Address By Ambassador M. Osman Siddique

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Address By

Ambassador M. Osman Siddique U.S. Embassy Chief Guest At

Fiji Chamber of Commerce & Industry Suva, Fiji March 24, 2001

We are living in interesting times. Never has the bridge between politics and economics been so apparent, or so important to the everyday mission of all nations around the world. The nations most likely to succeed in this new world in seizing the opportunities and meeting the threats of our time, are those that respond to the needs and aspirations of their people, promote commerce and cooperation instead of conflict and have the openness and flexibility to harness the winds of change.

In this respect some argue that democracy hinders economic growth. We need to look no further that the economic vitality of Thailand, Taiwan and South Korea for example, to see that economic growth and democratic development can go hand in hand. Indeed in the information-based economy of today and tomorrow, free market democracies have unique advantages. Freedom and democracy strengthen the prospects for strong and enduring economic progress.

Every nation of the Asia-Pacific must preserve the best of its traditions while pursuing the benefits of progress. But surely we can all agree that human dignity and individual worth must never be undervalued or abused. The United States will continue to stand with those who stand for freedom and free market systems in the Pacific and beyond.

Doing so reflects not only our ideals, it advances our interests. A nation that respects the rights of its own people is far more likely to respect the rights of its neighbors, to keep its word, to play by the rules, to be a reliable partner in trade and commerce and in the pursuit of peace and stability.

The intensifying process of economic integration and political interdependence that we know as globalization is, clearly tearing down barriers and building new networks among nations, peoples, and cultures at an astonishing and historically unprecedented rate. It has been fueled by an explosion of technology that enables information, ideas, and money, people, products and services to move within and across national borders at increasingly greater speeds and volumes.

For most people in countries like the United States, this is helping to create an almost unprecedented prosperity and along with it the change to meet some of the long-term challenges we face within our nations. But I think it’s important to point out that globalization need not benefit only the advanced nations. Indeed, in developing countries like Fiji, it too brings the promise but not the guarantee of a better future. More people have been lifted out of poverty the last few decades than any time in history. Life expectancy in developing countries is up. Infant mortality is down. And according to the United Nations Human Development Index, which measures a decent standard of living, a good education, and a long and healthy life, the gap between rich and poor countries, actually has declined since 1970. And yet, that is, by far, not the whole story. For, if you took another starting point or just one region of the world, or a set of governments that had particular vulnerabilities to developments like the Asian financial crisis, for example, you could make a compelling case that from time to time, people in developing countries themselves, if they get caught on the wrong side of a development like the Asian financial crisis, are actually worse off for quite a good while.

And we begin this new century and a new millennium with half the world’s people struggling to survive on less than US$ 2.00 per day, nearly one billion living in chronic hunger. Almost a billion of the world’s adult population cannot read. Half the children in the poorest countries still are not in school. So, while some of us walk on the cutting edge of the new global economy, still, amazing numbers of people live on the bare razor’s edge of survival.

And these trends and other troubling ones are likely to be exacerbated by a rapidly growing population, expected to increase by 50 percent by the middle of this century, with the increase concentrated almost entirely in nations that today, at least, are the least capable of coping with it. So the great question before us is not whether globalization will proceed, but how. And will Fiji join the Global Economy?

As the United States Ambassador to Fiji, I have experienced firsthand the tremendous economic potential this country has to offer. And I have also witnessed the damage to that potential accompanying the political upheaval of the last nine months. Some of the best and brightest have left for safer and greener pastures, taking with them their dedication and excellence. Many potential investors, if not already bolted are merely marking time. And although tourism is showing a slow reversal of the downturn of the past several months, many garment industries have closed down stripping the shirts off the backs of thousands of workers.

So it’s not for me here to answer whether Fiji will join the global economic village. It is for citizens of this, great Republic to answer. And it’s up to the members of this Chamber of Commerce to ponder through the issues and provide leadership and guidance to the business community and politicians of this nation.

I will be, however, offering a few comments and thoughts on this subject which I hope will be in the interest of all concerned.

I believe there are a number of critical factors that Fiji must face if it is to answer the question - will Fiji join the global economy?

Firstly, Fiji must make an extraordinary commitment to stability and good governance. In the last 15 years, political volatility has made Fiji more famous than any other aspect of this tropical paradise. Fiji, known in the American mindset as a part of the romantic tropical paradise has now become famous for changing governments, often without notice. For those from the outside who want to do business in Fiji, this pattern of political change is quite unsettling.

You all know very well that the heart of the free market system is stability, consistency and good governance. Business plans, models and budgets are meaningless in the absence of the above. Once you remove stability from the market, whether it is a sudden change of government, the threat of violence or a change of investment and tax rules, businesses cannot plan for anything. When instability enters a marketplace, investors flee and businesses fail.

Secondly, Fiji must make a commitment to growth and capital formation. During the past 15 years, Fiji suffered not only from political upheavals, economic and financial convulsions, but it has also endured some of the lowest rates of private capital formation in the world. In 1980-90, total private and public investment in Fiji averaged 19.9 percent of GDP. In 1990-99, the average dropped to 12.4 percent. The average for the developing world is between 20 to 30 percent. The result of lackluster private capital formation in Fiji during the last decade has been haphazard GDP and employment growth. And an unstable political and economic environment has severely limited Fiji’s ability to attract capital to rebuild the essential infrastructure without which businesses cannot expand.

The vast economic potential of Fiji is still intact while the political development in Fiji has received the majority of coverage in the international press, it is the businesses of Fiji that have silently guided the country forward. Fiji Water has put the country on the International map in a positive and significant way, and is now the 4th best selling imported bottled water brand in the extremely competitive North American market. World class hotels like the Outrigger, Sheraton and the Shangri-La have established operations here, and understand Fiji’s powerful attraction to tourists the world over. A number of small businesses like Pure Fiji Export Ltd. otherwise known as Sandollars have established a brand name for its soaps, lotions, bath oils, and spa range both here and internationally. They are exporting to the U.S., U.K., Australia and a new market in Korea. At the last Grammy Awards, its basket of products were selected and purchased as a gift item for 150 stars/presenters. The company is looking forward to receiving photos of their products held by top name stars like Madonna, Elton John, Neil Diamond, Cher, Jennifer Lopez, Andy Williams and Billy Joel just to mention a few. And guess where the organizers of the Grammys found Pure Fiji Export - Sandollars? On the Internet - ebubbles!!

The Wallstreet Journal referred to Fiji in a recent article, despite the crisis as "The South Pacific’s Most Promising Economy." The World Bank concluded several years ago that Fiji can easily achieve 5 percent and higher growth a year. Bank of Hawai‘i reiterated Fiji’s growth potential in its Fiji Economic Reports in both 1996 & 1998. Fiji has the three essential factors to make rapid economic growth possible: the land mass, the market and the labor force. Apart from those basic requirements of growth, Fiji needs to improve the Institutional structure - a system of law and order, and the physical infrastructure that make it possible to produce more of every thing Fiji produces.

Working together, the United States and Fiji can help lead the way to an Asia Pacific region in which economic success and greater freedom advance together and support one another, a region in which growing opportunity is matched and strengthened by Increasing freedom, stability, security and the rule of law.

We still have challenges to meet. We still have opportunities to seize. We still have much to learn from one another. But I am confident we will do all these things, because we know that by working together and working with others we can build a Pacific community based on shared interest, shared values and shared dreams. It is my great honor, therefore, to be here today to reaffirm America’s enduring engagement in the Pacific and our long and proud relationship with the people and businesses of Fiji.

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