Saturday, October 27, 2018

My Response to Biman Prasad's Attack on Bainimarama's Leadership, and Biman's response


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National Federation Party leader Dr Biman Prasad claims PM Bainimarama is guilty of overwhelming incompetence.

“He has totally shirked his pledge for the election campaign to be all about a battle of ideas. Instead he should have a public debate with me on why under his leadership for past 12 years there has been a stratospheric rise to the cost of living, deteriorating public health and medical services, mess in the
education system, almost 50 per cent decline in the sugar industry, almost total collapse of the dairy industry, ballooning debt levels, against a backdrop of exorbitantly high increases to salaries of the PM and Cabinet ministers.”

Bainimarama is not an economist. It would be better if Prasad debated with the Minister of Finance, Aiyaz Sayed-Khaiyum.


My quick check on the accusations
I'm no economist either and Biman will have better access to the data, and a better feeling for everyday conditions in Fiji than me. What follows is my best quick check and commentary on his accusations.

The cost of living. The COL index increased from 105 to 122 between 2014-18, partly due to higher import costs. It had a record low in 2013 and a record high in 2018. 

Several Government measures help to offset the increase. These include price controls, the exclusion of VAT on some food items; the removal of taxes for those earning under $30,000; lower caps on top personal and corporate tax rates; small increases in the  basic wage; land rents being paid directly to Taukei; free education from pre-school to secondary school, and low interest loans for tertiary studies;  subsidised electricity; free school and pensioner transport; free and low interest loans to some small businesses, and so on. 

An idea of other social spending may be gained from 2018 Budget allocations which included: self-help schemes $1.5m, free medicine $10m, rural housing assistance $1.4m, poverty benefit, child, pensions schemes, and food vouchers $38.7m. 

Deteriorating health services. Most people receive free basic health treatment.  Between 2005 and 2016 almost all causes of premature (and mainly lifestyle) deaths worsened (neonatal pre-term births were an exception) and the Fiji figures were worse than many other comparable countries, but its access to and quality of health care index improved, from 41 in 1990 to 47.9 in 2016.

Mess in education system. I can find no mention of any problems except that some schools have been criticized by Government for not introducing basic Taukei and Hindi. Biman would prefer classical Taukei and Hindi.

Decline in sugar production. The continuing decline in production is due to several factors including the 2016 cyclone, and 20,000 fewer cane farmers. Government has set a price of $85/tonne and allocated $62.3m to the industry in 2018. 

Collapse of dairying. The industry has long fell short of its potential and production has progressively decreased. How much of this Government can be held accountable for would be difficult to estimate but many cows have had to be culled due to TB in recent years. Current NZ aid and Government investment could see improvements.  An expected milk price increase from 94c to $1.10 should also help.

Ballooning debt. Government debt as a percentage of GDP  increased from 51.4% in 2008, peaking at 56.2% in 2010, before falling to 44% in 2017.  

However, the economy has grown in nine successive year, and 20,000 new jobs were created in 2016, mainly thanks to road and other infrastructure work.  Government claims its expenditure and debt levels are sustainable.


The Gross Domestic Product (GDP) in Fiji expanded 4.2 percent in 2017 from the previous year compared to 0.4 percent growth in 2016. The improved performance is underpinned by the public administration& defence; manufacturing; construction; wholesale & retail trade and the financial & insurance activities sectors. GDP Annual Growth Rate in Fiji averaged 2.59 percent from 1971 until 2016, reaching an all time high of 12.70 percent in 1973 and a record low of -6.40 percent in 1987.--www.tradingeconomics.com


Exorbitantly high sales for PM and Cabinet. With this,  I am in complete agreement with Biman, even before the recent increases. But not just for the PM and Cabinet.  Opposition leaders and all MPs also receive salaries far in excess of what one might expect in a country where wages are low and many people have no wage at all. 

The PM's basic salary in 2017 was $471,000; the Deputy PM $334,734, Cabinet $296,000 and MPs $179,719.

Comparing basic parliamentary salaries in Fiji with NZ, Bainimarama received 97.6 times more than those on a minimum wage and Adern 14.7 times more. Both received about 10 times more than the average salary (Fiji) and wage (NZ). 

Fiji's MP basic salary was 37.2 times more than the Fiji minimum wage, and NZ's MP 5.3 times.

For further comparison, a USP Professor on $140,000 earned nearly $40,000 less than an backbench MP.  Compare the typical years of training, qualifications, experience, and  responsibilities of an MP with those of a university professor -- and you can see why so many MPs want to stay in there. 

Biman is right but he should be campaigning to bring all parliamentary salaries down to reasonable levels. 

Two months ago PM Jacinda Adern froze NZ MPs salaries and announced a review of the pay-setting system. 

PM Voqere Bainimarama would do much for his reputation —and, I hope,  his conscience—  if he did the same — or better.

--ACW

I invited Biman to check out this post and respond. This is his reply:




Dear Croz,

Thanks. I agree with your general principles and ideals but the
reality in Fiji is different. 

I am saying this from my experience in parliament, budget 
implementation, dictatorship in governance, biased media, declining 
heath services, sugar industry, dairy industry etc and 
growth based on tourism and government expenditures, 
any government can borrow and grow.

In any case average growth from 2007-2016 was just 2.2%. 
Hardly anything to celebrate.

In any case I respect your opinion and if I have time I will 
write a longer piece. You may wish to refer to a series of opinion 
pieces I have written since 2014 and they are on our (NFP) website.

Kind regards
Biman 

4 comments:

Marc Edge said...

Croz, Biman has more brains in his little finger than you and Frank have put together.

Crosbie Walsh said...

Hi Marc, Good to see you're still alive and kicking, but thank goodness you don't have a medical degree-- brains in little fingers, indeed.

Unknown said...

It's called a metaphor, but you would need a brain to understand that. BTW, I hope you realize I have immortalized your propaganda efforts in the academic literature.

https://www.intellectbooks.co.uk/journals/view-Article,id=26131/

Anonymous said...

Deranged cyberstalker Marc Edge is back.
Everybody run!