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There is a need to properly monitor the impact of the global financial crisis on the poor in Fiji in order to ascertain how best government can respond to it, an economist said.
In a public lecture at the Fiji Institute of Technology on Thursday, University of the south Pacific lecturer Dr Sunil Kumar, criticised initial claims that the crisis would not affect Fiji, saying it was having a direct impact on the poor, especially in terms of employment and costs of basic essentials like education and food.
“We already had poverty before the crisis started but the point is when employment opportunities disappear and if unemployment increases, then poverty level would increase with it because people lose their incomes. So what I’m saying is that we already have 11 or 12 percent of households in this country who are in food poverty, which means they don’t have enough income or resources for food.
“So if incomes decline, it will further deteriorate the situation. And some of these people who are already in that strata would suffer very heavily. Which means their food consumption, their medicine consumption and essential consumption will decline and it could result in lots of suffering for poor people. For instance some children will probably drop out of school because their parents can’t afford their busfare or book money or uniform money, so that’s the problem,” Kumar said.
He said the reality was that the financial crisis had already aggravated Fiji’s poverty problem and in order to formulate effective policy responses, government needed to properly monitor the situation.
“We would need some kind of monitoring mechanism where a government department, social welfare department, or some other agency is actually able to go out and monitor the extent of the problem. Then we can direct resources into those activities and be able to rescue the situation. This means if there are households that are not able to send their children to school, then it’s a situation that needs attention. Otherwise some people will forever fall into poverty, which means they will not be able to send their children to school and be able to get meaningful employment for them, so the poverty problem deepens,” said Kumar.
In his paper titled: “Impact of Global Financial Crisis on the Poor”, Kumar highlighted how the crisis would hit the poor, especially in the areas of tourism - where less spending here by tourists meant lower benefits spilling down to the poor community – and remittances, which has dropped as affected Fiji workers overseas send less money home.
Currency depreciations and devaluations have also impacted heavily, as they have had a dramatic impact on commodity prices.
“This often has negative effect on the poor. Fiji’s devaluation impacted on the poor people’s food consumption in a significant way. All our medicinal products in the market are imported and so it had a dramatic effect on the poor and elderly who depend so much on medicine to enjoy normal lives,” Kumar said.
