Speaking in parliament yesterday, Minister for Economy Aiyaz Sayed-Khaiyum said government was expecting to see tourism numbers climb in 2020.
“We were expecting to welcome a number of tourists that matched the number of Fijians. But with international passenger flights grounded, tourism revenues have evaporated. That’s 40 per cent of our GDP lost in a matter of days, or even hours, and the ripple effects have dropped Fiji’s economic activity to its lowest level ever,” Sayed-Khaiyum said.
Remittances are projected to fall by 15 per cent as other economies see serious declines.
Foreign Direct Investment is projected to slash by 40 per cent. Our once-thriving garment-makers have seen orders halted and supply chains disrupted.
“Driven by this global fallout, we’re now projecting the single largest economic contraction in Fijian history, some 21.7 per cent. Already, 115,000 Fijians – one third of our workforce – have had their hours reduced or lost their jobs entirely.”
Fiji’s economy has grown at a steady rate above three per cent –– on average –– over the past ten years, but the strength of past revenues won’t cure COVID-19’s impact on our economy.
“Even if we could afford one, there is no vaccine yet to buy. There is no magic pill that will instantly revive Fijian tourism when there are no tourists on the planes. We’re dealing with a once-in-a-century external shock to our economy, to livelihoods and to the global financial system. So, no, we can’t lean on past economic success –– record-breaking as it may have been. No nation can, including developed nations like Germany and the United States, both of whom are mired in economic recession after their longest periods of economic growth. As is our neighbour, Australia, whose recession-free streak of nearly 29 years was shattered by this pandemic within months.”
Saye-Khaiyum said disasters have a way of distilling priorities. We juggled a great many uncertain and evolving dynamics in this budget, but through the great many difficult decisions we’ve made, we were guided by a simple set of principles:
“Number One: We need to bring back jobs. Particularly in tourism, that begins with bringing down taxes. Number Two: So long as this pandemic remains, so must our safety net for those who are unemployed and those whose hours and salaries have been cut.
“Lastly, to stop this economic fallout from doing permanent, structural damage, we must fill the void of falling investment and consumption with a strategic and sustainable government stimulus. In doing so, we must get Fiji building again, get Fiji working again, sometimes in new ways, and bring Fiji’s economy back across a broad front.”