#header-inner img {margin: 0 auto !important; #header-inner {text-align: Center ;} Fiji Coupfourpointfive: 2010-11-28

Friday, December 3, 2010

FDFM: 'Regime does not have resources to arrest and detail 10 or 20 thousand people'

Australia's Democracy Movement is citing the military blow-out as a major example of why the self-appointed Bainimarama government cannot continue to run Fiji.

In an email promoting the Save Fiji Movement march at Sukuna Park in Suva next Friday, the Sydney-based group says the military will have busted its annual budget by $700,000,000 if it's allowed to continue until 2014.

Quoting the work of Dr Nadan Warsey of the University of the South Pacific, it says his calculations reveal the huge cost the country is paying for military rule.

"That is $700 million for unproductive periodically coup conducting soldiers. Which means $700 million less for education, health, social welfare, poverty alleviation, and national infrastructure development – not to mention the enormous damage done to the national economy."

Two protest marches are now planned in the next two weeks for people to rally against the self-appointed government of Bainimarama. 

The first is in Sydney and planned for this Sunday (December 5) to co-incide with the fourth anniversary of Bainimarama's December 6 coup.  

The second is scheduled for next Friday (December 10), noon at Sukuna Park in Suva.

The email from FDFM urges people to spread the news about the marches and to attend: "....Come let us all march together in Suva on Friday, 10th of December. Remember the regime do not have the resources to arrest and detail 10 or 20 thousand people."

Second march aimed at ousting Baini announced

A second march aimed at showing the discontent of Fiji people against the self-appointed military government has been announced this morning.

The march is being organised by the Fiji Democracy and Freedom Movement in Australia and is scheduled for this Sunday (December the 5th) in Sydney to coincide with the fourth anniversary of the December 6 coup.

Yesterday, a frontman for Save Fiji Movement revealed the group is organising a march for next Friday in Suva, aimed at delivering a petition to the illegally appointed president, Epeli Nailatikau, urging him to dismantle the Bainimarama regime.

In a statement, the Fiji Democracy Movement says it wants members of the public who are concerned about what is happening in Fiji to join the Fijian Community in the protest march.

It says the people of Fiji are fed up with the lies and failure of Commodore Bainimarama and his illegal government.

Quote:..."Given that he has lost most of his supporters since 2006, Commodore Bainimarama should do the honourable thing and hand the power over to a civilian caretaker government that will take the nation to general election."

The freedom movement says since 2006 lives have been lost and thousands have been beaten by security forces. "Basic human rights has been removed and given the gagged media since April last year, people have been suffering in silence."

The statement goes on to say: "The illegal regime’s report card, after four years, does not reveal any hope that they are capable of governing. According to a report by Professor Wadan Narsey of the University of the South Pacific this week, since December 2006:

a) investment level has dropped 15%
b) National savings has also dropped dramatically
c) There has been negative economic growth every year since 2007
d) They have aimed to reign in fiscal debt and public debt but, as a matter of fact, they have been increasing it consistently with military budget blow outs and increases in national budget allocations since 2007
e) The Military has again received the lions shares proposed for next year’s budget with a further $8 million increase to purchase new weapons
f) Inflation has shot through the roof with a 20% and will further increase with the proposed 2.5% VAT increase next year
g) And unemployment and poverty is a major issue with 70% of those living in poverty are rural dwellers and it now stands at 38% of the population.

The freedom movement says it's believed the cost of the coup since 2006 is at least $2,000 million plus.

"The illegal reign of Commodore Bainimarama and his cronies has been a total failure and we are asking everyone out there with any sense of human rights, justice and human dignity to come join with the Sydney Fijian Community in protest this Sunday."

Thursday, December 2, 2010

Bainimarama's Kaba looming as Nailatikau statesmanship set to be tested

By Jone Baledrokadroka

Emperor Napoleon met his defeat at Waterloo. The victory of the Duke of Wellington and Prussian forces at this decisive battle heralded the end to the tyrant's rule.
In Fiji, the victory of Christian forces at the battle of Kaba can be said to mirror the battle of Waterloo in the course of history. Both 19th Century battles shaped modern politics in Fiji and the western world, respectively.

At Kaba in 1855, King George of Tonga’s forces aided the vunivalu of Bau Ratu Seru Cakobau’s forces and soundly defeated rebels sending the rest fleeing through the mangroves.

A modern Kaba type showdown is looming. History repeating itself. As at the battle of Kaba, once close allies have bizarrely aligned their forces against each other in the past week. Unfortunately, for Fiji more instability seems to be on the horizon and have been heard in recent days from within the regime.

The old Tonga-Baun elite have again aligned against the sick ‘Napoleon’ from across the Kaba point in Kiuva and his core of military officers and brain, Aiyaz Khaiyum, struggle for power that began with Police Commissioner Esala Teleni’s resignation and the taking of ‘leave’ of Lt Col Rokolui Mara and Brigadier Pita Driti is coming to a head. 

The split in military ranks in the past week have been shown with an $8 million military budget increase going $6.1 million to the Navy and $1.9 million to the Army.
Some have, judging by the direction of the wind, changed tack, Ratu Epeli Ganilau of note. Perhaps blood is thicker than his best mate and dictator’s promises it seems. 

Soldiers from Naitasiri and Tailevu – the last traditional warrior resort of old - have been bought off by promotions to prop up the ailing dictator and his crumbling regime.

President Ratu Epeli Nailatikau, like his great ancestors at the battle of Kaba, literally has the future of Fiji in the palm of his right hand. His chiefly royal blood, military forbearance and hopefully statesmanship will be tested over the coming week.

The big question then is, will our ailing dictator meet his Waterloo by Christmas? Or to paraphrase, will he meet his Kaba before Kirisimasi namaki?

Ironically, with history being made by Tonga’s first  liberal democratic elections this week, an iliberal zombie of a nation will be hoping the Tonga-Baun alliance  prevails.

An old alliance that gave Fiji, Christmas may well shepherd the nation back to democracy.

Email: Save Fiji Movement planning march and petition to oust military government

A group calling itself Save Fiji Movement says it's organising a nationwide march aimed at getting the president to dismantle the self-appointed government of Frank Bainimarama.

The group says the march will be held next Friday (December 10) and will end with a petition to the president, Epeli Nailatikau.

An email from the group says marchers will ask Nailatikau (above) to appoint a new commander, set a time for elections, address the financial crisis and appoint an interim government.

The march is planned for Sukuna Park in Suva at noon.

The email says "this move will go on regardless of any
threat. We have solid backing of “voices of people of Fiji”.

It says those involved "have passed today that this march will unseat Frank
and break the army apart and president will have “to listen."

"This march will be for everyone even army and police officers to save the country from going down the drain and for our children."

The group has not identified who is behind it or who its supporters are.

More fall out over Budget

They were once suckers of the illegal regime. One was protecting the back of other. Now, they can't agree on the 2011 Budget. The illegal A-G Aiyaz sayed Khaiyum, who delivered the Budget in his capacity as acting Finance Minister while the dictator was undergoing medical treatment in China, has lashed out at his former treasonous partner in crime and dictator's interim Finance Minister Mahendra Chaudhry.
Khaiyum has dismissed statements by Chaudhry that the increase in Value Added Tax in the budget last week is a devastating blow to the poor, and the low and medium income earners.

Chaudhry also told New Zealand media that once again people are being made to pay the price for indiscriminate government borrowings.

Khaiyum said the statements are misguided as there are record targeted assistance programs for the unfortunate in the budget.

He also said that people should not forget the 9 percent reduction in the prices of many food items through the Commerce Commission price determination.

He said the fundamentals of the economy and financial systems are now being put right.

Khaiyum believes the political parties like the Fiji Labour Party are just trying to use the issue as a political point scoring exercise.

Chaudhry wants passport and access to Aussie bank accounts

CHAUDHRY: FijiLive pic
The DDP's Office is asking the High Court to make sure Mahendra Chaudhry can't access funds kept in his Australian accounts if he's granted permission to travel to Australia.

Fiji media say Chaudhry has asked the court to allow him to have his passport so he can travel to Australia for medical treatment.

DPP lawyer Ana Tuiketei has not opposed the application for Chaudhry to travel but says the Fiji Court needs to make sure the Fiji Labour Party leader can't access the funds kept in his Sydney accounts, because they are subject to the charges and on-going investigations.

Tuiketei also argued the former Prime MInister is not entitled to unconditional bail because he needs to be treated like any other accused persons.

Chaudhry's defence lawyer and son, Rajendra Chaudhry, cliamed the bail act allows an accused to access funds for various reasons. According to FijiVillage he also said his client will need to access the funds to pay his medical bills.

He gave an assurance that the monies to be used will be for travel, medical bills and other expenses within reasonable bounds and his client will not tamper with the funds as alleged.
High Court Judge Justice Daniel Goundar also questioned Rajendra Chaudhry why his client's passport should be permanently released to him.

He questioned on how the court can guarantee that someone prominent, with power and money will not abscond.

Rajendra Chaudhry argued that this could lead to the presumption that prominent people are treated differently when it comes to bail conditions. 

Judge Goundar is expected to make a ruling next Monday.-source Fiji Village and FijiLive

2011 Budget Oscars: burdening future generations

By Professor Wadan Narsey
Another year, another illegal Acting Minister of Finance presenting Budget Estimates for 2011 stating “as approved by the Fiji government”.

Without a Parliament, this is now the only reporting exercise to the Fiji taxpayers, who will fork out $1746 million to fund Bainimarama’s plans for 2011.

As always, the media and taxpayers only think about the little bits taken from them in taxes, and the little bits given here and there in benefits, and strange reversals in economic policies such as protectionism.
They can rarely look at the long-term Big Picture that annual budgets add up to (and it does not help that articles like this can never get past the censors in local media).

Unfortunately also, regardless of the alleged principles of accountability preached  by the Charter, this military government will not release the Auditor-General’s Reports on how our tax money was spent in the past, or those Reports explaining why $300 million more of our tax money will be pumped into propping up the Fiji Sugar Corporation; or the Reports on the hundreds of millions lost at Natadola and Momi due to this military government’s actions.

Not that any one from the business community and the accounting and auditing firms would be asking such pesky questions of this military government.

Neither would they be asking the Acting Finance Minister,  Aiyaz Khaiyum, to explain why his extravagant claims about the macro objectives of the Bainimarama government, is totally contradicted by the numbers given in his own 2011 Budget Supplement.

If the 2011 Budget Supplement numbers are correct, then the following will be the Record Card for the Bainimarama government over the last four years.

The Bainimarama Record Card
Judge this military government by its own key macro-economic targets, stated clearly in their 2011 Budget Supplement (paragraph 3.3, page 18):
*    Raising investment levels to 25 percent of GDP. (FAIL)
*    Growing the economy by 5 percent annually; (FAIL)
*    Reducing the rate of poverty to a negligible level; (FAIL)
*    Reducing fiscal deficits; (FAIL) (opposite being done)
*    Reducing Government debt; (FAIL) (opposite being done)
*    Maintaining inflation at around 2-3 percent on average; (FAIL) (inevitably)
*    Maintaining foreign exchange reserves at 4-5 months of import cover; (C grade)

Despite having complete control of Fiji for the last four years, the Bainimarama government has utterly failed to achieve any of their own first six targets.   They are not likely to achieve them either over the next four years.  For some targets, they are blatantly and dangerously doing the opposite.

Investment as % of GDP
Fiji budget

Look at Graph 1.  Investment had risen briefly to 25 percent in 1999, but the 2000 coup by soldiers reversed that trend, with another dive taking place after 2006.  In 2010 it is almost certainly 15 percent or less.
All the indicators (building permits approved, savings ratios, etc) indicate that this ratio will not rise given that investor confidence is at an all-time low.

Most people hardly ever see the statistics behind Graph 2 on the right – National Savings as percentage of GDP (estimated by the World Bank, but not by Fiji). National Savings is roughly National Income minus Consumption – Net Outflows.

One can see the decline setting in after 1987, then again after 2000. For the first time in the history of Fiji, this ratio became negative over 2007 and 2008, probably because of capital flight by locals,  foreigners and potential investors, over fear of impending devaluation.  Graph 1 in fact follows the trends shown by Graph 2.

Fiji budget graph 2 

Such capital flights (by foreigners and locals alike) and loss of investor confidence are encouraged by military decrees appropriating assets, military decrees preventing aggrieved persons from taking their cases to court, expulsion of CEOs of large corporations, deportation of newspaper editors, and imposition of draconian media censorship.  In such a climate you are unlikely to see investment rise to 25 percent of GDP.

It is to be expected that that large corporations will try to avoid taxes by whatever means available (including transfer pricing), while waging strong PR campaigns to win public sympathy.  But the solution for illegal activities must surely be through legal redress.  The solution for more equitable tax payments from a vitally important export company, is surely negotiation in good faith. Not expulsion of CEOs or large, sudden and discriminatory increases in resource taxes.

Negative economic growth
The 2011 Budget documents confirm what most of us have been fearing- that the growth rate for 2010 is going to be (now estimated to be 0.1 percent) far below the optimistic rates being projected by the Reserve Bank.

Fiji budget Graph 3 

Graph 3 shows clearly what has happened since 2006 when Bainimarama took over. The top straight line represents what a modest 2.2 percent growth would have given us between 2006 and 2010. The black line is what the Bainimarama government has actually achieved for us: the GDP in 2010 was even lower than in 2006.

The ever-widening gap represents a loss in national income of over $1,250 million in real 2005 terms (and more in current dollars), with a corresponding loss of potential government revenue and expenditure of more than $300 million.

Having lost the tax-payers these huge amounts, the Bainimarama government pats itself on the back (with the jovial support of business tycoons) for $10 million given out for food vouchers and $12 million for bus fare subsidies.

Let us not talk about the impact on poverty, or Father Kevin Barr’s long-postponed Wages Councils Orders following underhand pressures by employers.

Fiscal Deficits and Public Debt: Lies?
Fiji budget graph 4

Possibly the biggest and most damaging con-trick that this Military Government is pulling on Fiji’s tax-payers is the continuing claim that it is planning to reduce Fiscal Deficits and the Public Debt.

On the contrary, the numbers in the 2011 Budget Supplement show that fiscal deficits have remained large (ie this Military Government keeps spending more than it receives in revenue).  Consequently, the Public Debt has risen from 2006 to 2010 by a massive $515 million.

Worse still, the Budget Supplement numbers clearly show (Table 3.1, page 19) that this military government is planning to further increase the public debt between 2010 and 2013 by another $576 million.  That is, by 2013, they will have increased the Public Debt by more than a billion dollars (see Graph 4).

This is a billion dollars that this illegal and irresponsible m ilitary Government wants to pass on to the future generation, to pay for their mistakes of today.

We remember that the Qarase Government also expanded the Public Debt between 2000 and 2006 by more than a billion dollars- some on infrastructure, but the rest to cover their Agricultural Scam, the over-generous vote-buying Public Service salary increases just before the 2006 elections, and also the military over-expenditure (more on this below).

But their saving grace was that the economy was still growing. Under Bainimarama, the economy is not growing.

Another worry for many of us is that the Military Government will even further raid the Fiji National Provident Fund, who is their captive banker and milking cow, with the board and CEO totally under their control.  

Should the Fiji economy not grow and government not repay its loans, the FNPF will become further insolvent.
Taxpayers of Fiji: note that for next year, the Budget Supplement states that you will be paying $789 million for Debt Service- this is a half of all Government Revenue.

It is no wonder than Education and Health cannot be given the increases that their ministries need and deserve (however much their ministers smile on TV and say they will manage).

Put another way, by 2013, each household in Fiji will effectively be struggling to pay for  its $20,000 share of the Public Debt, planned by this military government.
So what is the Bainimarama Government’s increase in Public Debt due to?

Monstrous Military Over-expenditure
It is confirmed now that a large chunk of the increase ($300 million)  is going to pay for the Fiji Sugar Corporation losses and “mill refit” fiasco by Bainimarama’s appointees.

But the most important increases in Public Debt are due to the continuing massive inflation and illegal over-expenditure of the military budget.

With the convenient excuse of an attempted coup (by its own soldiers), the Fiji Military Forces has been illegally over-spending the budget approved by Parliament every year since 2000- in millions: 19m, 8m, 20m, 32m, 14m, 24m, 50m (in 2007), 8m, 28m, and 24m (in 2010).
Roughly, between 2000 and 2010, the military has illegally over-spent by some $225 million– this is as much as the cost of the National Bank of Fiji disaster. All added to Fiji’s Public Debt, to be paid for by the future generations.

But the real change in military expenditure has been worse than that.  Before 2000, the military expenditure was only around $50 million.  It was only following the attempted military coup in 2000 that the Qarase Government increased the military’s budget by another ten to twenty million dollars – to contain the problems of the military’s own making.

Qarase never thought those same guns would be turned on him. So compared to the pre-2000 military budget of around $50 million, the inflation of military spending between 2000 and 2010 has cost the Fiji tax-payers roughly an extra $450 million. All added to the Public Debt.

If the current trend continues till 2014 (and the 2011 Budget indicates that it will), the military will have taken another extra $250 million from the tax-payers and added it to the Public Debt.  Or some $700 millions over and above their normal pre-2000 allocations, between 2000 and 2014.

Add or subtract a few tens of millions here and there, or allow for price changes, the picture will not change.
This $700 million more for unproductive armed soldiers in uniforms periodically conducting coups, means $700 million less for education, health, social welfare, poverty alleviation, and rural development- not to mention the massive  damage done to the economy.

Given this massive ongoing misallocation of tax-payers’ money, who cares about a few million peanuts of tax-payers’ money that this Bainimarama government is throwing at food vouchers and children’s bus fare subsidies in the 2011 Budget?

Who will pay?
Most of the Pubic Debt is being passed on to your children. But there is also the large increase in VAT from 12.5 percent to 15 percent., expected to raise $80 million.  We all know the VAT to be a regressive tax, whose burden falls more heavily on the low and middle income people who usually spend a  higher proportion of their incomes.

Which is why even Father Barr, a once avid supporter of the Bainimarama government is now complaining about the increase in VAT, as he also complains about the failure of the military government to implement his Wages Councils.

This illegal military government is also planning to sell off public assets like FEA, to try to stop the Fiscal Deficits exploding further. 

Just as the SVT government’s then Minister of Finance, Jim Ah Koy, disastrously did with the creation and sale of ATH shares in 1998, this military government will also thereby convert a public monopoly into a private monopoly, which will rip off even more, the helpless consumers, despite the best efforts of the bumbling Commerce Commission.

The IMF Excuse
How odd that this military government chooses to justify their VAT increase and sale of public assets by referring to IMF Mission advice.  This military government will also use the IMF excuse when they start sacking more public sector employees (in addition to all those over 55 laid off recently).

But the military government ignores that they could not fulfill the complete set of IMF requirements for a Standby Arrangement. We in Fiji should also understand that the experience of the developing world is that the unaccountable, non-transparent, ever-changing IMF missionaries couldn’t give tuppence for the lives of the ordinary people they trifle with.

There is no public indication that the IMF recommended that Fiji’s military expenditure must be significantly reduced to pre-2006 levels if the Fiscal Deficits and Public Debt are to be reduced to sustainable levels; nor that any burden of adjustment should be shared by the upper income brackets as well through the income tax, and not just through a VAT increase which will hurt the poorest more.

The IMF’s key concerns have always been about facilitating and strengthening the private sector, if necessary by privatising and downsizing public corporations.  For the amoral IMF missionaries, a dictatorial military government provides a grand opportunity to bring about changes not easily possible through elected accountable governments.

We should remember also that an “IMF Mission to Fiji” is a “not to be missed opportunity” for a bloated 8-person team to have a lovely few days in a tropical paradise, away from freezing Washington or far more unpleasant African banana republics which usually receive IMF attention.

Inflation and Cost of Living
This military government’s claim that they will contain inflation, is equally hollow.  Fiji’s inflation is largely imported, totally beyond the control of the government or the Commerce Commission.

Indeed, the recent Reserve Bank devaluation of the Fiji dollar boosted inflation beyond the alleged 3 percent target, while the planned 20 percent increase in VAT will add even more.

The cost of living for everyone will go up, regardless of the sporadic and generally futile Commerce Commission price controls on a limited number of items (not sold by a certain tycoon).

Father Barr’s poorest workers are certainly not going to get timely Cost of Living adjustments through the Wages Council. And the FNPF and other savings of the ordinary people will keep going down the drain, continuously eroded by the inflation, while unable to grow because of the continuing economic stagnation and lack of employment creation.

So taxpayers and coup collaborators need to honestly ask themselves: who have really profited from the 2000 and 2006 military coups?

Benefits for the Military
It is ironic that there is such hatred on the blog sites directed against Aiyaz Khaiyum who is strangely accused of implementing some kind of Taliban “Sunset Clause” on the Fijian race, and of manipulating a pliant Bainimarama.   This frequently racist blogging took another turn with Khaiyum’s presentation of the budget, on behalf of an absent sick Bainimarama.

Of course, Khaiyum invites such criticism with his egotistical “in-your-face” daily prominence in the media, his obvious enjoyment of power and authority over so many powerful ministries, and the steady stream of salusalus and adulation from the pliant business community (as long as their business interests are served, who cares if the rest of the country goes down the drain?).

But let us face it:  Khaiyum (like Parmesh Chand and Jonhn Samy) is merely in the service of Bainimarama and the Fiji Military Council, very smoothly and suavely doing their dirty work.  Indeed his performance on TV is a “revelation of sorts” even to those of us who shared a cell with him protesting the Rabuka coups  more than 20 years ago.

Of course, Khaiyum and his coup collaborating cobbers from NZ may be enjoying considerable financial benefits themselves, as others have in the past, and gone today.
But, in dollar terms, the biggest ongoing 2000 and 2006 coup beneficiaries of tax-payers funds, have been Bainimarama and his senior military officers, some of the former FMF Commanders, and the military rank and file, who have followed Bainimarama blindly into treason against a lawfully elected Government.

Note that 99 per cent of the bigger FMF beneficiaries are indigenous Fijians, who I suspect are quietly chuckling around their grog-bowl that Khaiyum (and other prominent Indo-Fijians) are egotistically taking the limelight, and the flak from the bloggers.

I suspect that when the tide turns, the Bainimarama camp and the numerous quiet indigenous Fijian coup collaborators, will blame the Indians for “misleading and manipulating Bainimarama and the Military Council”;  present a tabua or two;  perform a matanigasau or two; and the vanua will come together again, all forgiven.
Who knows where the Indo-Fijian, the Part-European and European coup collaborators will then go to.  Someone can ask them.

Epilogue for 2011 Budget Oscars
It is their personal tragedy, that all these officers and soldiers of the Fiji Military Forces, aided by the current and former Army Commanders, have now wrecked their own reputations, professionalism and marketability in the world of peace-keeping and security provision.

But the greater ongoing tragedy for Fiji, so clearly shown by this 2011 Budget, is that this Military Government and the coup collaborators are imposing a massive Public Debt burden that Fiji’s future generations will struggle to pay, undermining their standards of living for more than a decade.

Look at what is happening today to Greece, Ireland and Portugal, where Public Debt ran out of control, aided by the Global Financial Crisis.

Khaiyum may deserve an Oscar for his acting ability in presenting in the 2011 Budget, mouthing the Bainimarama government’s Roadmap and macro objectives, fully understanding that none of them are being met, or are even likely to be met, while blatantly lying about reducing Fiscal Deficits and the Public Debt.

But supporting Oscars should also go to Fiji’s business community- the tycoons, the partners and principals of the accounting firms, and the numerous collaborating Flotsam and Jetsam from abroad, for merrily playing along and even praising this dangerous 2011 Budget (the images on Fiji One are revealing).

Unfortunately, the economic and social disaster that this military government is visiting on Fiji through the 2011 Budget is not in the “make-believe” world of Hollywood Oscars, also seen so often on our TV screens.

Fiji’s young workers and children will learn that harsh message one day, when the Public Debt chickens come home to roost. Is there anyone in the Fiji Civil Service who can explain all this to the Bainimarama government before further damage is done?

WikiLeaks: Comm Secretariat 'dithered' over Fiji expulsion

LEAKED CABLE: Amitav Banerji (middle)

The Australian:  A Commonwealth working group dithered over a decision to expel Fiji despite pressure from New Zealand, a leaked US embassy cable shows.  

The June 2009 cable, part of a 250,000 document dump by WikiLeaks, records the frustration of Commonwealth Secretariat director of political affairs Amitav Banerji at the passing of a May deadline for the Commonwealth Ministerial Action Group to decide whether to fully suspend Fiji.

Richard Mills, political counsellor at the US embassy in London, reported Banerji expressed his concerns that CMAG had not yet met to discuss Fiji.

Banerji said the Commonwealth's credibility could be damaged if it did not make a decision as promised. He said New Zealand strongly supported a move to suspend Fiji over the Frank Bainimarama-led junta's refusal to return the nation to democratic rule. 

But Malaysia resisted the move because of concerns Fiji might unilaterally quit the Commonwealth, Mills said. Fiji was finally fully suspended in September last year.

Regime to review lease agreements of other companies after Fiji Water u-turn

More changes are heralded after the ruckus over Fiji Water, with the illegal regime now wanting to ping other overseas companies leasing land in Fiji.

Thanks to the hurried u-turn by the American company, the regime is looking to review what major companies are paying in leases.

Illegal leader Frank Bainimarama is quoted in Fiji Broadcasting Corporation today as saying many companies in Fiji are making huge profits but paying little for the privilege of doing business in the country.

Fiji Water was used as an example, with him saying the company is paying "$11,000 in lease, an increase of just $5,000 since 1995, when it used to pay $6,000."

He made it clear the regime would review lease agreements and move to improve the situation.

Payments for the leases are made with landowners from what we know, so it's clear the regime will be setting new edicts regardless of existing deals with landowners.

The looming review of leases come as the claim Fiji Water is engaging in transfer pricing continues to raise questions.

The regime says the company is selling the water at an artificially low price by on-selling it to its sister company. 

According to some, the claim is baseless because marketing costs are huge, especially for water in North America, where a very pure, safe product is available free from the taps. As one reader says "The only thing harder would be to sell ice to Eskimos."

But the regime must either already have the proof or should front up with it. Is Golden Manufacturers Limited understating the cost of the cartons? Are the plastic bottles bought from a related party at an artificially low price? How is the transfer pricing being done?

This would be a routine job for FIRCA, who could use well-established international guidelines for assessing 'real' costs. If Fiji Water didn't meet the guidelines they could take them to court and order payment of higher taxes.

It's probably what that icon of integrity, Mahendra Chaudhry, was doing before the regime's case was stalled, no doubt when it was realised that FIRCA couldn't establish the facts.

Ironically, Aiyaz Sayed Khaiyum's too clever work with the Commerce Commission to control prices of food probably means the regime has set very low benchmarks for business costs in Fiji.

Footnote: Statements about Fiji Water and the budget since Monday have all been attributed to Dictator Bainimarama but there have been no current pictures from what we've seen  accompanying his comments. A short time ago someone posted this comment on his Facebook: "Bainimarama had a stroke? Thats what the coconut wireless is saying around my neighbourhood."

Wednesday, December 1, 2010

2009 London cables show NZ call to suspend Fiji from Commonwealth

New Zealand government efforts to suspend Fiji from the Commonwealth have been revealed in the latest batch of the WikiLeaks release. 

The information is disclosed in a cable from the US Embassy in London dated June 2009 which gives briefings on activities by the Commonwealth Secretariat. 

The cable says New Zealand was pushing hard for Fiji to be suspended from the Commonwealth.

The information is of little surprise, since both New Zealand and Australia have openly criticised Frank Bainimarama for carrying out the 2006 coup.
Both countries have also continued to condemn the changes made by the military government since then, including the abolition of the Constitution and Bainimarama's refusal to hold elections until 2014.

Fiji Water reopening follows its lawyers meeting with regime

By Lauren A.E. Schuker for the Wall Street Journal

Bottled-drink company Fiji Water said it reopened its facility in the South Pacific country for which it is named, following a two-day standoff with the local government over taxes.

Fiji Water, which is owned by billionaire investors Lynda Resnick and Stewart Resnick, closed its bottling plant Monday, sending about 400 workers home, in response to a move by the Fiji government to impose a steep tax increase on companies that extract large volumes of water from the country. Fiji Water was the sole company affected by the increase.

Over the past day, Fiji Water lawyers Craig Cooper and Marigold Moody met with Fiji government officials, including Prime Minister Voreqe Bainimarama, seeking to resolve the dispute. After the meetings, Fiji Water agreed to accept the tax increases and reopened the plant 8 a.m. local time on Wednesday.

"Fiji Water is committed to working with the Fijian government and remains dedicated to helping the country's economy and its people," the company's president, John Cochran, said in a statement.

Earlier this week, Commodore Bainimarama, who came to power in a 2006 coup, said he would welcome a rival taking over Fiji Water's assets if the company refused to comply with the government's tax increases.

Fiji Water, which was started in 1996 by Canadian businessman David Gilmour, has deep ties to Fiji. Its water comes from an artesian aquifer in the Yaqara Valley, a remote part of Fiji's main island. Almost all of the company's workers are Fijians.

On Monday, the company idled those employees, saying it would pay them two weeks' salary. However, it said it has called them back to work for Wednesday's re-opening.

Fiji Water accounts for about 2% of the $10.6 billion U.S. bottled-water market, making it one of the biggest imported waters in the U.S.

The Resnicks' holding company, Roll International Corp., bought Fiji Water in 2004 from Mr. Gilmour, who also founded a resort in the country. Fiji Water's sales rose to $141 million in 2008 from $78 million in 2005 but fell last year to $85 million.

Tuesday, November 30, 2010

Fiji Water to ropen Rakiraki factory tomorrow

 Fiji Water has decided to re-open tomorrow, releasing an hour ago the following statement:
                                                                                                                             “Following discussions today with Fijian officials, FIJI Water will re-open its bottling plant, effective Wednesday morning, Dec. 1, at its regular start up time of 8 a.m.  Through our discussions, we have also agreed to comply with Fiji’s new water tax law.

 "Moving forward, FIJI Water is committed to working with the Fijian government, and remains dedicated to helping the country’s economy and its people.”

Fiji Water factory under guard

Former soldiers and military officers are guarding the Fiji Water factory in Yaqara, near Tavua, after the company gave notice it was quitting Fiji. 

They are part of the security firm, HomeLink, who we understand will be at the factory for two weeks.

The fallout between the American water company and the military regime escalated today with the illegal prime minister, Frank Bainimarama, saying "if Fiji Water no longer wants to operate in Fiji, it must inform the Director of Lands and Yaqara Pastoral Company Limited from whom Fiji Water has leased lands."

Bainimarama said Fiji Water had enjoyed several tax breaks, paying less than a million dollars in total corporate tax while receiving approximately $FJ 4-5 million in VAT refund annually". 

He also said the company sells its water to a US sister company and engaged in transfer pricing. 
There has been no further comment from Fiji Water after its statement yesterday, announcing it intended to shut putting about 400 people out of work.
But it's being reported employees have been told the company is waiting to see if it can work things out with the regime. Workers say they've been promised two weeks pay.

It is understood Fiji Water has a back-up - an artesian supply in the South Island, in Canterbury, where it owns the Spring Fresh brand of bottled water. 

It's believed the company bought Spring Fresh Ltd, the 10th largest bottled water brand in New Zealand, sourced from an artesian aquifer located at Tai Tapu near Christchurch, two years ago.

NZPA says at the time, Fiji Water said the acquisition of Spring Fresh and assets from a related company included the bottling facility and the land and water rights of the SpringFresh aquifer. 
Fiji Water is part of a group of food and beverage companies, and is owned by two Southern California billionaires, Lynda and Stewart Resnick. 
Court documents submitted by the company in 2008 showed that Fiji Water was owned by an entity in Luxembourg, a tax haven, and recent Swiss financial records showed Mr and Mrs Resnick transferred Fiji Water assets to companies in Switzerland. 

Fiji Water plant bottles around 3.5 million litres of water each month for sale at a typical retail price of $US3-$4 ($NZ4-$NZ5.37) a litre, mostly as a "trendy" product for affluent Americans. 

In 2008, the regime rescinded a F20c /litre tax after Fiji Water briefly shut down its plant and put 700 people out of work.

Breaking! Army heading to Fiji Water factory!

The Fiji Water fallout has gathered momentum with reports the army is heading out to the Rakiraki factory.

Coupfourpointfive understands the army will arrive at Fiji Water in a short while, one o'clock according to our source.

We understand the army will be posted at the factory for two weeks.

Fiji water president John Cochran announced yesterday the company was quitting Fiji over the new tax aimed at harvesting more than $22 million dollars for the regime.

Frank Bainimara today replied with a statement saying it was up to Fiji Water if it stayed or left.

More to come as we get it.

Bainimarama: 'Fiji Water engaged in transfer pricing'

Frank Bainimarama is giving Fiji Water the cold shoulder. The company announced yesterday it would pull out of Fiji unless it came to a satisfactory arrangement with the regime over the new 15 cent tax.

In a statement of his own the illegal prime minister says the regime remains "firmly committed to both international and local investment in Fiji but it Fiji Water no longer wants to operate in Fiji, it must inform the Director of Lands and Yaqara Pastoral Company Limited from whom Fiji Water has leased lands."

Bainimarama said that "as usual Fiji Water has adopted tactics that demonstrate that Fiji Water does not care about Fiji or Fijians. They have made statements about supposed instability in Fiji and know it is not true, yet do so because they simply do not want to pay the new taxes."

The illegal leader goes on to accuse Fiji Water of getting the better end of the deal.

He said that "Fiji Water has had a corporate tax holiday since its inception until only two years ago; it has paid less than a million dollars in total corporate tax and only in the past two years (2008 and 2009); it receives approximately $FJ 4-5 million in VAT refund annually given it is export- driven; despite being a premium boutique water product, it declares the selling price of a carton of water at $US4 when at the same time other relatively unknown brands from Fiji like Aqua Pacific declare their selling price to the US market at $US10 a carton; Fiji Water sells its water to a US sister company and therefore is engaged in transfer pricing. These are the facts pertaining to Fiji Water."

Bainimarama said that "the positive feedback from the recent Fiji-Australia, Australia-Fiji, NZ-Fiji and Fiji-NZ business councils meetings, the positive feedback on the Budget and the new investment inflows and interest is indicative of the affirmation of and confidence in Fiji and the Fijian economy by the private sector."

He added that if Fiji Water is no longer interested in Fiji then the Fijian Government, following cancellation of the leases, "will call for international tenders from credible and reputable private sector companies to extract this valuable resource."

Monday, November 29, 2010

Bainimarama rides the hungry tiger and ignores the nation

By Jone Baledrokadroka

When the country’s 2010 economic growth rate is 0.1 percent of GDP, how can you justify giving an additional $8 million to the military? It will now gobble up $101 million or more than 5% of total government expenditure for 2011.

This will now bring military spending to two percent of real GDP for next year, which is the international warning siren for a Third World military regime out of control in peacetime. And believe you me - nothing to show for it this time next year!

Of this $8 million increase, it seems as announced, the Navy gets $6 million. Apparently, $1.5m is a grant to the Fiji Shipping Corporation Limited whilst the Government Shipping Services get $3 million. Both bodies, FSCL and GSS, have been ‘reformed’ and are now under the Navy. 

The Navy gets the rest or $1.5 million increase to their $24.2 million budget for 2011. Almost a quarter of the military budget goes to the 250-strong Navy.  Bringing FSCL and GSS under the Navy it seems is a clever way of increasing the budget for a fleet of aging patrol boats and a naval base starved of Australian Defence Cooperation Programme funding.

This role expansion is typical of a politicized military. The misconceived idea that military technocrats can salvage an inefficient industry has been long debunked, along with Lenin’s socialism. 

Today, it is the idea of private rather than public enterprise that creates efficiencies not to mention the maxim that government should not compete against the private sector. Indeed, the last IMF inspection report called on the regime for such government reforms in reducing the size of government.

Opponents of certain privatizations, however, believe that certain public goods and services should remain primarily in the hands of government in order to ensure that everyone in society has access to them (such as law enforcement, basic health care and basic education.)

But when the country has suffered its worst economic spell as in the last four years, privatization of all other government services such as maritime transportation has to be explored.

The problem is that the regime cannot further reduce the size of government without also justifiably reducing the size of the military. Eighty per cent of the military budget or $3.1 million a fortnight (or $80 million annually) is sunk into the 3277 regular soldiers pay and emoluments. 

All this against continual peacekeeping revenue loss when worked out as total cost to government. True, remittances are from British Army soldiers, security guards overseas, caregivers and overseas families etc.

Drastically reducing the military, and indeed the Navy, is the last thing on Bainimarama’s mind at the moment. In fact, he may very well be thinking of other public enterprises to increase military personnel as per his ‘military for life’ concept initially introduced with Telecom’s Telsat project in 2004 and Ports Security Unit in 2007.

As already mentioned, the paradox of Bainimarama’s ‘New Order’ is that he will need to keep purging and rewarding his political base  in  the military as he  rides and feeds a restless tiger. What the nation thinks or says about military accountability, such as the buried regimental funds enquiry, does not matter.

WikiLeaks - what do the Americans have on Fiji and its tinpot regime?

Revelations today by the whistle blowing website, WikiLeaks, about embarrassing comments from United States diplomatic staff begs the question - so what's been said about Fiji and the military dictatorship?
Washington will surely have its secrets on Fiji, thanks to the fact Viti is now the most politically unstable country in the South Pacific because of the coups.

Fiji's fragile relationship with regional powers New Zealand and Australia and the expulsions of diplomatic staff, will have also been noted by the Americans.

The coup-stricken nation would also be on Washington's radar because it contributes more troops to the United Nations peacekeeping missions than any other country on a per capita basis. 

New Zealand and Australia have both been mentioned in the diplomatic communiques with the Kiwi Prime Minister, John Key, saying he's ready for any revelations.

The private details of the former Kiwi prime minister, Helen Clark, is also said to be known to American spies, since she now works for the United Nations.

Clark's details were noted after a cable to US diplomats issued under US Secretary of State Hillary Clinton's name urged them to collect the "biographic and biometric" information - including iris scans, DNA samples and fingerprints - of key UN officials.

Kiribati gets a mention over the Guantanamo Bay prison with cables revealing haggling over who should take prisoners from the detention facility. Slovenia is offered the chance to meet Barack Obama if it takes a prisoner, while Kiribati is offered millions of dollars of incentives. 

The WikiLeaks cables also reveal that  diplomatic staff thought little of many of the world leaders:

a) The Italian Prime Minister Silvio Berlusconi is referred to as "feckless, vain, and ineffective"

b) North Korea's Kim Jong-il is a "flabby old chap" suffering from trauma from a stroke

c) The Iranian President Mahmoud Ahmadinejad is "Hitler"

d) Robert Mugabe of Zimbabwe is "the crazy old man"

e) The French President Nicolas Sarkozy is called a "naked emperor"

f) And the Libyan leader Muammar Gaddafi is believed to have had a romantic relationship with his Ukranian nurse, a "voluptuous blonde."

We wonder what the Americans have on  Frank Bainimarama and Aiyaz Sayed Khaiyum. 

Pictures: Ahmadinejad (top right), Guantanamo Bay (top left), Kiribati (middle) and Gaddafi (above).

$22 million down the gurgler

FIJI WATER: John Cochran with staff.
The destructive hand of the illegal regime has struck again.

Just days after its clawback budget and Water Resource Tax, the company it was targeting with the new levy, Fiji Water, has annouced it plans to shut down its operation.

A source told Coupfourpointfive last week after senior executive, David Roth, was deported the company was fed up with the regime and would look at cutting its losses to concentrate on producing water in New Zealand.

Few took the threat seriously, with some saying Fiji Water had it too good anyway in Fiji where it was getting off lightly with paying minimal tax for the privilege of exporting millions of litres of natural Fiji water every year.

But Fiji Water president, John Cochran, has today shown they weren't mucking around.

"The country is increasingly unstable, and is becoming a very risky place in which to invest," he said in his statement, although he has said Fiji Water will stay on if talks produce a satisfactory outcome.

So where now for the regime, which has wilfully destroyed yet another business venture that offers jobs to locals and showcases the country internationally?

It introduced the tax in a bid to boost its earnings from less than a million to more than $22 million but could be forced to eat humble pie or find a new operator, the likelier scenario.

Sending Fiji Water packing may well have been its aim, just as it was with the Fiji Times but it's another example of how Aiyaz Sayed Khaiyum and Frank Bainimarama are callously stripping Fiji for their own purposes.

It's become all too easy for Khaiyum and Bainimarama to divide the spoils of war between them and who knows whose lap Fiji's money-making natural water will fall on.

Khaiyum has, after all, business peccadilloes in Hong Kong, Malaysia and Sri Lanka. Bainimarama, of course, has his own affiliates in China and it could be that Fiji Water is turned into a public enterprise with the Chinese. Bainimarama and Khaiyum lost their moral compass long ago and few would be surprised if they made a deal with the Devil.
Cochran's full statement:
Discriminatory Tax Forces Shut Down of Fiji Water factory
John Cochran, President and COO of FIJI Water
Los Angeles, California headquarters on November 28, 2010

In Friday’s budget (11.26.10), the Fiji Government announced that it will impose a 15-cent per liter tax on bottled water at locations where more than 3.5M liters per month are extracted. FIJI Water, which currently pays 1/3rd of a cent per liter, is the only bottled water producer in Fiji affected by the increased tax; bottlers who extract less than this monthly limit will continue to pay about 1/10th of a cent, or 10,000% less tax than FIJI Water.

This new tax is untenable and as a consequence, FIJI Water is left with no choice but to close our facility in Fiji, effective Monday Nov. 29, 2010. We are saddened that we have been forced to make a business decision that will result in hardship to hundreds of Fijians who will now be without work.

In addition, we will be putting on hold several large construction contracts in Fiji, including the renovation of the Drauniivi Primary School, a F$300,000 project and the resurfacing of the Naikabula Yard, worth F$1.6 million. FIJI Water will also be forced to cancel all contracted engineering and support services as well as our purchasing of cartons from Golden Manufacturers. Finally, all ongoing purchases from local suppliers will have to be canceled.

As a leading exporter, FIJI Water has contributed greatly to the Fijian economy. We represent more than F$130 million in export revenue for the country and employ nearly 400 Fijians at our facility. Our investment in Fiji has created millions of dollars in value through direct employment and with our supplier network. We currently pay millions of dollars in duties and income tax to the Government. We also contribute over F$1.8 million dollars annually in royalty payments to the Yaqara Pastoral Company Limited and another F$250,000 annually to a trust that supports the six local villages surrounding our facility.

In addition, our company and the FIJI Water Foundation have worked tirelessly to help improve the quality of life for the Fijian people, including an annual investment of F$1 million to bring clean water to local villages, improve education and provide access to health care services for those in need.

We consider the Government’s current action as a taking of our business, and one that sends a clear and unmistakable message to businesses operating in Fiji or looking to invest there: the country is increasingly unstable, and is becoming a very risky place in which to invest.

FIJI Water remains willing to work through this issue with the Fiji Government, as it would be our preference to keep operating in Fiji.