Constitution Consultation will Help Economy
says Economist Professor Biman Prasad.
Professor Prasad said historically, Fiji’s economic growth has been linked closely with political stability. He said looking back at Fiji’s economic history for the last 25 years, one would note that there was an average of only two to 2.5 percent economic growth. Prof Prasad said the first period of political instability adversely affecting the economy was only offset when political dialogue commenced between 1994 and 1995.
“The result of that 25 years of stagnation is the poverty and other social issues that we have in the country today and not because of the past five years. I think we need to understand that.
“That is why, from an economic point of view, the announcement of the Constitutional consultations is a very, very good one. In fact, the start of the work on the Constitution itself can generate the kind of confidence in the economy which is needed.
“And, with proper process of taking this consultation forward and arriving at a Constitution on which there would be elections in 2014, we could set the foundations from this year for our economic growth,” Prof Prasad said.
He said that despite the fact that the country had been affected by the floods, from the last quarter of this year, the economic forecast was favourable.“We could be creating a foundation that at least by the last quarter of this year will see reasonable growth being achieved by 2013 leading up to 2014,” he said.
“We have had very poor economic growth over the last 25 years and when we look at the economic future of the country, we need to think about why we had not been able to achieve sustained growth in the country. I believe the answer in closely linked with political instability,” he said.
Prof Prasad also applauded the 2012 Budget, which he says was a ‘bold budget’.
“The intentions of the Budget were very good with huge tax cuts. The expectation was that there would be more investment and more consumption. That assumption rested on a number of things, one of which was confidence in the future.
“The Constitution consultation process is one step that could restore that kind of confidence over the next several months, which would help us to create an environment where we could increase the level of investment in the country,” he said.
By Jyoti Pratibha (slightly amended)