Friday, 22 April 2016

Economic Recovery after TC Winston

There is no denying that we were hit by the strongest cyclone ever recorded in the Southern Hemisphere. To the credit of the nation, we were resilient and did not allow the cyclone's monster size ravages to overwhelm us. In Suva for example, most people were not only cleaning up their homes and compounds but also clearing blocked drains on streets and also removing debris the day after YC Winston struck. Referring to the importance of resilient communities, the Japanese ambassador Takuji Hanatani noted that  the key to disaster risk reduction is investing before disaster strikes. Japan had provided an additional $F1.345million through its grant Assistance for Grassroots Human Security Projects that will contribute to the recovery of Fiji and to building more resilient communities. News reports from Koro, Ba and many cyclone ravaged areas indicate that people have started rebuilding and planting crops and not waiting for material aid to arrive.
The holistic approach of the NDMO working with the public, NGOs and international partners  has meant that while relief and rehabilitation work continue, economic recovery plans are also being actively pursued.

Economy
While the current growth forecast is being revised down to 2.5%, the Reserve Bank of Fiji continues to maintain the Overnight Policy Rate at 0.5% to help rebuild the economy. It is expected that the inflation rate will be below 3%. Our foreign reserves currently sits at $2.019 billion which is enough to to cover 5.7 months of imports. While this is healthy, it may go down slightly due to demands for imports in the next quarter, to help in rehabilitation work. Agriculture exports will also be lower in the coming months given the $208 million loss in crops and livestock. It is good news that the Ministry of Agriculture has started giving out seedlings to farmers in the West and North.
The positive side is that tourism will see a boost in the coming months and there will be higher revenue from remittances. The RBF has also taken decisive action in reintroducing the Natural Disaster Rehabilitation Facility (NDRF) to provides funding for businesses faced with either production loss that needs stocks to be replaced or damaged inventory, or asset loss which may include repairs for damage to business properties.

Energy Supply
One area that was heavily affected by TC Winston was electricity, a necessity when running businesses!  Hospitals, schools, hotels, dairy facilities, businesses and tens of thousands of households were affected by the constant power outages. NZ’s aid of FJ$1.42 million to help restore electricity infrastructure, including re-erecting fallen power poles, restringing power lines and reinstalling fallen transformers and other overhead electricity distribution equipment go a very long way in supporting economic recovery. The Minister of Finance, Hon Aiyaz Sayed-Khaiyum, has also met with the Indian Minister for Energy, Shri Piyush Goyal. They discussed the impact of TC Winston on the energy sector and the need to protect the sector from widespread damage in the future. A robust approach through the use of solar, wind and hydro energy to enable cost effective, 24-hour supply of electricity to all homes in Fiji was also discussed.

Tourism
Fiji was very fortunate that the main tourism areas like Denarau, the Coral Coast and Mamanuca were not affected by TC Winston. A lot of goodwill has also been shown by developed nations like Australia, NZ, and the US who revised their travel advisories when the situation was made clear to them. Fiji Airways provided major discounted airfares to Nadi for tourists coming from Australia and New Zealand. Discounts go over 50% for Australia and over 30% for NZ and while sales ended on March 15, the fares are applicable for travel between March 4 to June 16.
In a bid to improve and build the Fiji – China relationship, It is good news that the China Chamber of Commerce of Fiji is being set up soon to enhance trade between the two countries..
Yang Xunlei of the Chinese Embassy in Fiji noted that China is a huge market and that many Fijian products have strong attraction in higher-end niche markets such as organic agriculture products, seafood, skin, and beauty products.

Upholding Good Practices
An important factor in the push for economic recovery is the need for businesses to practice fair trade practices. The Fiji Commerce Commission has warned that penalties including imprisonment can be imposed if businesses engage in unfair practices after Cyclone Winston. Commission Chair Joann Young had stated that the public reported some businesses of jacking up prices, hoarding goods and refusing to provide supplies and adulterating certain consumer products to make profit.
The Fiji Independent Commission Against Corruption is working with the National Disaster Management Office (NDMO) and Divisional Commissioner’s office to maintain transparency and accountability throughout its rehabilitation operation post Cyclone Winston.
This is a proactive approach taken to minimise the likelihood of abuse by public officers. While natural disasters do not create corruption and fraud, studies have shown it creates conditions in which those crimes can thrive. Corruption is also helped by the relaxed procedures to ensure speedy delivery of aid and services.

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