Winston inflicts significant blow to Fiji's economy
The Asian Development Bank says Fiji's economy could face losses of tens of millions of dollars following Cyclone Winston.
Transcript
The Asian Development Bank says Fiji's economy could face losses of tens of millions of dollars following Cyclone Winston.
The category five cyclone tore through the islands with the strongest winds locals have ever experienced on Saturday, destroying crops and flattening buildings.
The ADB south pacific regional director, Rob Jauncey, says there has been extensive damage to sugar and agriculture sectors, the backbone of the Fiji's economy.
He told Sally Round it is also likely the tourism industry will take a hit.
ROB JAUNCEY: It will be a very significant blow for the Fiji economy. Cyclone Winston was the strongest cyclone ever to hit Fiji and one of the strongest ever in the Southern Hemisphere. There's clearly been very extensive damage to villages across the country; there are hundreds if not thousands of houses damaged and destroyed. Agriculture and livelihoods for many people are going to be badly affected and there's been significant infrastructure damage across the country. Many schools have been destroyed, wharves and jetties damaged, and the power supply remains out for most of the country and is still being restored.
SALLY ROUND: Fiji was experiencing way better growth rates since the elections, they recorded a 5.3 percent growth rate last year. Will the country now be put into major recession by the cyclone?
RJ: It will take some time to determine the full economic impact. Clearly it is going to set Fiji back significantly; on the other hand the economy has been doing very well recently. There's been significant donor responses, and I think we're hoping and certainly the government and the tourism industry is hoping that people will continue to visit now that the cyclone's passed and I think that's going to be critical but it is going to take a couple of weeks to assess the full damage on the economy.
SR: How quickly can it take for tourism to return, going on the example for cyclone Pam in Vanuatu for instance?
RJ: I think in Pam, it did take several months in Vanuatu. One of the advantages in Fiji is while much of the country was very very hard hit many of the tourist resorts were spared the worst of the damage, are still open and operating, have generators so I think there's certainly a hope in Fiji that the tourists will continue to come to what is a beautiful and welcoming country.
SR: The sugar industry has also taken a substantial hit, we're hearing about millions of dollars worth of damage, crops raised, what impact is that going to have?
RJ: I expect on the agriculture and the sugar industries in general we're going to see very expensive damage that's going to affect not only GDP, Fiji's overall economy but there are many many households across Fiji who make their livelihood from small-scale agriculture. In some ways it's the safety net of the economy so as well as having a significant hit as you say, tens of millions of dollars on the overall economy, this is going to specifically affect many of the poorer households in Fiji.
SR: And Fiji is seen as a hub for the region, what are the flow on effects of the damage to Fiji for other countries in the Pacific?
RJ: We'll have to see what the flow on effects, clearly this is going to be a very significant hit for Fiji. I think we're hopeful at the moment that the flow on effects will be able to be contained.
SR: The government's coming up with an assistance package for the people. Banks have given assurances that there'll be restructured loans, low interest, unsecured loans. Will this be enough do you think for the average person?
RJ: I think the government has made clear this is a start initially. We've been pretty impressed with the government response to date. Clearly as a full assessment of the damage is able to be undertaken there's going to be a need for additional measures and the government's made clear that they are prepared to take additional measures. From ADBs side, our president announced today that ADB will make an initial $US2 million grant available to the government of Fiji and our vice president will be coming to Fiji on the weekend to sign that and we're committed to also providing any additional longer term reconstruction assistance that the government and the country may require which I expect will be extensive.
SR: I don't know how much you know about the sugar industry but that was already struggling from what we know, do you think that this could be the death of the industry almost?
RJ: I wouldn't go that far. I think over the past couple of years we have seen the sugar industry stabilise after several years of declines, certainly this isn't going to help, it's going to be a big hit for many growers. But I think it's a very resilient country and people and I certainly wouldn't say that this was the death knell of sugar yet.
SR: Could such a disaster, disastrous as it is, could it down the line inject more energy into the economy with a building boom for instance?
RJ: What we've seen in many countries after disasters is a very sudden and immediate shock on the economy; a significant decrease in economic activity. But certainly over the next 12 to 18 months I suspect there will be a spurt of growth as a result of the reconstruction support.
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