Melanesia in Review: Issues and Events, 2015

New Caledonia, Papua New Guinea, Papua, and Solomon Islands are not reviewed in this issue.

Fiji

For the most part, 2015 was a good year for the government led by Josaia Voreqe “Frank” Bainimarama. With 59 percent of the 2014 national vote at the September 2014 election, and 32 of the 50 seats in Parliament, the governing FijiFirst Party had a strong mandate. In view of the disarray of the Opposition, FijiFirst had good prospects of winning the next election, scheduled for 2018. Robust economic growth continued for a third successive year in 2015, and the government sustained its modernizing agenda with extensive infrastructure spending as well as legal and educational reforms. Nevertheless, stability remains elusive. Sections of the indigenous community are deeply hostile to the FijiFirst administration. The Republic of Fiji Military Forces (rfmf) remains determined to clamp down firmly on any potential or perceived threat. Efforts by Police Commissioner Ben Groenewald, an expatriate South African, to bring to justice members of the security forces for human-rights abuses were frustrated by rfmf intervention. In November, Groenewald resigned, more in despair than protest.

The Fiji economy is growing strongly. Two sluggish years (2.7% gross domestic product [gdp] growth in 2011, 1.8% in 2012) have been followed by three years of more rapid expansion: 4.6 percent in 2013, 3.8 percent in 2014, and an expected 4.3 percent in 2015 (adb 2015a; imf 2015). Despite this, Fiji’s gdp per capita remains below the level reached in 2006 (Chand 2015, 204). Tourism and remittance earnings have been the main drivers of growth, while sugar has continued to stagnate with many farmers exiting the industry and a contraction of the land area under cane cultivation. Visitor arrivals over 2015 were substantially above 2012–2014 levels, and capital investment during 2013–2015 has been sustained above 25 percent of gdp—driven upward by heavy public spending on roads and bridges (rbf 2015). In May, Standard & Poor’s raised Fiji’s sovereign credit rating from b to b+. In September, the Fiji government was able to roll over its 2016 maturing loan, with a fresh f$200 million bond at 6.6 percent interest (f$1.00 is equivalent to around us$0.46). Public debt has fallen from 55 percent of gdp in 2010 to 49.5 percent in 2015 (adb 2015b, 5), excluding the liabilities of state-owned corporations (entailing approximately an additional 30% of gdp).

The sugar industry remains deeply troubled, despite some improvement over 2011–2014. The Fiji Sugar Corporation (fsc) was suspended from the Suva stock exchange owing to severe financial difficulties in October 2009 and was officially delisted in 2010. It reported negative earnings of f$36.8 million in 2009 and f$179.1 million in 2010, but thereafter showed some signs of recovery with operating losses claimed to be diminishing from f$32 million in 2011 to f$14 million in 2012, f$10 million in 2013, and f$5 million in 2014 (Fiji Times, 14 May 2015; Narsey 2015a). According to the official figures, the government paid f$175 million in 2010 and f$36.5 million in 2012 to cover fsc deficits (Fiji Times, 13 Feb 2015). The fsc reported assets of f$227 million in 2014, but its liabilities amounted to f$374 million (fsc 2014). According to National Federation Party (nfp) leader Biman Prasad, the number of sugarcane growers has fallen from 18,000 to 13,000 over 2007–2015 (Fiji Times, 13 Feb 2015). Many of those “farmers” who remain now cultivate diminished plots solely to pay their Taukei Land Trust Board (tltb) rents but rely on ancillary incomes for other basic needs. Farmers report increasing difficulty recruiting cane cutters at harvesting time.

Partial stabilization over 2012–2014 occurred with assistance from US-owned refiner Tate & Lyle, which continues to purchase the bulk of Fiji sugar for European markets. The relief is likely to be temporary. Fiji sugar prices had widely been expected to decrease over 2009–2015 in tandem with the 36 percent phased decline in the European Union’s officially...