Thursday, June 03, 2010

Fiji: A toxic policy

Since overthrowing the elected government of Laisenia Qarase, Fiji's military regime has been dogged by suspicions that it was an "Indian coup", acting in the interests of the Indian business community to rob native Fijians of their land. The regime now looks set to confirm this by planning what it calls "land reform".

In Fiji, almost all land is owned collectively by indigenous Fijians, with everyone else forced to lease it. The result is an economic mess, with landowners lacking the capital, and leaseholders the incentive, for significant improvements (except near the end of a term, as a way of leveraging renewal - a "feature" which in turn discourages leases). Throw in a strong tradition of communal ownership, racial suspicion, and claims by the Indian business elite that land is being "wasted" - the classic justification in colonial societies for mass dispossession - and you have a politically toxic situation. The government's proposal seems to be for longer-term leases, of 70 to 90 years. But Fijians have already indicated through the market that they are not interested in this sort of de facto sale of their land. What's the regime going to do? Try and force them? Quite apart from being unjust, that is likely to result in things getting very unpleasant very quickly. People don't like having their land stolen. And forced long-term lease at peppercorn rents is as good as theft.

There is a solution to this long-term problem of underdevelopment, but it relies on capitalising landowners, not stealing from them. By going down this path, Fiji's military regime is confirming the worst suspicions of their opponents and inviting bloodshed. And that is not just wrong - it is a mistake.