Inflation Danger

Worries Fiji

Prom a Suva correspondent “Costs climb; Inflation looms!” Familiar-enough headlines else where, but new to Fiji. According to recent reports, government officials are seriously concerned about rising prices and the need for “belt tightening” measures.

Fiji’s consumer prices index has in creased by nearly 12 per cent, since July, 1968. Food prices have soared; land is rocketing in value; city rates are rising and it costs a small fortune to build a medium-range home.

Wages are creeping up—yet there are still hundreds each month who can’t find work.

In January, for instance, only 25 out of 255 people who registered as unemployed were able to be placed in jobs. Among those who registered were 54 school-leavers. Only one of these found work.

The need for increased productivity has become urgent. At the same time, some government and Opposition offi cials feel there is a case for some form of price and wage control— although most recognise it as a step that should be taken as a last resort only.

For young couples planning or in the process of building a home, soar ing costs of building materials have hit hard. Some building contractors are so busy that they can’t commit themselves to building a house—at any cost.

Others have so much on their plate that they quote prices they readily admit would have been much lower nine months or a year ago. In recent years, costs have risen from $5 or S 6 a square foot to $lO or $l2 for a comfortable home.

The construction manager for one of the biggest building contractors was quoted recently as saying the cost of materials was “rising almost every day.”

Another contractor told PIM that the cost to the contractor of building a home had risen by 10-15 per cent, in about six years. The cost to the buyer bore no relation to the cost of construction, he said.

“Mind you, Fiji is one of the few places in the world where one can have a house built for $20,000 —then turn around and sell it for $40,000 the day it’s completed,” he added.

Finance for homes isn’t easy to ob tain, although recent measures by the government have enabled its lending agency, the Housing Authority, to make loans available to a wider cross section of wage-earners.

Rents are at an all-time high, with the shortage of so-called “executive” accommodation made more acute in recent months by the influx of high commission staff and big companies like the First National City Bank, which was rumoured to be offering around $4OO a month for the right type of home.

Spokesmen for Fiji’s five banks have said they are very conscious of inflationary trends and the balance of trade situation in Fiji—and will give government every co-operation in any moves to ease the current trend.

In the House of Representatives in February, Minister for Commerce, In dustry and Co-operatives, Mr. Vijay Singh, gave assurances that a joint government, trade union and em ployers’ committee would be set up to study aspects of inflation and measures to curb them.

“In addition to this, the govern ment believes that while waiting for the report of the committee, we should reactivate the presently mori bund consumers’ association and set

Up other branches of it,” Mr Singh said.

It was encouraging to hear that Fiji’s government intends taking the first cautious steps towards positive action—but as The Fiji Times im mediately pointed out in an editorial, there is an urgent need to curtail, or at the very least, postpone much plan ned government spending.

“This requires political courage,” the editorial challenged, “but if the government itself sets an example of discipline and restraint, the easier it will be to persuade the rest of the community of the need for similar action.”

At the same time, the Suva Cham ber of Commerce called for a gov ernment-sponsored drive to increase productivity. Members expressed con cern over the fact that wages were increasing ahead of productivity.

Some members felt that the pro ductivity of the labour force had fallen off in recent months —in fact, since independence.

“One of the causes of the reduc tion in productivity is that a shortage of skilled and semi-skilled labour has been aggravated by the expansion in the economy, especially in the build ing and engineering sectors,” said the president, Mr. B. D. Lawlor.

One way of overcoming this, he said, was to expand technical train ing and to establish direct incentive schemes, to encourage people to work harder and produce more.

9 See "It's tough in Honiara", p. 28, and "Concern over Fiji land", p. 40.