'Sugar definitely has a future'

This was the key sentiment expressed by Isimeli Bose, Fiji's Trade Minister, when he spoke to The Courier earlier this year. Mr Bose insisted that 'no matter what anybody says, sugar will be the backbone of this country's economy for years to come.'

When we discussed Fiji's current economic situation and future prospects with the Minister, it was not surprising that sugar should have featured so prominently. The sector faces a difficult future for both internal and external reasons. At home, the long-term leases granted to the farmers (mainly Fiji Indians) under the Agricultural Landlord and Tenant Act are due to expire over the next few years. No provision was made for their renewal and the resulting uncertainty has provoked widespread concern, not least among the leaseholders themselves. The external 'threat' comes from new international trade rules administered by the World Trade Organisation. At present, Fiji's sugar industry is heavily dependent on the preferential access to the EU market which was granted under the Lomé Sugar Protocol. No one is quite sure what will happen when Lomé IV expires at the turn of the century but it is clear that the stakes are high.

Mr Bose was quick to acknowledge the importance of ending the uncertainty facing the sugar farmers. 'But the real challenge', he said, 'is to ensure the maintenance of our markets for sugar.' He was aware of the encroachment of global trade liberalisation but stressed that the industry's leaders and the government were 'doing the work now and planning for the future.' At the same time, the authorities are clearly hoping that the European Union will be able to continue with some form of preferential arrangement after the year 2000, if only to buy time so that the industry can adapt and farmers can diversify.

On the subject of trade diversification, Mr Bose pointed out that 'the field is very limited'. He continued; 'However, since 1988, we have seen garment production picking up from very humble beginnings. By 1995, we had about F$185 million-worth of exports in this area.' He also spoke enthusiastically about the government policy of encouraging manufacturing in tax-free factories and zones. 'This developed well between 1989 and 1992 and then there was something of a slowdown.' Tax-free factories have been established in a number of locations and the first real tax-free zone is now being set up in Kalabo. Mr Bose indicated that EU assistance was being provided in this area.

Privatisation

Our conversation then turned to the changing economic role of governments - throughout the world, they are withdrawing from active involvement in industrial and commercial operations. We asked how far this process had occurred in Fiji and, in particular, whether there was a privatisation policy. The Minister replied in the affirmative, pointing out that government departments 'do not usually make very good businesspeople.' The policy, therefore, was to 'corporatise' and 'privatise', although the process is still in its early stages. The Trade and Commerce Ministry has a public enterprise unit which is responsible for drawing up a policy framework for the government. In 1995, Mr Bose explained, a public enterprise bill was presented to Parliament, 'but there were so many concerns expressed to the previous Minister that it was referred to a select committee - which, in fact was chaired by me before I took up my present poet.' The committee had now completed its work and the Minister indicated that the issue would go back to Parliament in September.

Despite the legislative delay, Mr Bose was keen to stress that his department was already working on individual programmes. The post and telecoms business, for example, had just gone through another stage towards privatisation.

There is, of course, an important distinction between 'corporatisation' and 'privatisation' - the former implies staying within the state sector but at arms-length from the administration. This point was acknowledged by our interviewee who explained that the approach was a step-by-step one. The first stage was to reorganise a department along commercial lines. Corporatisation came next 'and then finally you have privatisation by disposing of shares.'

He stressed that the most important aim was to ensure an element of competition wherever possible. 'There is no point simply moving from a government monopoly to a private monopoly', he insisted, 'although obviously, there are utilities like water, electricity and even telephones where this may not be easy.' The minister concluded; 'Where they are natural monopolies, we will regulate them.'

Our final topic of discussion was the possibility of regional integration in the Pacific.

How far had the South Pacific countries gone in this direction and did the Minister think there was a need for closer economic cooperation? Mr Bose replied that he thought economic integration was a good thing. He pointed to a document on his desk containing a draft proposal for a bilateral trade agreement with Papua New Guinea. 'We will soon be holding negotiations with them, and have also just signed an agreement with Tonga.'

The focus on bilateral trade arrangements at this stage suggests that the region still has some way to go on the regional integration path.

But the Minister nonetheless insisted that it was something 'that can and will happen'.