CHAUDHRY RESIGNS, FIJI WITHDRAWS FROM REGIONAL MEETING IN

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E.O. 12958: N/A
TAGS: PGOV PREL FJ
SUBJECT: CHAUDHRY RESIGNS, FIJI WITHDRAWS FROM REGIONAL MEETING IN
NIUE


1. (U) Summary: Finance Minister Mahendra Chaudhry resigned from the
interim government (IG) on August 18 following weeks of speculation
that his head was on the chopping block for mismanaging the economy
and harassing overseas investors. However, Chaudhry's departure may
significantly diminish popular support for the IG. In a press
conference held that same day, interim PM Bainimarama announced that
he would not send a delegation or representative to Niue as a
protest against the refusal of the NZ government to grant visas that
would permit his party to participate in the Post Forum Dialogue
with 14 donors and partner countries in Auckland. End Summary.


Factors Behind Chaudhry's Resignation


2. (U) Finance Minister Chaudhry was increasingly under siege the
last few weeks. The Cabinet overturned two of his decisions,
including a controversial export tax he had championed on the
bottled water industry. The Reserve Bank's revision of Fiji's
negative growth for 2007 further downward to -6.6 percent of GDP
cast doubt on the effectiveness of Chaudhry's economic austerity
measures. The Executive Council of his Fiji Labour Party (FLP) met
Sunday and announced that the three FLP Ministers in the interim
government would resign to contest the next elections.
Interestingly, in a complete flip-flop, the FLP's president
characterized the draft Peoples Charter as a contentious document
that would require constitutional and legislative changes, and the
FLP called on Bainimarama to set a definite timetable for elections.


Re-assignment of Portfolios in Mini Cabinet Reshuffle


3. (U) Bainimarama announced that he will assume responsibility for
the Ministry of Finance while the Attorney General takes on the
Commerce, Industry and Tourism ministries. The minister for
Education will assume the Local Government and Labour portfolios.
The minister for Works will take on Public Utilities (energy and
water),while the Sugar Industry will go to the Primary Industries
minister. Bainimarama said that this is a temporary arrangement and
new ministers will be announced soon. Bainimarama said that he
would host a mini economic summit on September 5 and 6, the details
to be announced nearer the date.


Bainimarama Explains Fiji's Non-participation in Niue


4. (U) Bainimarama announced that Fiji would not participate in the
Niue PIF Leaders Forum due to New Zealand's refusal to grant visitor
visas to his delegation. NZ granted only transit visas.
Bainimarama claimed that this prevented Fiji from having bilateral
meetings with the 14 Post Forum Dialogue (PFD) Partners, which
include the European Union, United Nations and China, India, United
States, Canada, France, Indonesia, Italy, Japan, Korea, Malaysia,
Philippines, Thailand, and the United Kingdom). The PIF has
organized the PFD bilaterals for Auckland on August 23; only the PFD
Plenary is scheduled for Niue the preceding day.


5. (U) Bainimarama told the media that he was very disappointed with
the report of the PIF Ministerial Contact Group (MCG),which visited
Fiji in June. He said that Fiji would decide its own destiny for
itself, rather than have it imposed from without. Bainimarama also
released to the media his speech prepared for the Forum. In the
draft speech, Bainimarama says that Fiji's relationship with the
Forum is now at a cross-roads, if not an impasse. He characterizes
the PIF demand for elections as inflexible and says that he was
compelled against his will to agree to the March 2009 date at the
Tonga PIF in 2007.


6. (U) Bainimarama also attacks Australia and New Zealand for
helping to fund the 2001 general elections against the ruling of the
Court of Appeal in the Chandrika Prasad case, which held Chaudhry
was still the legal Prime Minister. This contradicts his affidavit
in another constitutional case before the 2001 elections where he
said that he could not restore the Chaudhry government because of
national security issues. It also contradicts Chaudhry's affidavit
in the same case in which Chaudhry said that he preferred to have
elections rather than to be reinstated.


7. (U) Bainimarama reiterates no elections in March 2009 and insists
that electoral reform must take place first. He accuses the MCG,
and in particular NZ FM Winston Peters, of "selective rather than
active listening." Bainimarama says that if the PIF leaders decide
to endorse the MCG report, and insist on elections in March 2009,
then he will tell the people of Fiji to prepare for more sanctions
and international isolation as Fiji will "pursue its own way." In
the draft speech, Bainimarama insists that Fiji will have a new
electoral system and that the PIF must not continue to "mollycoddle
continued extremism and racism in Fiji." He says that even if the
Forum will not assist, his government will continue on its roadmap,
seeking assistance from outside the PIF and the Commonwealth, if
necessary.


8. (U) In his media conference on August 18, Bainimarama repeated
that Fiji will not have elections in March 2009. He said that
consensus for electoral reform must be reached at the Presidents
Forum to be convened by former NZ Governor General and Fiji
Constitution Review Commissioner Sir Paul Reeves, who has been
talking to Fiji's political leaders for some time on behalf of the
Commonwealth, which suspended Fiji because of the 2006 coup.
Bainimarama said that the Electoral Commission will need 12-15
additional months after completion of the reform process to prepare
for elections. He said Fiji's leaders must first agree on the
electoral reforms before setting a date for elections.


Reaction


9. (U) In an August 19 radio interview, deposed PM Qarase said his
SDL party will not approve electoral reform unless it is enacted by
a Parliament, since this requires Constitutional amendment.


10. (U) Bainimarama's decision to avoid the PIF Forum in Niue was
ill-received by regional leaders, notably NZ PM Helen Clark and
Australian PM Kevin Rudd, who had a bilateral meeting in Auckland on
August 18 before flying to Niue for the PIF. Fiji continues to
remain a challenge for the PIF which has never suspended a member
country before. The Commonwealth Secretary General is in Niue and
in a radio interview on August 18 said that he would encourage Fiji
to hasten its return to democracy. He acknowledged the work in Fiji
of Commonwealth envoy Sir Paul Reeves, as well as the PIF
initiatives including the Ministerial Contact Group, but noted that
the Commonwealth, like the EU, would be guided by the PIF Leaders'
decisions on Fiji.

Comment


11. (U) The FLP may be disengaging in anticipation of a court
ruling against the constitutionality of the 2006 coup and the
interim government. The FLP represents some 37 percent of the
population. Its exit from the Cabinet could significantly diminish
popular support for Bainimarama and the interim government. It is
already unclear how Bainimarama will get consensus on electoral
reform when opposition to the Charter is gaining steam. The NFP,
UPP and SDL leadership continue to condemn it and the reforms it
proposes.


PRUETT