III. MECHANISMS FOR INTEGRATING ENVIRONMENTAL CONSIDERATIONS INTO ECONOMIC DECISION-MAKING

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B. Current economic decision-making process

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Fiji maintains a fairly centralized government system. The administrative arm of the government is divided into 16 ministries. Most ministries are arranged along sectoral lines, such as agriculture, commerce, health and education. Policy and planning input is mainly provided by CPO under the supervision of the Ministry of Finance.

CPO is expected to work with all ministries during the preparation of policy papers and the formulation of project proposals. It also assesses and provides endorsements of development projects proposed by the ministries. Recommendations from CPO are then submitted to the Cabinet for decision. The assessment and approval process for development projects proposed by the private sector is the responsibility of FTIB, under the supervision of the Ministry of Trade and Commerce. Once a public sector project is approved, its implementation is the responsibility of the ministry concerned. Thus the Macro Economic Committee, BCC and ACC exist to ensure better coordination of the project planning and budgetary processes, and to integrate macroeconomics policy-making into the central decision-making machinery of the government.

1. Policy formulation

The central decision-making machinery of Fiji is described in figure III. The ministries submit sectoral development policy papers requiring Cabinet approval to CPO for initial vetting. If those policy proposals have economic or financial implications the paper is first be considered by the Economic Strategy Committee. It may also be reviewed by the Policy Implementation Committee. Long-standing Cabinet guidelines require that the Minister of Finance comment on all papers with budgetary implications. In principal, CPO should work with each ministry in the development of policy papers but in practice it seldom does. Any policy paper prepared by the Department of the Environment would first have to be channelled through the respective parent ministry before being considered by CPO. Thus the Department of the Environment is far removed from the final decision-making forums and has no formal system of advocating and defending its proposals. The minister responsible for the environment is not a member of the Economic Strategy Committee.

2. Public sector project cycle

Government departments prepare project proposals for funding via the annual budget (funding can be either through government funding or external assistance). The proposals are submitted by the parent ministries to CPO for initial vetting. The recommendations of CPO are then passed on to BCC and then, if external assistance is requested, to ACC. A PSC representative sits on both BCC and ACC to consider the staffing implications of project proposals. The Macro Economic Committee makes recommendations on the total size of the budget that are fed into the deliberations of BCC. Approved projects become a part of the draft budget for the forthcoming year. The draft budget is taken by the Minister of Finance to the Economic Strategy Committee and then to the Cabinet. It is then approved in the November session of Parliament. Once the budget is approved the responsibility for project implementation is with the line government departments. CPO is expected to take a project implementation monitoring function, which it seldom performs.

The assessment and approval process for development projects proposed by the private sector is the responsibility of FTIB. However, only those projects requesting assistance under the Tax Free Factory scheme require FTIB approval.

The structure of BCC, ACC and the Macro Economic Committee have been in place for nearly 25 years. Those institutional arrangements have served Fiji well in terms of coordinating the project planning and the budgetary processes. It has also integrated macroeconomics policy-making, which is focused on short-term financial stability, into Fiji's public finance system. However, the structure provides no mechanism for mainstreaming environmental considerations. The Department of the Environment lies at the periphery of the project planning budget cycle, just as it does in the government policy-making process. The Department does not have systematic access to, or a system for, advocating or defending its position.

Figure III. Central decision-making machinery

As described by Siwatibau (1996), the current decision-making machinery which has been adopted by the government since the political events of 1987 reflects the necessity which arose from the economic situation that existed at that time:

After 1987, the government sought to obtain general consensus for its economic policies by holding National Economic Summits. A broad consensus on the strategy framework, in theory at least, was to be established by the summits that brought together political, business, trade union and community leaders. Environmental interests have not been specifically represented at the meetings. While the stated intention is to hold the summits annually, the last was held in 1994. Thus the arrangements are far from institutionalized, and in recent years planning and policy formulation has been more ad hoc in nature and dominated by short-term concerns of the government. Accordingly, the Economic Strategy Committee has again emerged as the key policy formulating committee.

As pointed out by Siwatibau, circumstances have changed much in Fiji since the Economic Strategy Committee was established to address the specific problems of rapidly falling reserves, evaporating bank liquidity, capital flight and loss of confidence among consumers and investors. National financial stability has been firmly re-established and the focus should shift more towards medium- and long-term development challenges. Thus environmental considerations need to be integrated into the process. Having short- to medium-term development policies and strategies creates a bias against the environment because it does not take into account the benefits of the environment protection which is visible only in the long term.

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