WELLINGTON (Pacnews) — The latest coup in Fiji will be costly, particularly to the country’s poor, but may be worse for the economy if it fails, the New Zealand Institute of Economic Research says.
The military coup in December is likely to cause long-term harm to the economy, deterring visitors and prompting the departure of professional and skilled workers, if the 2000 coup was anything to go by, the research house said.
It took four years for tourist numbers to properly recover, implying the loss of about 450,000 visits between 2000 and 2003.
“But this is only a relatively short-term and partial view of the economic effects of the earlier coup,” the institute said in a monthly report.
Aside from the 39 per cent fall in visitor arrivals after 2000, there was also a 33 per cent fall in investment, a F$36.6 million ($21.7 million) increase in private transfers abroad as Fijians left the country, and a 3.5 percent increase in the real interest rate.
Slightly offsetting that was a nearly 10 percent rise in government expenditure. Wages, exports, gross domestic product and national welfare were also dented significantly.
“In other words, the effects were profound but, predictably perhaps, the poor will have suffered the most. Although it is too early to be certain, the effects of the 2006 coup are likely to be qualitatively similar, because the external and internal shocks are likely to be the same.”