Fiji slashes dollar to lure back tourists

Frank Bainimarama says expelled journalists may be allowed back in a month. Photo / Greg Bowker

Fiji devalued its currency 20 per cent yesterday in the hope of drawing back tourist dollars to boost its economy, suffering since the 2006 military coup.

But the New Zealand Government says military leader Frank Bainimarama has given the country a "passport to poverty" and New Zealanders should think twice about going there.

Foreign Minister Murray McCully said Fiji might seem more attractive to tourists but he remained cautious on safety and ethical grounds.

Even accepting that most of the tension would be around Suva and that most tourists would avoid that area, there was a level of unpredictability with the military-led regime that should make people think about getting caught up in the turmoil.

There were considerations beyond safety, too.

"There will be a significant number of New Zealanders who think that this is a regime that doesn't deserve any indirect support in the way of their tourism dollars."

Prime Minister John Key, speaking during a visit to China - and before the currency devaluation - said Commodore Bainimarama was "effectively delivering a passport to poverty" for Fijians with tourist numbers falling and little prospect of investment there.

Mr Key said he might raise Fiji in his talks with Premier Wen Jiabao.

"Well-directed aid plays an important part in the Pacific and we are keen to work with the Chinese and others where it makes sense to co-ordinate that aid."

China has supported the Fiji regime since the coup with a US$150 million ($259.5 million) low-interest loan.

The military-led Government has tightened its grip on power since the Court of Appeal last week declared unlawful the 2006 coup by Commodore Bainimarama.

The judges were sacked, the constitution dissolved, the media censored, foreign journalists expelled, the Reserve Bank occupied and the bank governor, Savenaca Narube, sacked.

The devaluation was announced yesterday by his replacement, Sada Reddy, who said it would benefit exporters and provide a much-needed boost to tourism.

Mr McCully said the action was a reflection of the weaker position of the Fijian economy relative to other economies and a diminishing level of confidence in Fiji internationally.

Commodore Bainimarama said yesterday on National Radio that the country might be opened up again to international media in a month.

Mr McCully commented: "That's very comforting coming from a man who promised there would be elections by March 2009."

Meanwhile, the unified position of the Pacific Islands Forum to press for Fiji's return to democracy appeared threatened yesterday when Cook Islands Deputy Prime Minister Sir Terepai Maoate told Radio NZ New Zealand and Australia should be excluded from any talks with Fiji.

That was followed, however, by a strong statement by the forum chairman, Niue Premier Toke Talagi, who attacked the actions of Commodore Bainimarama and President Josefa Iloilo - who reappointed the commodore Prime Minister - as "irresponsible" and showing "a wanton disregard for constitutionalism and the rule of law in Fiji".

He said the forum still stood ready to support any legitimate and balanced effort to return Fiji to freedom and democracy.

And he raised the issue of the forum secretariat remaining in Suva.

Mr McCully was due to call Cook Islands Foreign Minister Wilkie Rasmussen last night but said he did not believe Sir Terepai had represented the Cook Islands' position.

"We are very much alert to the fact it would suit the interim regime in Fiji to split the forum. The forum has suffered that sort of challenge before and ... still been able to emerge with a strong and principled consensus position."

Mr McCully was continuing to contact Pacific counterparts last night. He said there was no scheduled special meeting about Fiji ahead of the next forum leaders' meeting in Australia in August. An earlier meeting was possible if it became difficult for forum headquarters to remain in Suva.