Experts predict rebound for Fiji's economy in wake of cyclone

WELLINGTON, New Zealand - The cyclone which tore through Fiji two weeks ago, killing 43 people, was so powerful that at the Namena Island Resort, it ripped out a commercial oven and tossed it half the length of a football field.

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Manager Nigel Simpson said there's almost nothing left of the small diving resort. The six guest houses are gone, and heavy equipment like generators and compressors simply vanished in winds of up to 285 kilometres per hour. Worst of all, Simpson fears Cyclone Winston might have smashed up the coral reef which attracts tourists to the island, although he's yet to investigate underwater.

The cyclone not only demolished thousands of homes, it also tore at the fabric of the South Pacific nation's economy. Apart from tourism, which accounts for one-third of GDP, it also wiped out a significant chunk of the sugar crop, another big source of foreign income.

Fiji's government has put the initial damage estimate at about 1 billion Fijian dollars ($472 million), equivalent to about 10 per cent of the economy. Yet experts and officials say that while many of Fiji's subsistence farmers and workers are facing tough times, they don't expect the cyclone's impact on the larger economy will be major or long-lasting.

That's because, unlike Namena Island, most tourist resorts were not directly in the cyclone's path and escaped major damage. Government infrastructure in the capital Suva was also spared, and aid money and rebuilding work will provide economic stimulus.

Home to 900,000 people, Fiji is one of the most developed Pacific island nations. Yet the annual GDP per person is only about $9,000, and about 30 per cent of people live in poverty.

Before the cyclone, the economy was growing at a healthy 4 per cent annual clip. Attracted by sunny beaches and a relaxed way of life, some 700,000 tourists visited last year. In the month before the cyclone hit, tourist numbers set a new record for a January.

Just how many tourists will cancel trips or elect not to go because of the cyclone remains to be seen. The winds hit before the peak tourist season of June through October.

Caroline Currie, the regional head of economics at the Asian Development Bank's Fiji office, expects the overall economic impact to be moderate and temporary.

"What's really devastating, though, is the loss of homes and subsistence lifestyles," she said.

Particularly hard-hit are the estimated 200,000 people who rely on the sugar industry: farmers, cane-cutters, mill workers, people in related industries, and their family members.

Abdul Khan, the executive chairman of the Fiji Sugar Corporation, which processes all of Fiji's sugar, said about half of this year's crop of 1.2 million metric tons of sugar cane on the main island of Viti Levu was destroyed, costing farmers about $23 million.

Most of the 650,000 metric tons on the island of Vanua Levu survived.

The storm damaged three sugar mills on Viti Levu, but they should be able to cope with the reduced harvest, which takes place from May through early July, Khan said. He said officials will distribute emergency aid for the many farmers who will be left without an income this year.

To attract tourists back, industry leaders will launch some new packages next week that will include accommodation and flights on the national airline, Fiji Airways, said Attorney-General Aiyaz Sayed-Khaiyum.

"There'll be some good deals for tourists," he said. "The reality is that Fiji is quite resilient, and those resorts that were affected will be up and running soon."

Just over half of Fiji's tourists come from Australia and another 17 per cent from New Zealand. Some high-end resorts rely on wealthier Americans and Europeans.

One of those places is the Namale resort and spa, where North Americans make up about two-thirds of the guests. Bill Keefe, who manages the 250-acre resort with his wife Nowdla, said the storm wrecked the electricity supply and telephone lines and downed hundreds of trees, forcing them to close.

Most of the resort's buildings withstood the winds, though, and its 150 staff are clearing debris with backhoes and chain saws, rather than waiting tables or cleaning rooms.

"It's been all hands on deck. Nobody was forced to shift over, but I don't think we've laid anybody off," Keefe said. "They've put on their work gloves and shoes; it's pretty remarkable to see."

The resort is scheduled to reopen April 1. Keefe could open sooner, but wants everything to be perfect since the first reviews posted on TripAdvisor and other social media will be crucial in giving tourists confidence that Fiji has recovered.

Most resorts in popular places like Denarau Island and the Coral Coast weren't much affected and are already up and running, said Damend Gounder, who chairs the Tourism Action Group, which was activated after the cyclone.

But Simpson, manager of the Namena Island Resort, says he's unsure if he'll ever reopen.

He's sad but thankful the dozen staff who stayed during the storm survived.

"Fiji is still happy, even though we've been through terrible times," he said. "Even though there's not enough food on the table, even though there's not enough drinking water, everybody is happy. The aid is coming in. Everyone is still smiling."



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