Fiji's economy booms but not for all

Transcript

Latest figures from Fiji show the country's economy grew by more than five percent last year.

But concerns remain about debt and whether gains from growth are trickling down to the poor.

Sally Round has this report.

The lucky ones live on the right hand side of the road as you enter Jittu Estate on the outskirts of the Suva. They have new apartments, good plumbing and safe electricity. Look to the left, and you'll see ramshackle corrugated iron huts, a spaghetti wire of power lines and open drains stretching up the hill. Father Kevin Barr of the People's Community Network says the government has helped fund the scheme to rehouse all the Jittu squatter in 900 homes over the next five years.

KEVIN BARR: They've done some good things for the poorer people, free bus fares for school children, free tuition fees, raising of pensions, and a number of good things have been done, like the housing that we deal with, not only here but in other parts of the country and I think a lot of people are appreciative of that.

The Minister of Finance Aiyaz Sayed Khaiyum says the government's policies are working and now investment is increasing off the back of rising confidence and good returns.

AIYAZ SAYED KHAIYUM: Twenty-five percent of the value of the GDP has gone into investment. Of that 25% 19% came from the private sector. A lot of it is also from local investors. The lending amounts by banks has increased quite substantially. You'll see if you go down to a number of factories that exist they're expanding, going into new lines.

He says the government has to focus on sustaining growth to create jobs for a growing young population. But the economist and opposition MP Biman Prasad says the growth is still largely consumer driven and also down to a stagnant post coup Fiji now in catch up mode. He says the 5.3 percent growth rate has not yet created meaningful employment and small and medium businesses are suffering.

BIMAN PRASAD: We cannot continue to borrow and create economic growth largely driven by consumption expenditure and say that this is a sustainable path for economic growth. The growth that we are seeing is really not from the real sectors of the economy. If you look at manufacturing, if you look at agriculture, those are sectors which are not growing.

Dr Prasad says resource constraints need to be addressed to ensure a pick up in agriculture, mining, fisheries, forestry and manufacturing.

Father Kevin Barr says continued low wages are keeping people poor and some free services have been negated by rising costs in general.

KEVIN BARR: Wages still remain terribly low, below the poverty line.
SALLYROUND: It's a $2.32 minimum wage isn't it?
KEVIN BARR: As some people said it's a big joke, because it's only about half of what it should be if you follow the poverty line. There's too many people in poverty and because of that people can't afford better housing, good nutritious food and good health care for their families.

According to Dr Prasad 2013 figures show every man, woman and child in Fiji has a debt burden of about US$2,000 which the government has borrowed on their behalf. A bond repayment due next year is causing angst and the opposition leader Ro Teimumu Kepa says they will tackle the government on its borrowings in the coming year.

RO TEIMUMU KEPA: We are very concerned about the high level of loans that are still out there which are not being paid which are due for repayment. Somebody has to repay the loan and if we cannot repay it right away it's going to be there as a noose around our children and grandchildren's neck. And also these freebies that are out there that should not have been freebies at all.

AIYAZ SAYED-KHAIYUM: The reality is that the debt to GDP ratio in Fiji has decreased. The debt to GDP ratio in Fiji was a few years ago about 55%, the debt to GDP ratio is round about 48% now. You do need at times a particular level of debt to be able to build your assets and your infrastructure and we have been clever about it.

The president in his opening speech to parliament last week warned against running down the economy saying Fiji needed a national approach to growing the country and embedding investor confidence.