except for one major company (Fijian Holdings Limited) where ownership gives rise to dividends but unfortunately not entrepreneurship.

It is totally unclear today, what proportion of taxpayer funded tertiary level training and in various important professional fields go to indigenous Fijians.  I remind that the FBS emigration data of seven years ago, clearly indicate that they are far more likely to remain in Fiji than the other ethnic groups who keep emigrating, taking with them their taxpayer-funded skills.

Indigenous Fijians do have roughly proportionate share of civil service jobs at all levels, and virtually a hundred percent of military and police employment.

One dismaying feature of the Bainimarama Revolution is that the slogan “we are all Fijians” is used to justify banning the collection, analysis and dissemination of any information on the ethnic dimensions of all the development indicators on which the FBS normally gathers statistics, including business ownership, employment, incomes and poverty.

There would be outrage in Australia if any political leader were to demand that the Australian Bureau of Statistics stop reporting on the development indicators for Australian Aboriginal and Torres Islanders because “we are all Australians”.

Yet globally, UN Conventions (to which Fiji allegedly subscribes) fully recognize the need for recognition of the special development needs of indigenous peoples, universally marginalized by globalization and in Fiji (as in Australia) over-represented in prison populations.

While it is legitimate to criticize ethnonationalists who advocate illegal methods as solutions, the baby (legitimate indigenous concerns) should not be thrown out with the bathwater.

How about a Fiji Times Supplement on the special development needs of indigenous Fijians and perhaps a list of those principled few who have historically voiced legitimate concerns for the marginalized iTaukei?

Workers and Employers

The struggle of workers and their unions to improve their lot in life is a central theme in the history of all capitalist countries, and Fiji is no exception.

Once upon a time, trade unions were powerful forces in politics often in partnership with university academics, such as during the late 1980s when the unions energetically organized against the Wage Freeze imposed by the Alliance Government.

The unions eventually formed the Fiji Labor Party which won the 1987 Elections in partnership with the cane farmers’ party, the National Federation Party.  But within a month a coup occurred led by Fijian ethnonationalists and a pro-business party returned to power.  The same happened after the 1999 Elections.

Following the 2006 Elections, despite the Fiji Labour Party being a partner in the Qarase Government, yet another coup occurred with the strange participation of the FLP Leader, until he was ejected for reasons unknown but may be guessed at, especially with one million dollar fines being readily paid for tax evasion on funds abroad.

Over the last fifty years, positive concepts such as “Tripartite Forum” were experimented with, including having workers’ representatives on important public enterprises like the Fiji National Provident Fund. 

But today that tripartite spirit has been demolished, employers’ associations make empty boasts about being valuable forums for industrial relations.

Sadly, there is a total absence in the public arena, of any business leaders advocating good governance and fair treatment of workers, regardless of the many medals they are given.

The Bainimarama Government has gradually adopted pro-employer policies, placing business representatives through the entire government apparatus where they safeguard their interests.

Union leaders and the independent media have been intimidated using government apparatus such as FICAC, the police  and MIDA, while some media receive preferential taxpayers’ funds.

Wages Councils and unions have been gradually emasculated and real wages continue to lose ground to inflation, especially of workers not represented by unions.

While some academics (including myself) used to criticize foreign white employers in the early seventies, the facts on wages as the local companies took over, made it clear that local non-white employers were far more rapacious in their exploitation of workers, than the foreign white employers.

As a Gujarati economist, I used to appreciate the how frugality of Gujarati businessmen contributed to their business success, even rarely contributing to schools or temples.   So the current social media revelations of the unprecedented massive amounts donated by Gujarati businessmen (and their wives, sisters and daughters) to the governing party begs the question: what material benefits have they received as quid pro quo from the government?

Of course, no Political Leader ever records (and the public never sees) the gifts of brown paper bags filled with colored paper, the preferred modus operandi of the really smart, rich and powerful in Fiji and elsewhere.

But the public can see the changing ethnic (and expatriate) composition of the boards of public enterprises, whose virtually uncontrolled expenditures in a ten year period have led Fiji’s Public Debt to balloon from $2 billion to over $9 billion, without in any way strengthening the capacity of the Fiji economy to repay that debt (see the last section of this article).

Scandalously, for the first time in fifty years of independence, most of these huge expenditures are largely unaudited by the Auditor General’s Office, as they were in the days of the PWD.

One disastrous human resource policy callously allowed by pliant Public Services Commission members has been the compulsory retirement of civil servants at age 55.  While that rule was applied to get rid of independent civil servants, it was not applied to the politically powerful and their families proving that “we are all equal, but some are more equal than others”.

Workers were also harmed when the Bainimarama Government removed workers’ representatives from the Board of the FNPF which also allowed the illegal reduction of pensions in 2012.

Recently under the umbrella of COVID-19 responses, there has been a huge reduction of FNPF contributions, in reality transferring more than a hundred millions from workers’ FNPF to employers pockets at the stroke of a pen.  Such a blatant loss of workers’ incomes has never been done before in the 50 year history of Fiji.

Rarely discussed publicly is a set of brilliant summary statistics derived from RBF and IMF data that show that from the 1980s, the share of Fiji’s cake (GDP) going to employees has declined from an average of 43% before 2000, to 30% after 2007.  The share of the national cake going to profits increased from 45% to 51% over the same period.

I suggest that the trade unionists of today compile a Fiji@50 Fiji Times Supplement which would acknowledge all the courageous principled union fighters over the years, and the odd ethical employer or two.

The elderly

I have referred above to the enforced retirement of civil servants at the age of 55 and the forced illegal reduction of pensions in 2012.

With the Bainimarama Government encouraging FNPF Members to draw on their FNPF funds to counter the effects of the COVID-19 crisis, tens of thousands of FNPF Members have now reduced their retirement funds to minimal or even zero amounts, virtually unable to support their retirement.

But it is the care of the elderly that is a major crisis unfolding within the poorest households of Fiji.

My population projections (Graph 1) indicate a massive increase in the ratio of the elderly to those of working age (those aged 15 to 54), especially for Indo-Fijians, with the proportion having already risen from 19% in 2007 to 42% in 2020, and will rise to an even higher 59% in 2027.

Remember it costs far more to care for the elderly than it does for children.

Progressive Indo-Fijian social organizations like the Sangam are acutely aware that there is already in 2020, a massive burden on Indo-Fijian families posed by the care of the elderly and the burden will rise even higher in 2027.

Government has not built homes for the elderly of the destitute over the last thirteen years, or measures to help the elderly who remain in their homes.  That burden is being left to religious organizations like the Catholics and Sangam who are already struggling.

Fiji poorest elderly are being denied not just a fair share of the national cake, but of bread and roti as well.

How about a Fiji Times Supplement on the battles of the elderly, including a list of the fighters of the past, which might include the name “David Burness”?

Future Generations

While this article discusses the sharing of the national cake over the last fifty years,  we do huge injustice if we ignore how we are burdening future generations by irresponsibly increasing Public Debt.

Of course, governments should borrow to invest in productive capital expenditure, such as roads, electricity, sewerage, ports, schools, hospitals, which will benefit future generations as well as current one.

But this is justified only if these expenditures lead to increased economic growth and a bigger national cake which will be enjoyed by future generations.

But if governments spend irresponsibly then the Public Debt is a massive fraud on future generations.

Ask yourself: have Fiji governments (some unelected) increased civil service salaries just before an election;  or engaged in hasty, excessive and unwise spending on infrastructure (without auditing by the Auditor General’s Office); or had to clean up financial disasters like the National Bank of Fiji or Fiji Sugar Corporation?

Some four years ago, I wrote about the sleeping public debt nightmare that was facing Fiji. Sadly, COVID-19 has today woken that nightmare.

Government revenue has crashed to half its normal levels, while the Government has taken the easy way out and maintained its level of expenditure, by borrowing and increasing the public debt even further. While the economy has crashed with massive unemployment, Government has no plans other than making unrealistically optimistic projections about the GDP in the future.

Fiji’s Public Debt has increased from around $2 billion in 2006 to over $8 billion currently.; public debt per household has more than doubled from about $16 thousand dollars to over $34 thousand dollars.

With debt repayment (capital and interest) a FIRST CHARGE on Government revenues, the amounts left for education, health, social welfare will all be horribly squeezed in the future, hurting the poorest in Fiji.

Of course, the rich and powerful will not bear any of that burden:  foreign businessmen, large local businesses who shift their profits abroad (and many also keep their families abroad); and all the political leaders (and their friends and family members) who have gained financially in the meantime.

Other marginalized groups also

There are of course other marginalized groups in society who have struggled for fifty years to advance their cause; the rural people, people with disabilities, the LGBTQ+ communities, and not forgetting the silent voiceless environment (and the voice of Tim Howisck-Smith).

They all need their special Fiji@50 Supplements in the Fiji Times. 

50 year stock takes are always useful: to know where you are going, you need to know where you have come from.

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