IDN – InDepthNews – Analysis That Matters. October 2020
By Kalinga Seneviratne
SYDNEY (IDN) – The COVID-19 crisis has hit tourism-dependent Pacific Island countries severely. Fiji, the largest of these states, is feeling the impact badly, with laid-off workers of tourism-related industries, such as hotels and travel companies, turning to farming and fishing for survival. Because of its larger land mass and fishing grounds in the sea, Fiji’s population is trying to cushion the impact depending on their natural resources.
Sainimili Dauvere, a 36-year-old single mother who lost her job in a resort told Fiji’ national broadcaster recently that these are “God gifted resources” and called on her friends not to lose hope. Litiana Nakoula, who lost her job at a travel agency agreed. “Though we are not working right now and being at home we don’t wait for assistance to come from the Government, but we have the farm where we go out and do something,” she told Fiji Broadcasting Corporation.
“A good number of these … have been supporting their families. Many … have been sole breadwinners. To date there has been no major research to ascertain the impact of the job losses,” said Dr Shailendra Singh, Journalism Coordinator at the University of the South Pacific (USP), speaking to IDN from Fiji’s capital Suva.
Fiji employs over 150,000 of its citizens in the tourism sector directly or indirectly. Fiji’s population was 883,483 in the 2018 census. Tourism provides just above 30 per cent of Fiji’s Gross Domestic Product (GDP). At 870,309, Fiji’s tourist arrivals in 2018 were nearly as much as its entire population.
“Fiji does not have a welfare system, so it’s safe to say that the effect on the affected families must be devastating,” noted Dr Singh. “Farming and fishing can at best be seen as temporary measures to put food on the table and perhaps earn some extra cash but in most cases, they do not match the sustained income from tourism, based on regular employment”.
But, his USP colleague, disaster risk management supervisor and coordinator Villamu Lese has a different take on this. Speaking at a virtual discussion on the results of a survey on unemployment by the university, he argued that the pandemic has actually reduced unemployment.
Lese described “unemployment” as an able person having the ability to work but is not working or contributing in supporting the household. “Due to lockdown, the able people are returning to their villages or communities and are becoming useful members of the community as they are getting involved in home gardening or other activities,” he said. Thus, arguing that they are not unemployed. He highlighted there was an increased reliance on food sources from the garden, family plantation and sea.
The Accident Compensation Commission of Fiji, in a report released earlier in September, said that the June quarter has recorded a 98.6 per cent reduction in tourism revenue from that of the March 2020 quarter. Earning for the June 2020 quarter stood at $4.2 million compared to June 2019 quarter earnings from tourism that stood at $528.8 million, a 99.2 per cent drop.
World Bank affiliated International Finance Corporation (IFC) in its ‘Fiji COVID-19 Business Survey: Tourism Focus’ released in July 2020 revealed that 50 per cent of tourism businesses surveyed are hibernating or fully closed and 35 per cent are active but with reduced staff. “If the situation does not change in six months, 29 percent of tourism businesses and 11 per cent of non-tourism businesses surveyed – around 500 businesses – expect to go bankrupt,” warned Thomas Jacob, IFC’s country manager for Australia and the South Pacific region.
“At a national level, the Fijian economy is expected to register its largest decline with GDP projected to contract by an estimated 21.7 per cent in 2020, and unemployment rate forecasted to increase to 27 per cent,” responded Faiyaz Siddiq Koya, Minister for Commerce, Trade and Tourism.
IFC report pointed out, that 20 per cent of tourism businesses are currently unable to service their debt and a further 16 per cent of tourism businesses and 11 per cent of non-tourism businesses expect to default on their debt within one to four months.
National carrier Fiji Airways has grounded 95 percent of its flights and there have been rumours that it is on the verge of insolvency. Meanwhile, a staggering 279 hotels and resorts have closed since the outbreak and the numbers are increasing. Tony Whitton, manager of local travel firm Rosie Holidays believes that the industry will not recover at least until the end of 2021.
Australia, which closed its borders in March thus starving Fiji of its biggest tourist market, has recently hinted that they may throw a lifeline to Fiji’s economy. Australian High Commissioner to Fiji John Feakes was reported to have said that Canberra is exploring the possibility of opening up employment opportunities for Fijians (and other Pacific islanders) once borders open and travel protocols are in place. Australia has a labour shortage in the agriculture, horticulture and food production industries. In fact, earlier in September, a charter flight brought a group of fruit pickers from Vanuatu to work in Australian farms.
Even before the COVID-19 impact, climatic change was beginning to have an impact on the Pacific Islands and its tourism sector. Thus, Maureen Penjuell, coordinator of the Pacific Network on Globalisation (PANG) thinks that the way Fiji and the Pacific Island tackles the post-COVID-19 tourism recovery must factor in environmental issues to address the impact of climatic change.
“To adapt and survive Fiji, and other developing countries must ensure they have the flexibility to respond to a dynamic future; this includes not signing away policy space needed to nurture industries in free trade agreements,” she warns.
Addressing a Virtual Island Summit 2020 in September, Fiji’s Prime Minister Voreqe Bainimarama said, “this new crisis is an unfortunate turn of fate for the very nations that were already on the front line (of climatic change). Now, as we face these dual crises – climate change and contagion – island nations must stand together with a more united voice than ever before”. He argued that Fiji and other island nations need to “adapt and innovate” to overcome the crisis.
But Fiji’s hands could be tied with a mountain of debts. In July, as part of the budget, the Fiji government announced a stimulus package of FD 2 billion ($927 million) to help the island nation battle the impact of COVID-19, pushing the debt to GDP ratio to 83.4 per cent.
“We are living on borrowed time and borrowed money,” says Dr Singh. “The question is, ‘for how much longer?’ Another question is, what other choice did the government have in the face of an unprecedented calamity?”. [IDN-InDepthNews – 29 September 2020]
Image: Members (dark blue) of the Pacific Islands Forum. CC BY-SA 3.0 Source: Wikimedia Commons.
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