‘Wrong politics’

Economy Minister Aiyaz Sayed-Khaiyum while delivering the 2021-2022 National Budget. Picture: PARLIAMENT OF FIJI/SUPPLIED

I am sure you have heard and read many views on the 2021/2022 national Budget presented by the Minister for Finance last Friday. Some views are full  of praise. Some are realistic.

I have in the course of the past four days, issued daily analysis of the budget. On Thursday, I presented a full analysis. I would like to think that my views are technically realistic. I have backed up my assessment with facts and figures.

I am not a doomsayer.  Much of what I have predicted has come to pass. I have  been there, done that, in real life. I was the Governor of the Reserve Bank of Fiji.

I  have prepared many nation- al budgets as the permanent  secretary for Finance.

I have a Master’s degree in economics and Bachelor’s  degree in economics and ac- counting. I have rescued the  country from two crises in 2006 and 2000.

I think I know what I am talking about. I have watched with amazement and dismay at the manner this Minister  for the Economy has man- aged our economy and finance.

In my expert assessment, the budgets before the  pandemic were riddled with misjudgments. I could see our financial and economic disasters as far back as 2009.  It took a pandemic for everyone to see what I was seeing.

I am appalled at the past  three budgets after the pandemic, two in 2020 and this  one for 2021/2022. My major worry was that  these budgets were not ad- dressing the root causes of  our problems.

This Government refuses  to concede the multiple crises that we are facing. They  dance around these crises  with many “feel good” gimmicks which make the holes  deeper and deeper, and the solutions harder and harder.

Tragically for Fiji, this budget commits the same  mistakes. It does not con- cede the realities that we  are facing – a) a health crisis which is out of control; b) a deepening economic crisis; and c) a financial situation  which is in tatters. We can- not begin to find solutions  if we do not concede these starting points.

Health crisis is out of control Everyone knows that the  health crisis is out of control. Our positivity rate is  more than five times the WHO benchmark. Deaths are rapidly rising. There were 22 deaths the other day including two pregnant  mothers.

It is heart wrenching.  Based on the death mortality rate, I expect that 180  more people may die before the herd immunisation level is reached.

What will we tell the people that have lost and  will lose loved ones? Do we  tell them, sorry, the Government made the wrong call?  Our health system is  crumbling.

It is so sickening to see sick people living  in shocking hospital conditions and of families still  looking for the body of their loved ones.

The budget has only one silver bullet to solve the  health crisis, which is immunisation. In the very  likely event that we miss this target, our economic  and social woes will be multiplied many times over.

Many more people will die. This budget only gave $9  million more to the Minis- try of Health. This is tragic.  If we are serious about stop- ping the virus, we should  have reassigned the money allocated to many things that do not matter, to this priority.

This budget, like many past budgets, has the wrong priorities. Economic disaster  The budget does not con- cede that we have a serious economic crisis on our  hands. Next year, the economy would have declined for  three years in a row by a cumulative 25 per cent. Please  do not blame the COVID-19  virus.

The bust of the Bainimarama Boom was definitely coming, virus or no virus.  The government’s own  macroeconomic indicators confirm our economic  woes. The current account of the balance of payments has risen to 13 per cent of GDP when 4 per cent was the norm.

Our foreign reserves are  being propped up by over- seas borrowing, aid flows  and sale of assets. I estimate  about 40 per cent of our peo- ple are surviving below the  poverty line. The income of one third of the population  has been reduced or completely lost.

We have lost $3 billion in national income in two years. The social impact of this crisis is huge. Sadly,  the 2022 budget failed to ad- dress or even mention any of  these.

Instead, the minister talked a lot about stability and sustainability. This is denial at its very best. Financial disaster Believe me, we are in a big fi nancial mess, the root of which goes back to the  spending spree of this Government since 2006.

The  Minister for the Economy thinks that money grows on trees. I wish it did. However, what dismays me is that the Government has done nothing to reform its expenses. It carries on as if nothing is wrong. The ministers drive around in  fl ash tinted cars with escorts and security guards.

They only cut their salaries by 15 per cent when it  should be 50 per cent. The Prime Minister still retains his fund of $2 million at such a time as this.

QORVIS, the  international public relations company, is still being  funded by taxpayers to put out political spins.  Instead, of reducing wastages, this budget cut social  welfare programs and under resourced the Ministry  of Health.

Government has decided to apply zero-based budgeting, but it has put it off to next year.  The medium term strategic plan mentioned expenditure reforms, but Government has deferred them to  future years.

It is absolutely urgent that we take those reforms now.  This inaction again reflects the lack of commitment by this Government to  solve the root causes of our financial mess.

This budget has increased the rate of borrowing. It could have reduced it if they have reformed expenses and introduced new revenue measures to be borne by high income earners.  But no, the minister decided to woo the voters by  doing many little things  that do not solve the problems that we face.

The only policy I know that this Government has applied successfully in the private sector since 2006 is the divide and rule policy. Therefore, the solution is simple.

The most effective way to restore private sector growth and provide more jobs is for the Government  to stop its political intervention in the commercial  businesses of the private sector.

The best measure of what the Government is doing in the private sector is Fiji’s ranking in the World Bank’s “Ease of Doing Business”.

Fiji’s ranking under this index has worsened terribly from 52nd in 2006 to 102nd  last year.

On the sub-components of the index of “get- ting credit” and “starting a  business”, only 20 countries out of 180 are worse than Fiji. There is nothing in the budget that will raise the  low level of investor confidence.

The incentives to  investors in the budget will not be effective. To raise this confidence, Government must stop interfering in  businesses and start to ad- dress the declining ratings  of the World Bank. Conditional support  The unemployment sup- port in the budget is welcomed.

But by making it  conditional on vaccination is unethical and unjust.

The  Government must remember that it is the people’s  money that they are distributing.

Therefore, it is  unjust to make vaccination a condition of receiving help  when the taxpayers are suffering.  There are many other ways of encouraging people to vaccinate. At a time like this, the decision by the Minister for the Economy  to make the handout condi- tional refl ects the disregard  that this Government has for the people’s welfare.

The unemployment assistance is also inadequate,  estimated at less than $2 a  day which is below the poverty line.  There are numerous is- sues in the budget that lack  proper rationale. My favourite is the waiver of traffic  fines including speeding.

Why on earth would a government reward the people  to break the law and endanger lives?  This is a Mickey Mouse gimmick. Minister for the Economy must go. When we do not have the money, we must focus on what matters.

Unfortunately, the Minister for the Economy has  played his usual game of dazzling the people with things that do not matter too much. This is unacceptable. It has gone on for too long.

I believe that the Minister for the Economy must go before he completely destroys our country.

SAVENACA NARUBE is the leader of Unity Fiji, former governor of the Reserve Bank of Fiji and permanent secretary for Finance.

The views expressed in this article are his and not necessarily shared by this newspaper.

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