Minister for Economy and Attorney General, Aiyaz Sayed-Khaiyum says Fiji, and other small island developing states across the world, are bracing themselves for an economic impact that could well exceed a severe tropical hurricane, such as Cyclone Winston which struck Fiji in 2016 and wiped out one-third of our gross domestic product in just 36 hours.
As global supply chains and shipping routes are affected, and tourism and travel-related industries face unprecedented challenges due to COVID-19, the contractions across all developing economies will be measured in more than job losses or percentage points shaved from our growth.
In an article on the Financial Times, Sayed-Khaiyum wrote that as resources run out, the work done to achieve sustainable development goals also risks unravelling — be that curbing climate change to keeping our people healthy, or indeed every benchmark of the United Nations 2030 agenda.
Sayed-Khaiyum says while Fiji may not see millions of tourists, like Australia and New Zealand, our 850,000 annual visitors contribute up to 38 per cent of gross domestic product.
He says tourism revenues help fund critical infrastructure projects; a 10 per cent environmental and climate adaptation levy on the rum punch you drink at a Fijian resort helps fund the reconstruction of schools destroyed by tropical cyclones.
But as Fiji closes its borders to some countries, and other nations impose restrictions on their returning citizens, that once-reliable income will dissipate.
Sayed-Khaiyum says whether they are cleaning staff, taxi drivers, restaurant workers, security guards, artisans, market vendors, farmers, or our famous fire-walkers, Fijians will feel the economic crunch intensely. He says teleworking simply isn’t an option if your job is walking across hot coals.
The Attorney General says that furthermore, the privileges that developed nations can afford for many of their citizens aren’t limited to working from home.
He says national airline carriers and cruise lines from wealthier countries are already indicating that they will need financial lifelines.
Sayed-Khaiyum says developing economies do not have the luxury of high fiscal reserves to bail out industries, pump trillions of dollars into our markets, or offer citizens large-scale economic packages. He says Qantas could be propped up by the Australian government, but Fiji Airways will need to find radically new ways to adapt — as will developing nations across the world.
Sayed-Khaiyum says the world economy pulled itself out of the global financial crisis in 2008 through an unprecedented, internationally co-ordinated effort to re-spark global growth, with crisis lending in 2009 essentially doubling from pre-recession levels. He says we have yet to see the same level of multilateralism in response to the financial and commercial challenges stemming from coronavirus.
He says nations are operating in silos rather than in solidarity. And he says without a cohesive global response, developing economies will suffer the most.
Sayed-Khaiyum says emergency measures must inject crisis funding into vulnerable economies. He says budgetary support and affordable finance at recession-halting scales are essential to preserve the market forces that underpin the global economy.
Fiji is preparing a Covid-19 budget to fund vast preparatory measures.
Sayed-Khaiyum writes that fortunately, we can afford to take some of these countermeasures from a position of relative financial strength. But multilateral approaches must match our urgency and creativity to ensure the viability of many developing nations.
He says if multilateral development banks withhold support until the virus strikes small island states, they will leave us exposed.
Sayed-Khaiyum says with the worst yet to come, every day of delay risks robbing the world of a sustainable future.
Stay tuned for the latest news on our radio stations
