Interview with

Minister for Foreign Affairs and External Trade

Date: 6/11/2002
Hon Minister, the world was surprised to see the fragility of the Fijian political system with the internal tensions between native and non-native Fijians back in year 2000. What is your assessment of the current situation and how would you reassure possible investors that Fiji's political problems are over?

We went through rough times after the coup of 2000 and it was very costly for the country, for the people and for our internal ethnic relationships but we believe that that state is history. We have put that behind us and we are moving forward to a new era for the country. Looking back at what we have achieved, we can be proud of our recovery in terms of the political situation. We have come through the general elections under the current constitution. The elections went very well indeed. We had international observers here and they gave us a clean bill of health after the elections. The current government has been in place for over 12 months and has been able to recover and grow the economy. The economy is almost 100% recovered. Almost 100% because we are still not fully satisfied with what we have. We have maintained financial stability and the figures for economic growth are looking very promising. We are looking at a 4.4% growth this year, 5% or 6% next year and another positive growth in the year 2004. The tourists are arriving in large numbers and we might achieve the pre-coup figure of over 400,000 visitors by the end of this year. That is quite possible and talking about tourism, they say, "Someone's tragedy is someone else's fortune". That has been the result of our tourism industry after the September 11th terrorist attacks in New York. We could see people coming into Fiji, to the region as whole, and Fiji has benefited from that.

Avoiding international sanctions was a key aspect to overcome the crisis. How would you describe the current level of international integration that Fiji has accomplished in these last two years?

All the sanctions that were applied to Fiji have gone. Australia, New Zealand and the UK government did apply sanctions and under the Commonwealth, we were suspended from the council meetings. Later on, because of the normalization of our politics, the recovery took place and all the sanctions were lifted. Now we have normal relations with all our neighbors and all our overseas partners. There is only one remaining concern and that is our relations with the European Union. This relates to the EDF, the European Development Fund 9, which is yet to be signed because we still have this political question that will be heard in the Supreme Court early next year. Once the Supreme Court makes the decision and the decision is implemented, as we propose to do, the signing of the EDF9 plan will take place and that will clear all the obstacles relating to our relations with the European Union. Then we will have normal international relations with all our neighbors and countries with which we had diplomatic relations. All the bilateral packages and programs have been resumed and in the case of Australia, the bilateral package has been increased and that indicates a new level of cooperation between our two nations. We have returned to the commonwealth as well and the suspension of benefits from that quarter have been lifted.

During the next Commonwealth Business Council that will take place next March in New Delhi, What is the message you would like to communicate and what can the Fiji islands offer to Commonwealth countries?

All the Commonwealth Members are aware of the normalization of our membership and Fiji is open for business. We see it as a vote of confidence in the increased number of willing investors looking into Fiji and we have just completed an investment mission to the US. I led that mission to Los Angeles and another mission has just returned from Australia. Some months ago, late last year, I led a mission to New Zealand and we could see the increased interest in coming into Fiji to invest. That is obviously a vote of confidence on what is happening here. They could see normalizations of our relations, they could see that the economy has recovered and we offer a lot of opportunities. We offer a lot of attractive concessions to respective investors and they are obviously interested in that. I think that what Fiji offers is considerable. We have a well educated labor force and a central position in the Pacific, Geography favors us. We offer a good lifestyle, our good climate is very attractive, we have good scenery here, good hotels, good tourism resorts, etc. But what of added interest to investors also are our linkages with other markets, our trade agreements through SPARTECA with Australia and New Zealand and through the GSP with the US. Fiji is not only a local market but instead it is also the heart of the all the Pacific markets. From Fiji you have access to all the Pacific Island countries. For instance, the PICTA (Pacific Island Countries Trade Agreement) is a new trade agreement with the 14 Pacific island countries. We also have the PACER (Pacific Economic Cooperation) that includes Australia and New Zealand. With all these trade agreements we are going to give a new dimension to trade, we will expand trade as we are the hub of the Pacific.

The government has a clear intention of opening up the economy to more sectors than tourism. What sectors are benefiting from this diversification in terms of international trade?

We have attracted companies into Fiji since the 70's and the 80's. At that time it was a Tax Free Zone and we also had the Tax Free Factories policy. They could come and operate here under tax-holidays and than use these trade arrangements we have to market out. We have Australian companies or Asian companies who are exporting garments to Australia and New Zealand under the SPARTECA agreement or the US under the GSP arrangement. We have also garment industries that export to the European Union under the Cotonou Agreement. There are companies that are taking advantage of these linkages.

Fiji is currently undergoing a domestic economic diversification process. According to you, in what sectors can foreign investors find more benefits?

In terms of incentives it is quite attractive. There is a broad range of concessions. At this stage Fiji is still an agricultural country. Our natural resources will be utilized for some time for our economic growth. Talking about agriculture, there are a lot of prospects in terms of tropical fruits, pineapples, ginger and things like that. The utilization of our land resources would still be a major focus for us: We have our marine resources that offer great prospects for development and economic growth and we are just touching the tip of the ice-berg; We have forestry resources. We have the largest mahogany plantation stand in the world, a billion dollar industry which is coming on stream now. A trial period to start logging the timber has just begun to gain some experience and to start looking for value adding. We have been trying to diversify into the manufacturing light-industry for some time. We could see manufacturing growing and that is important for our regional perspective. In terms of regionalism we see Fiji taking a major role here. Because of our geography and our relative development status, compared to other small island states, Fiji offers a lot more in the South Pacific than any other. If you go to Tuvalu, or Kiribati you will see a range of Fijian manufactured products. We have a critical role concerning regional integration. We can develop to be the manufacturing center for all these island states. But we obviously need a good shipping arrangement, which is provided by the Pacific Forum. We still need more development but this is the picture we see in the future, a greater regional development with Fiji being the heart of the Pacific. Another exciting sector for Fiji is the IT based industry now that we are linked to the US, to Australia and to New Zealand through the Southern Cross Network. This is going to open up new areas for growth and development in Fiji and we are attracting companies to set up their Call Centers here. The ANZ bank has theirs here; the Westpac Corporation is starting soon. All the necessary infrastructures are already in place to establish a Call Center. There is also the Audio-Visual industry, where we see a lot of growth potential in Fiji. We have established the Fiji Audio-Visual Commission to manage all this potential.

Are they in charge of the Studio City Project?

They are not in charge directly but they are working in close consultation with the people developing the studio city. The Commission itself is a governmental body and its task is to establish the necessary framework and policies, the legislation and concessions that would attract the Audio-Visual industry into Fiji. They have been doing a lot of promotion. Their representatives were with us in the United States recently. They have been going to the Cannes Film Festival a couple of times and they have been talking to a number of studios in Hollywood. When we were in LA, we went to Fox Studios and Sony Studios and spoke to film producers and directors to come to Fiji and film here. We have had some filming done already in Fiji and the people were impressed. The Studio city will start soon. It will be a city of about 30,000 people with all the expertise and skills required for Audio-Visual projects and all the necessary services needed for the Industry. This project is going to create a lot of employment.

One of the interesting facts about Fiji's foreign relations is its contribution to peace through UN peacekeeping forces. For a nation for its size, this is remarkable. Could you tell us more about this?

We pride ourselves in doing that, contributing to peace around the world. We have participated in many countries, many regions around the world and we are known to produce good soldiers, good peacekeepers. We get along with people very well and our soldiers are very professional. That is why there is a huge demand in our participation in war zones and conflict areas. We have good soldiers because of the active life style we enjoy we like action, we play rugby, football, etc.

Is Fiji working with other countries to fight terrorism?

We have to go back to September 11th, when there was a need to step up security, to fight terrorism. We are very supportive of the Security Council Resolution and we are participating in providing information to the Counter Terrorism Committee of the UN. We are quite active in the region by cooperating with the other security forces. We are aware of the threats of terrorism and we are very much aware of the vulnerability of being a small and exposed country. We have been attending regional and international meetings. There was one in Bali last year where we participated and two working committees were established and we are currently working with them. We also work with our counterparts in Australia and New Zealand because we are all vulnerable and the only way to counter terrorism is to work together in a global effort. What happened in Bali a few weeks ago tells us that it is getting closer so we are tightening up security. I know that in the past, some people have been coming through Fiji as a staging post to go to other countries so we have alerted all our security forces, all the broader organizations like immigrations, customs and so on to be on alert for possible terrorist intervention.

How have the recent sad events in Bali and the Philippines affected the tourism sector in Fiji and the investment climate in general?

Someone's misery is someone else's fortune. In one way or another, that is what is happening in Fiji since September 11th. We have seen an increasing number of Americans coming down here. I met a few of them myself and they told me that Fiji is like a place of refuge. Then Bali suffered those terrible events and a few hours after the incident I spoke to an hotelier who told me that there was an increase in the number of enquiries coming through straight after that. All the planes are full now and the hotels have reached top occupancy rates. It is sad what has happened but there are people looking for safer destinations and our remoteness is a major factor. Being in the middle of the ocean from big landmasses, away from big concentrations of population, is providing a buffer zone to us. People see us as a safe haven. Now that the economy has recovered as well as our politics, Fiji is a lot more attractive in terms of tourism.

The South Pacific Games are going to be an opportunity to confirm Fiji capacity to organize high-level international events. What would be the message that the Fiji islands want to communicate during the games to the international community and what other international events will be held in Fiji soon?

It is going to be the biggest South Pacific Games ever. Because of the recovery that has taken place, the normalization of relations and the improvements in the political situation, Fiji is ready to accommodate the games and the participants themselves and we are all looking forward to the games starting in late June next year. It is going to be a serene and peaceful event. We are trying to provide an environment in which everybody who comes to the games has good times. I suppose our friends overseas are looking at whether we will be able to do this or not, to accommodate everyone. I can say that certainly we can do it, we are capable as well as we showed when we hosted the ACP Summit last July. It was the biggest meeting we ever hosted. It went very well indeed and people have indicated positive feedback. We also provided the necessary security for all other state government representatives. We believe that we have the resources to host the Games. It will again enhance the recovery that has taken place in Fiji and our capabilities as a small group of islands to host large meetings whether they are regional or international.

Fiji needs more investments to reach its growth objectives. How would you qualify the current investment climate in the Fiji Islands?

We have recovery in terms of trade and investment. The latter has been an area of concern to us because when we look at the investment trend over the years we can see that it has declined for some time and at the moment it is low, only 10-12% of GDP. That is a very low figure and we would like investment to be around 25-30% of GDP. We believe that the investors confidence is back when we see the interests from investors and perhaps the trend is going to change. We are fully aware of the need for FDI in developing countries. Globally, the FDI has been declining and Fiji has been reflecting the downward trend. Now there is an increased interest in Fiji as an investment destination. We need that 25-30% of GDP in order to generate the 5-6% annual economic growth we want to absorb all the school leavers that come out seeking employment, and to generate the prosperity that this country needs. That is the scenario that we are working towards and with all the positive and favorable signals coming through we can reach this target.

Could you tell our readers a little bit about your professional background?

I worked for 14 years as a diplomat. I worked four years in London as the Counsellor there but at the same time representing a company, the Fiji Sugar Marketing, the marketing arm of the sugar industry. Then in 1988 I got transferred to Brussels and became the Ambassador. I was accredited to other EU countries: France, Portuguese, Spain, Luxemburg, the Netherlands and Greece. I was also accredited to international organisations like UNESCO and the WTO in Geneva. It was an interesting time, whilst there I saw the evolution of the European Union. That was exciting for me from a working perspective. It was not just a representational post. The varied work kept me there for ten years. Before that I worked in the government for eleven years in the Ministry of Agriculture, as an Agricultural Economist.

Winne cannot be held responsible for unedited transcription.