9 Nov 2009

Expulsion of diplomats from Fiji not good for economy, says economist

8:07 pm on 9 November 2009

A leading Fiji economist says the expulsion of top diplomats from Australia and New Zealand will not be good for the country's economy.

Fiji's interim Prime Minister, Commodore Frank Bainimarama says "all is well" between Fiji and its Trans-Tasman neighbours at a business level.

And business leaders are denying the expulsions will have a negative impact.

But Professor Wadan Narsey from the University of the South Pacific says the diplomatic row will affect the business community which he claims is reluctant to criticise the interim regime's actions.

"Like it or lump it Australia and New Zealand are our two biggest neighbours. They are our two biggest trading partners and they also have a lot of investment in Fiji so expelling their high commissioners is not good for the Fiji economy, it's not going to improve investor confidence, and the current indications are that this year we are going to have possibly one to two percent decline again in the GDP."

Professor Narsey says the private sector will not say anything negative because of the favours it can get from the interim government.

He says Tourism Fiji is expecting in the next budget, a very large increase in its advertising grant.