Monday, June 18, 2007

The Question of Growth.

In a Fiji Live article, Sri Lanka's Central Bank Governor raised an important case study of his own nation in the midst of decades old civil war. The remarks would seem to contradict widely held convictions regarding stability and macroeconomics recently voiced by a USP financial expert in a Fiji Times article.

Fiji can grow despite coup

Tuesday June 19, 2007

A small country like Fiji can achieve positive growth irrespective of internal strife or external pressures, says Sri Lanka’s Central Bank Governor Ajith Cabraal.

Cabraal made this comment during the Fiji Institute of Accountants annual Congress three days ago saying Fiji had the potential to succeed despite the coup.

He said while coups can not be prevented, “the less you think about it and the more you think about economic activity, when it (coups) happens again you would still be able to move forward”.

Cabraal based that comment after drawing reference to ongoing conflict between the Sri Lankan government and a separatist militant group known as the Liberation Tigers of Tamil Eelam (LTTE or the Tamil Tigers) in the northeastern parts of the country.

He said in the beginning, LTTE’s “terrorist attacks” had paralysed Sri Lanka, halting economic activity, every time one occurred.

“However, over time we began to look at the attacks as an irritant which has to be dealt with and at the same time did not allowed it to paralyse the nation.”

Cabraal said the economy of Sri Lanka progressed when its people made this transition that the “irritant” would not affect their lives.

Sri Lanka recorded an unprecedented 7.4 per cent growth of its economy last year, a feat Cabraal said many Sri Lankans had brushed off as unattainable.

Cabraal said a lot of people in Sri Lanka still “give the excuse that Sri Lanka has a terrorist problem or an ethnic conflict or a political problem” and therefore cannot attempt “serious economic development or growth”.

“We Sri Lankans had consistently used the terrorist problem as the convenient scapegoat when explaining why we are not able to do many things.”

Cabraal said governments could take some proven steps in stimulating their economies.

“The political leadership in the country should be committed to a long term economic vision and strategy that promoted strong growth,” he said.

“Growth does not happen by accident.

“It has to be thought through carefully and painstakingly. Lessons of past experiences, good and bad, should be evaluated.”

Cabraal said the leadership should have the courage and capacity to go through with strategies “even in the face of serious challenges”.

He said the leadership could also encourage patriotism in the people and the work force, which enhances productivity.

“There should also be a can-do national attitude amongst the people,” Cabraal said.

“We have to take bold steps and build confidence to overcome the ‘some-one-else’ syndrome, where very often, many of us are content to watch and criticise while expecting others to do.”

Cabraal said Sri Lanka’s economic growth can be duplicated in Fiji but only of its people and leadership have the determination and “positive attitude” to do so.


On the performance of Fiji's overall economy, reports from Fiji Live article points out an 10% increase in Fiji's exports.

Fiji exports up 10%: Chaudhry
Monday June 18, 2007

Finance Minister Mahendra Chaudhry
Fiji's exports have increased by 10 per cent in the first four months of 2007, says interim Finance Minister Mahendra Chaudhry.

He said it could have been better if Fiji was able to take advantage of with its mahogany resources that is "still untapped".

Chaudhry said Fiji's foreign reserves are stable "at the moment" and imports are down.

"But we would like to see other resources like mahogany and fisheries to also to play a part in enhancing our export levels."

Chaudhry said compared with the same period last year, Fiji's "agricultural sector has preformed well".

"Our agricultural, wood exports are up by 10 per cent compared to the 2006 exports for the same period from January to April," he said.

Chaudhry said Fiji has also been able export an extra 55,000 tonnes of sugar to the European Union that is "over and above our usual sugar quota and this should fetch us a good price".

"While this increase in sugar revenue will assist our exports, we have also got to work extra hard and enhance other exports and that is very critical to our balance of payments."

Chaudhry expressed concerned with "the fact that mahogany is still lying untapped".

"This huge resource should enter the economy and we are now giving it priority," he said.

Chaudhry said the priority is to "sort out the disputes that exist in this particular area between the landowners and the Fiji Hardwood Cooperation Limited".

The former Prime Minister of the Peoples Coalition Government of 1999 knows very well the disputes in the mahogany industry, which was a contentious issue between his deposed government and the mahogany landowners during his one-year term in office.

In fact George Speight who led the uprising on May 2000 and took Chaudhry and his government hostage for 56 days was the former director of the Fiji Hardwood Cooperation.

This time Chaudhry said he will sort out the disputes before moving on to the "next stage", which is getting "strategic partners into the industry to downstream processing of this huge resource which will not only befit our exports and the national economy but more particularly the indigenous resource owners".


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