Australia’s Assistant Treasurer says in the post-COVID environment Canberra is willing to re-examine its policies including loan concessionality, debt consolidation and aid allocations to Pacific Islands nations but is not giving any promises or firm commitments.
Michael Sukkar is attending the Forum Economic Minister Meeting which kicks off this morning. Australia has already reallocated well over A$100 million to assist Pacific Islands respond to the health, social and economic impacts of COVID-19. But those funds have been reallocated from the existing aid budget.
The next federal budget is due for delivery on October 6, and Sukkar says: “if we do seek to supplement aid or humanitarian assistance to our region, that will be done with the broad principles of the Pacific Step up and will be focussed primarily on our immediate Pacific region and neighbours.”
Sukkar expects discussion of the A$2 billion Australian Infrastructure Financing Facility at today’s meeting. He says eight projects have been approved, utilising a mix of grants and non-concessional loans, and has not ruled out revisiting the nature of those loans, as there is “great value to moving to concessional loans”.
“Whilst I don’t want to necessarily announce any change of policy, I think the broad view is that we have to be nimble as we possibly can and that means re-examining all pre-existing COVID programmes,” Sukkar told Pacific journalists yesterday.
“I think it’s safe to say that in a post-COVID environment the Australian government is willing to re-examine everything with fresh eyes… and the view is that with the infrastructure facility, more concessional loan rates or loan terms would be likely to unlock particular projects.”
The Minister said discussions about consolidating debt in multilateral forums is “certainly gathering steam.” He also said the demand for Pacific island seasonal workers is likely to continue and the Australian government has done “some fairly important work in ensuring that appropriate quarantining arrangements and protocols are established to ensure they can continue to come.”
“With the Pacific yet to experience COVID-19, we need to err on the side of caution to ensure that the COVID-19 doesn't get a foothold.
“I think it would be a disaster with fragile health systems and other infrastructure for Australia to effectively be sending COVID into the Pacific through the Pacific island workforce,” Sukkar says.
Preparations are currently underway to send 120 ni-Vanuatu workers to the Northern Territory to help with the mango harvest and there are hopes in other Pacific nations that they will also be able to supply workers for upcoming harvests.
On tourism, Sukkar believes in the longer-term, travel bubbles are “an absolutely worthy way to go” but there is still a lot of work to do on protocols, and that no country in the world could say they have yet “perfected the art of contact tracing and ring-fencing before COVID-19 has the opportunity to spread like wildfire.”
“Until you really have perfected that, I think it is very hard to put in place a 'bubble'.
“But the concept of a bubble is really the only long-term solution and the only sense of certainty that we can all have in getting back to what is an economic engine room for the Pacific.”
The skipper of a yacht that has just been cleared under Fiji’s ‘Blue Lane’ program says Australia, New Zealand and other Pacific island nations should follow Fiji’s lead and create an easy pathway for yachts to visit their countries.
Keith Whitaker, who is sailing on the Zatara with his family, says this would ensure the sustainability of Fiji’s ‘Blue Lane’ program as the cyclone season approaches.
“In order for Fiji’s Blue Lane to be really successful you need a country like New Zealand or Australia that's out of the cyclone belt to create a Blue Lane and to imitate what Fiji’s done. And they need to do that right away because what's hurting the cruising community right now—yachties right now that are stuck in New Zealand—is the uncertainty of where they can go once the cyclone season comes.”
The America’s Cup is scheduled to be staged in New Zealand later this year and prior to travel restrictions imposed as a result of the COVID-19 pandemic, Pacific Island nations such as Fiji were hopeful yachts transiting from the northern hemisphere would call into island ports before continuing on the watch the race.
Whitaker says Fiji should be congratulated for taking the lead: “I think that Fiji has done an outstanding job with their Blue Lane program of allowing yachties to come in.”
“Yachties are the least risk for COVID spread, all of us are conscientious to the environment, conscientious to culture, conscientious to spreading any kind of disease. All of us are going to be clear when we leave the port we're coming from and I think it is absolutely necessary for all of these islands to open up to yachties. Most of us to have money to spend, we have boat projects to do and we bring some revenue to the economy that otherwise in a time of COVID-19 you're not getting.”
The Whitaker family has previously cruised Fiji, Tonga, American Samoa and parts of French Polynesia. They stopped at the disputed Minerva Reef en route from New Zealand due to bad weather, with the permission of the Tongan navy, according to Whitaker.
In his contribution to the 2020-21 Fiji Budget debate this week, Tourism Minister Faiyaz Koya said 26 yachts had been approved to enter Fiji and are anticipated to inject F$1million into the economy. Port Denarau Marina says it has received 100 applications from yachts and superyacht owners wishing to travel to Fiji. This is the only allowable port of entry into Fiji under the Blue Lane program.
In neighbouring Tonga, Matangi Tonga reports that two yachts, the Nadine and Clio that were on the way to Fiji have been allowed to anchor at Port Maurelle until weather clears.
“The situation is under control, they are not allowed ashore, the vessels are separated and we are keeping a sharp monitor on them,” Tongan Navy Commander Taniela Tuita told Matangi Tonga.
All international cruise ships and yachts scheduled to arrive in Tonga were barred indefinitely from March 17. Tonga has no recorded cases of COVID-19.
Meanwhile French Polynesia is also moving to welcome superyachts and reopening to cruise ships. Paul Gauguin Cruises is due to resume its schedule of seven-to-14-night sailings in Tahiti, French Polynesia and the South Pacific from next month.
One of Fiji’s oldest island resorts is now on the market.
Beachcomber Island Resort in the Mamanuca islands in Western Viti Levu was chalked onto the “For Sale” list by Bayleys Real Estate this week with a price tag of F$25 million.
“From time to time exceptional real estate opportunities are presented to the international market place. This is a one-time opportunity,” Bayleys’ advertisement reads.
“There are more opportunities for further development such as integrated resort rooms, villas, apartments, and residential homes. Interest has also been shown in the possibility of adding marina facilities to enhance the new resorts and residential lifestyle.”
Beachcomber Island Resort is the latest addition to the list of resorts currently on the market in Fiji, a list that may well grow if Fiji’s tourism sector fails to recover from the COVID-19 pandemic any time soon.
According to the Fiji Hotel and Tourism Association (FHTA), the struggle to stay in business will become more pronounced over the coming weeks or months if the current crippling impact of COVID-19 on Fiji’s tourism sector drags on.
“Many properties such as Beachcomber, Pullman, The Pearl, Smugglers Cove, etc, were listed for sale before the onset of COVID-related restrictions in Fiji and subsequent dip in the tourism industry. Other properties will be fighting hard to buck that trend of pulling up pegs and selling and this is evident by the mass layoffs/redundancies that have been hitting the news headlines in recent months,” FHTA chief executive officer Fantasha Lockington told Islands Business.
“No business will want to close up shop for good, so properties have gone into saver mode - reducing expenditure and focusing on domestic guests.”
The big resorts may be better equipped with cash to hold on longer, but the hardest hit, said Lockington, will be the smaller properties.
“Even if they release all their staff and minimise expenses, they still have substantial fixed payments to make and these don't just disappear. Sure they have been given grace periods by the various financial institutions but that all comes to an end in the next few weeks. We are sure that some of the properties that closed their doors because of COVID-19, have closed their doors for good. In the next few months, we project that the economic downturn will finally reach Suva and will affect many other industries and sectors. Tourism brought in 46% of Fiji's GDP income last year and it touches every person in Fiji, directly and indirectly. So the tourism downturn will hit the hardest in the next few months and Government has forecasted this, hence their historic National Budget,” said Lockington.
The extent of COVID-19’s impact upon Fiji’s tourism sector was recently quantified in a business survey conducted in May and released last week by the International Finance Corporation.
The survey – of which 620 of the over 3,500 respondents were tourism specific businesses – found that 29% (or over 170 tourism specific businesses) expected to go bankrupt if things don’t change by November.
The meltdown also involved a huge sector-wide loss of income, resulting in most operators identifying the “lack of cash flow to cover operating expenses” as their topmost concern.
“Things are not good, as you would expect. The industry cannot fully rely on domestic tourism due to the low revenue generation so they are struggling to even break-even, said Lockington.
“But FHTA is working together with Government and other tourism stakeholders to ensure that when the borders do reopen, Fiji is ready to compete with all the other tourism hotspots around the world.”
Beachcomber Island Resort owner Brendan Hannon was not available for comment when contacted by Islands Business.
The resort traces its roots back to the 1950s when it was founded by veteran local hotelier the late Dan Costello, who also started the equally well-known Beachcomber Cruises to complement the hotel business.
Costello, a descendant of the pioneering Costello family that came to Fiji in the early 1920s, was also a founding member of the Fiji Hotel and Tourism Association and remained a strong supporter of the development of Fiji’s tourism industry until his death in 2010.
At around that time too, Beachcomber Island Resort, which had quickly become a popular spot for young travellers, was bought by Hannon, who now also owns and operates Anchorage Beach Resort in the Mamanucas and Funky Fish Resort in Malolo.
Beachcomber Island Resort is about 30 minutes by sea from Port Denarau.
Fresh from a 10-day tour of Viti Levu - Fiji’s main island - our July cover story shares what we saw as Fijians adjust to the economic and social shocks brought about by the COVID19 pandemic. Employees of now-closed hotels and resorts who live in villages are falling back to subsistence farming and fishing. For the many more families who live outside these communities and who pay rent or mortgage in Sigatoka, Nadi and Lautoka, the adjustments are much harder. Relief offered by the Fijian Government like withdrawing their pensions while helpful, are temporary, and many are resorting to other means to earn income. They include 2014 Miss World Fiji, Charlene Tafuna’i who lost her job as an aircraft engineer at Nadi International Airport and is a regular at the VOTCITY Flea Market in Nadi. Thousands more do not qualify for pension withdrawals nor have the means to venture into business and this is where the work done by non-governmental organisations like the Foundation for Rural Integrated Enterprises N Development and the Then India Sanmarga Ikya Sangam in providing food packs and free school lunches respectively is life saving.
Buy your copy of Islands Business for the full photo essay.
Seeing Shain hold and play with her daughter, and you can tell that 4-year-old Sarah is her world.
Her job was another important part of her life at one time, until three months ago when that world came crashing around her. That’s when the COVID-19 pandemic prompted Fiji to close its borders to tourists, and Shain lost her dream job as a chef at an Asian restaurant, one of several at the 5-star Shangri-La Fijian Resort.
Shain can see Yanuca Island, where the resort is located, from the home where she stays with little Sarah, her parents and a younger sister.
Her community of Naidovi is actually a village of men, women, and young people who work in the hospitality sector. But now most of the residents there have either lost their jobs or are working reduced hours. One young man worked in the IT section at the Natadola InterContinental Resort. Their next door neighbour, who was trying to fix a leaking water pipe when we visited, used to work as deckhand on a game fishing charter boat.
For now, Shain and daughter Sarah are taking each day as it comes.
She had thought about applying for work, but knows no one is recruiting right now.
Her employer assists by sending $50 and a box of groceries every month to employees who have been sent home.
Her sister continues to work at a spa in Sigatoka town, but on reduced hours and pay.
"At the moment, we're trying to save whatever little we have rather than spending on things that are not useful," was her view when asked how she and her family has been managing this far.
Today the Fiji government will deliver its 2020-21 budget. This week we’ve been sharing the stories of Fijians affected by the COVID-19 shutdown.
While many Fijians have been able to access assistance through their savings with the Fiji National Provident Fund, their future looks precarious, and they will be waiting to see what the budget will mean for them tonight.