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| The A-G and PM |
Today, we’re talking through our ongoing response to Cyclone Cody, the re-opening of schools, and some additional guidance on our COVID-safe measures (and later on the economy - Ed.).
But before we do, have an important update. This week, following a scheduled medical review in Melbourne, Australia, our Prime Minister was informed by his physician that he needed to undertake an urgent cardiovascular-related surgical procedure. He underwent that procedure yesterday morning and I’m happy to report that it was a great success. He’s now well on his way to recovery.
Per the doctor’s orders, this type of surgery takes weeks, at a minimum, to recover from. So, we expect to have our Prime Minister back at the helm of the nation –– fitter than ever –– by the end of the next month.
I’ll take any questions you have after this announcement, but out of respect for his privacy and that of his family, and the need for the Hon Prime Minister to focus on his health, I’d ask we keep ourselves focussed on the day’s pressing business.
TC Cody Response
Our economic recovery, which began in earnest at the start of December, could not have come soon enough as resurging Government revenues are helping us mount a decisive response to the arrival of TC Cody.
Most floodwaters have now subsided and initial damage assessments are well underway. Our Minister for Rural, Maritime Development and Disaster Management and Minister for Defence, National Security and Policing is in the North as we speak leading our response on the ground. And all our other Minister's have been on the ground also.
In total, we’ve distributed nearly 1,000 food packs to families in need through NDMO. In addition, the Ministry of Economy re-activated our food pack distribution to individuals in flood-affected regions who are completing periods of self-isolation due to a positive COVID-19 diagnosis or COVID-like symptoms.
Power or electricity has been completely restored in the Northern and Central Divisions with urgent work underway to get power back online for the remaining areas of at least 1 per cent, in the Western Division. So, the Western Division is 99 per cent up.
Water is restored mostly everywhere, save the Western Division, which has 95% of services restored. Our WAF engineers are at work clearing blockages to restore water throughout the West. As of 13 of January, all major roads have been re-opened to motorists. Of course, there are certain low-level crossings that still have water inundation.
It is clear by every measure that the 14 cyclones we have experienced as a nation since 2016 are not the same storms our grandparents endured.
Climate change is warming the world, it is warming our oceans. And those warmer waters give these storms more energy, making them more severe, as they carry more rain and create more flooding, and that is why we must treat warnings of severe weather more seriously than we ever have. The science behind that phenomena is indisputable.
It’s not only testing human-made infrastructure but the barriers built by nature. For example, recent flooding in Nadi was mainly a result of the bursting of the riverbank –– not because of any drainage issues as some have claimed. Of course, we have to adapt regardless, and we are.
But these are unprecedented storms brought by the unprecedented warming of the world. Building resilience takes energy, focus, and resources –– all of which we are dedicating.
As we brace for more severe weather this cyclone season, there will likely be other temporary service disruptions. Our engineering teams from EFL, FRA, and WAF are among the first to hit the ground as soon as the weather clears and they will put in whatever hours are necessary and go wherever is necessary to restore any services that are disrupted, as they’ve done through the past 13 cyclones that have struck us before Cody.
All they ask for in return is our patience. And I would like to thank all of these front-liners for their dedication to the nation and to the wellbeing of their fellow Fijians during this crisis.
Support for farmers
TC Cody was a wet storm but not an especially windy one. We saw some limited structural damage to infrastructure, but no serious damage to the schools that we rebuilt to cyclone-resilient standards after TC Winston. However, the flooding has been very tough on our farmers. Many of their fields have been inundated and their crops and livestock have been washed away. Our immediate priority is to help them grow back better to feed families here in Fiji and strengthen our agricultural exports -- all of which strengthens our farmer's bottom line.
Through the fast-deploying cash for farmers programme, we will provide $250 cash to all cyclone-affected farming households for land preparation, cultivation and procurement of planting materials. Our estimates show we have 20,000 households that will qualify, so we've allocated five million dollars for this purpose.
To apply for assistance, you must be a full-time farmer, your farm must fall in the cyclone path of Cody, and at least 30% of your crops or 10% of your livestock must have sustained damage.
For all Bilateral Quarantine Arrangement registered farmers, we will also provide seedling and fertiliser packages valued at $176.
And in recognition of the importance of local and community-based food security, we are announcing a new Grow from Home programme that will distribute 20,000 Home Gardening seed packages to households in Fiji at a cost to the government of $300,000. We'll publish details on how to apply to receive your household seed pack on the Fijian Government Facebook page. Application information will also go out through the Ministry of Agriculture.
The pandemic and the worsening climate crisis are both serious threats to the global food supply. We've seen that for ourselves in Fiji as have billions of people around the world. So, we very much encourage families to take advantage of this Grow From Home programme, start a garden, grow some of your food, and help strengthen our national food and nutrition security from the grassroots up.
In addition to the Grow From Home programme, we'll be supplying an additional 20,000 farmers with $25 packages of dry seeds at a cost of $500,000.
We're keeping a close eye on a new weather system developing to the southwest of the Fiji Group. We don’t expect another cyclone to form, but we do expect more wet weather, so let's remind ourselves of what's necessary to stay safe:
- Stay out of the floodwaters, don't let children swim in them, and never risk crossing them.
- Use this time to shutter your homes and prepare your emergency kits.
- Move livestock to higher ground.
- If you are ordered to evacuate -- or feel that you should -- please move to an evacuation centre in daylight hours. We have well-rehearsed protocols to ensure these facilities are COVID safe.
The latest weather forecasts and advice will be put out on television, radio and on the Fijian Government social media pages. Please stay safe.
Re-opening of schools
Our schools were closed this past week and they will stay closed until we're sure the impacts of the eruption, in Tonga, have cleared our waters as we may need to be re-activate some of them as evacuation centres.
But let us also be clear, we plan to re-open our schools for Years 8 - 13 once the weather situation clears up.
Over the past eight months that our schools were closed, more than 200,000 children in Fiji lost more than 1,000 hours of in-person learning each. That is 200 million hours of lost in-person learning and we cannot afford many more. Supported by our clear COVID protocols for classroom safety, developed with UNICEF and the WHO, the date for the reopening of schools for all the students will be announced once all evacuation centres are cleared and the warning on tsunamis and severe weather are lifted.
Other Covid safe measures
As announced last week, we've stepped up fines for violations of our COVID safe measures and included a new restriction on social gatherings.
We understand the impact that the social gathering restriction has had for everyone, especially for weddings and other special occasions which we all wish to share with friends and family. But we've implemented this temporary, necessary measure to slow the spread of highly-transmissible Omicron variant in spaces that we cannot effectively regulate.
We are not announcing any additional health measures today. But we do have some additional guidance to announce on our informal social gathering restriction. Specifically, on how venues can become Care Fiji Certified so that they may host events at 80 per cent capacity.
We have two sets of protocols to announce.
Independent Event Halls and Hire Venues
The first are the Protocols for Independent Event Halls and Hire Venues, which apply to halls seeking to host events at 80% capacity.
The basic provisions remain intact. We are not introducing anything outside of the COVID safe measures that we've continuously emphasised, such as masking up, 2-metre physical distancing, habitual sanitising, and proper ventilation.
Enforcement and adherence to these protocols will need to be signed off in order to obtain a Permit to Operate.
Venue operators can apply for 'Permit to Operate for Independent Event Halls and Hire Venues' on www.covidpass.mcttt.gov.fj. We’ll publish that website on the Fijian Government Facebook page in case you did not write that down.
Those venues which have been approved can host events, including weddings and other functions, at 80 per cent capacity as houses of worship, restaurants, hotels and resorts currently do.
The Ministry of Commerce, Trade, Tourism and Transport, Fijian Competition and Consumer Commission, Fiji Police Force and Ministry of Health and Medical and Services are serving as our COVID Safe Ambassadors (CSA). The CSAs are out there guiding and where necessary, issuing penalties whenever there is a breach of the protocols.
Covid Safe Operations for Outdoor Events
Fijians who want to host events outside in an open-air environment, like in a shed on a village greens or in their compound, for example, to host a wedding, funeral or birthday, must ensure they are compliant with all COVID-safe measures.
You do not need a permit or any specific certification to host these events, but you need to make sure that:
(i) the event is at 80 per cent capacity of the outdoor venue;
(ii) everyone must wear a face covering at all times unless eating;
(iii) everyone maintains 2-metre distance;
(iv) there is no dancing, except by the members of a hired dance group or live band;
(v) strictly no sharing of utensils;
(vi) keep sanitisers or handwashing facility for guests, and
(vii) a register of all the guests with name and contact details is kept.
Remember the protocols and measures are in place for a reason - to protect you and your loved ones, whilst allowing you to have some semblance of a normal life.
Should you breach any of the protocols, we will cancel your event or order the immediate closure of your function. And we will be randomly checking on these venues and events to ensure compliance.
So, to be clear, indoor events in venues with four walls with more than 20 people need a permit. Outdoor events do not need a permit, but the organisers must enforce COVID-safe measures or they will be shut down.
Economic recovery
To wrap things up, I want to update everyone on where we stand on our economic recovery.
We suffered a serious pandemic-driven blow in 2020 with the largest economic contraction ever of 15.2 per cent.
The Macroeconomic Committee recently released the revised economic growth numbers with a double-digit growth projected for this year. This may be the highest ever growth experienced in Fiji's history. This turnaround has been only possible after our concerted to secure the vaccines, effectively rollout those vaccines, and reopen our borders and the economy.
Economic Growth (Latest projections by Macro Committee)
2019 - minus 0.4 percent
2020 - Minus 15.2 per cent (largest contraction)
2021 - minus 4.1 per cent contraction
2022 - 11.3 per cent growth (Potentially highest ever growth).
2023 - 8.5 per cent growth
2024 - 7.7 per cent growth
Foreign Reserves
At end of 2021, foreign reserves stood at $3.2 billion equivalent to 9.9 months of import cover. This is the first major crisis during which we have not had a balance of payments (foreign exchange) problem or a devaluation. We entered the crisis with strong foreign exchange holdings and managed to maintain a strong reserves position during the crisis.
This is despite the closure of our largest foreign exchange earner, tourism, which brings in about $2 billion annually. That's why Government also borrowed from external sources like ADB, World Bank, AIIB, JICA and sourced budget support grants from Australia and New Zealand. Had Government not borrowed externally there would have been a very high risk of a devaluation. Imagine a devaluation during this crisis. We avoided it. The Reserves outlook is also comfortable.
Liquidity
At the end of 2021, liquidity stood at almost $2.0 billion. The high foreign reserves supported by the external Government borrowings helped increase liquidity which has played a key role in supporting a low-interest-rate environment which is critical for economic recovery. Imagine major spikes in interest rate. We carefully navigated these headwinds and thankfully calmer seas now lie ahead.
Government Debt
Debt to GDP ratio rose from 53.3 per cent in 2006 to 56.2 per cent in 2010. Following this, the debt to GDP ratio was on a steady downward path declining to 43.5 per cent in FY2016-2017. This was a decline of close to 13 percentage points in just over six years.
Our commitment to fiscal prudence was clear. Then we had TC Winston and the many other natural disasters that required additional borrowing with the debt to GDP ratio rising to 48.4 per cent in FY2018-2019 (still below the 50 per cent of GDP mark).
Fast forward to the COVID-19 pandemic. Tax revenues fell by 50 per cent on average every month (12-month loss of over $1.4 billion). The Economy experienced the largest ever contraction of 15.2 per cent in 2020, the loss of GDP equivalent to almost $2 billion. The Government had to increase its borrowings to sustain public expenditures and provide over $500 million in unemployment support and other relief measures. This lead to an increase in the level of debt.
Apart from the increased borrowing, the decline in nominal GDP induced a sharp increase in the debt to GDP ratio. For FY2020-2021, the debt to GDP ratio would have been 14.4 per cent lower if we assume nominal GDP remained at 2018/2019 levels (pre-COVID) See table 2. Therefore, once the economy recovers to pre-COVID levels, debt to GDP levels will fall.
The alternative of not borrowing and supporting the economy during the last 20 months would have meant the economic decline would have been much severe (thus a much lower nominal GDP) and our debt to GDP ratio would have in a been far worse position. This is apart from the devastating impact we would have seen on the socio-economic front. It is clear that the countercyclical stance to support the economy with additional debt was appropriate and this is why our multilateral partners supported Fiji with additional external debt during this period. The alternative was mass destitution in Fiji. We avoided that. Our critic's short-sighted suggestions would have let that socioeconomic crisis unfold unabated.
Our largest foreign exchange earner tourism brings in about $2 billion in foreign exchange earnings annually. With tourism earnings almost completely shut down for 18 months we ran a high risk of a large devaluation if the Government had not sourced the external debt and budget support from the multilateral and bilateral partners and secured the foreign investment in Energy Fiji Limited. A devaluation in the middle of a crisis would have meant more uncertainty and would have made the crisis worse with many more severe socio-economic challenges.
Government securing the external funds (borrowings, budget support and EFL divestment) not only supported foreign reserves but helped increase the liquidity in the domestic market which in turn reduced our interest costs on domestic borrowings. It also helped keep the interest rate environment low which is critical for economic recovery.
We secured over $700 million in highly concessional finance tagged to policy reforms with long-lasting impact.
Income support to unemployed and vulnerable
Throughout the pandemic, we provided almost $500 million of which $430 million was in direct income support and other relief measures of about $70 million. These included things like subsidies, electricity, water, access to GP, food ration, payment of market vendors fees, fishing license fees and other daily expenses.
We started with the formal sector through FNPF and later extended the support to the informal sector. The fight was a long one -- at many points, we had no idea how long it would last -- so we had to ensure that the payout was sustainable. We stepped up efficiency in a big way by adopting a digital application and payout system. Applications were processed in less than three minutes and disbursement followed immediately after. We want to thank everyone who adopted these digital tools -- we know it wasn't what all of you were used to. But because you did, we were able to distribute payments quickly and ride out a tough two years together.
Source: Attorney-General and Minister for Economy speaking notes - 15 January 2022. Official Fiji Government Release.
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