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Wednesday, May 30, 2007

Fiji Economic Outlook

Read comments on the economy by the Interim Minister for Commerce and Investment in a copy of a Fiji Times articles below.

"Waradi worries for economy, Wednesday, May 30, 2007

The projected contraction in the economy is expected to worsen if key industries including tourism don't kickstart soon, says interim Commerce Minister Taito Waradi.

He said the decline would continue if tourism earnings did not pick up, if the gold mine in Vatukoula didn't restart immediately and if exports didn't increase over rising imports.

Mr Waradi was commenting on the request by the tourism industry for extra marketing funds from the Government.

The Finance Ministry has reserved comments on the industry's request for $3.8million to revamp its marketing strategies.

Interim Finance Minister Mahendra Chaudhry said he would comment once he received the submission from the Fiji Visitors Bureau.

On the state of the economy highlighted by tourism stakeholders last week, Mr Chaudhry said the economy had been contracting since 2006.

The industry has asked for an extra $3.8million to help in its recovery efforts following the decline since the December military takeover.

FVB chief executive officer Viliame Gavoka said the submission of $3.8million was made a few days ago. Figures released by the Fiji Islands Hotel and Tourism for the first quarter of this year showed cumulative hours lost by employees were 702,000.

Association president Dixon Seeto said this amounted to about $2.8million in wage loss and $0.5million lost towards Fiji National Provident Fund contributions.

University of the South Pacific economist Professor Biman Prasad warned the contraction of the economy would continue especially with the lack of recovery in the tourism industry.

Mr Waradi said given the central role of investment in growing the economy, Cabinet last week formed a high-powered sub-committee to address and remove whatever was preventing more than $6million worth of investments from being implemented.

More than $1million of this was offshore funding which could immediately boost our fast depleting foreign reserves, Mr Waradi said.

He said the interim Government intended to find other sources of funding for marketing the tourism industry, getting the Vatukoula mine started and finding alternative sources of fossil fuel from Papua New Guinea and South America."

Similar sentiments to those given by the Interim Minister of Commerce were voiced by an Economics lecturer of the University of the South Pacific Earlier the Reserve Bank of Fiji yesterday.

Last week, the Reserve Bank of Fiji had said that the economy would decline by around 2.5% in 2007 but will experience a turnaround in 2008.

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