x Abu Dhabi, UAESaturday 22 July 2017

Fiji at a crossroads as nation joins global political stage

The country's elevation as chairman of the G77 is raising hopes that it can move forward after the sanctions imposed in reaction to the 2006 coup.

The Funafuti Atoll, home to half of Tuvalu's population, is believed to be at risk from climate change. Torsten Blackwood / AFP
The Funafuti Atoll, home to half of Tuvalu's population, is believed to be at risk from climate change. Torsten Blackwood / AFP

Maciu Matairavula has a vision: the creation of a sea cucumber farm in a coastal village, tapping into the growing popularity of the overfished maritime creatures.

The high-tech farm is one of a raft of business proposals - from bottled spring water to luxury hotel resorts - that are currently competing for investors in his native Fiji.

Mr Matairavula, however, has never been more optimistic. The reason? The South Pacific island state recently assumed its most high-profile international position in recent history: chairman of the Group of 77 of developing nations and China.

"The G77 chairmanship is a great elevation for Fiji and marks a big paradigm shift in terms of economic recovery and international recognition," says the businessman. "The future climate is positive."

Fiji, a scattered clutch of 330 remote islands in the South Pacific, has long enjoyed a split personality reputation as a postcard-perfect tropical but troubled paradise.

The name immediately brings to mind dramatic volcanic peaks, sweeping white sands, coral islands and crystal clear waters - alongside military coups, political instability and electoral corruption.

Now, however, the island state appears to be at a crossroads.

Amid much domestic fanfare, Fiji is settling into its new role as leader of the G77, the largest intergovernmental organisation of developing countries within the United Nations.

In its new position, Fiji will be leading the charge among developing nations in its mission to eradicate poverty, improve living standards, boost economic fortunes and increase their influence on the global political stage.

It is a timely appointment for Fiji, a British colony until 1970, whose main industries are tourism and sugar. The country tends to hit international headlines for more controversial reasons, having experienced four coups since 1987.

Currently at the helm is the prime minister Commodore Josaia Voreqe "Frank" Bainimarama, who seized power in a coup in December 2006 in an alleged attempt to quell corruption. His heavy-handed military tenure has provoked a slew of international criticism, the imposition of sanctions from Australia, New Zealand and the European Union, Fiji's expulsion from the Commonwealth - and for Fijians, economic stagnation.

Last year, however, the mood changed.

Firstly, Commodore Bainamarama announced that martial law would be lifted after three years - hailed by commentators as a vital, albeit limited, step towards democracy.

The government also announced last July the establishment of a commission to create a new constitution and most critically, pledged to hold democratic elections next year.

It was amid such a climate of tentative political optimism that last September, Fiji was unveiled in New York as the 2013 successor to Algeria, the outgoing G77 leader.

Robin Nair, Fiji's ambassador to the UAE, tells The National: "Fiji is showing leadership in political, economic, trade and social issues. It is led by an extremely proactive government with new and innovative ideas of building a nation.

"Its assumption of leadership positions on the global stage is part of this agenda and also a recognition by the international community of Fiji's capacity and understanding of international affairs."

He adds: "The business community is leveraging from Fiji's greater exposure and prestige on the global and regional stage. There is now a greater awareness and interest in Fiji among the global business and investment community, with Fiji taking several leadership roles in recent years."

At first sight, Fiji's economy does appear to be slowly reaping the benefits of its new-found - albeit tentative - political stability, with growth forecast at 2 per cent this year, according to the Asian Development Bank.

Tourist arrivals are growing healthily, despite continued sanctions, with new developments including a five-star casino scheduled to open later this year.

The national carrier Air Pacific is also being rebranded as Fiji Airways complete with an expanded fleet while the nation's sugar industry, hit hard by EU sanctions, has been restructured to bolster its efforts to emerge from the doldrums.

But independent experts, however, are more cautious, with many warning that it is only if the 2014 elections proceed democratically as scheduled that sanctions will potentially be lifted - opening the floodgates for economic growth.

And more recent political events in Fiji appear to indicate that hopes of electoral democracy may still be a distant dream for the republic.

Last month, Commodore Bainamarama announced that he was abandoning plans for the constituent assembly charged with establishing the new constitution - only months after binning a draft constitution drawn up by an earlier commission.

As a result, despite domestic proclamations relating to its G77 leadership, shadows remain cast over both the political and economic future of the troubled island state, says Jon Fraenkel, the professor of comparative politics at Victoria University of Wellington, New Zealand.

"There are many people in Fiji who are opposed to the military-led government and are very critical of such appointments as they believe that it entails international recognition of a military leader who has seized control of his country by force.

"Bainamarama has so far blown his opportunity to preside over a meaningful transition to a constitutional rule and I would anticipate that his new constitution and the election process are going to come in for quite a lot of criticism.

"People had got their hopes up as a result of the constitutional review process last year but now there's a lot of despondency.

"Investment has virtually halted, partly because domestic investors are reluctant to put their money into projects, partly because of political uncertainty and also because of the bewildering flurry of decrees that keep being passed. They constantly change the rules. There's a sense of pent-up frustration within the business community."

Such concerns were echoed by Moody's, the ratings agency, in a report published this month, stating that the economic future of Fiji remained intrinsically tied to its political situation.

Christian de Guzman, the vice president and senior analyst at Sovereign Risk Group at Moody's Investors Service, says that aside from additional interest from Chinese investors, Fiji's G77 leadership is likely to have "limited" impact on investment. "We see the investment climate in Fiji as a function of the political context," he says.

"The successful restoration of electoral democracy would be positive for Fiji's relations with its neighbours, particularly Australia and New Zealand, and multilateral development partners such as the World Bank and the Asian Development Bank. In turn, these would be positive for investment and growth."

Perhaps due to its tropical paradise-style geography, there remains one robust aspect of Fiji's economy that appears immune to coups, sanctions and political intrigue: tourism.

"Tourism is having a very successful period," says Professor David Harrison, the head of the School of Tourism and Hospitality Management at the University of the South Pacific. "Last year's arrivals were well up on the year before.

"The prospects for investments look good and provided the government keeps to its promise of having elections in 2014, this should continue."

And so perhaps it is only after - or if - these elections take place democratically next year, that investments in Fiji will flourish - and Mr Matairavula will finally be able to realise his cherished dreams of opening a sea cucumber farm.

 

business@thenational.ae