Fiji feels economic pain

George Speight says he has indigenous Fijian support

Fiji's hostage crisis may be over, but its economy remains in turmoil.

The country's once flourishing tourism industry is in ruins.

Several holiday resorts have been seized by landowners - some wearing balaclava caps and wielding cane knives - supporting the coup leader George Speight

Anti-Speight demonstrations in Australia

Australia and the United States have urged their nationals to leave Fiji and hotels are reporting that their occupancy rate has fallen by 90%.

Thousands of ethnic Indians, who make up the much of the country's business class, are also expected to leave.

Threat of sanctions

Several western countries have threatened sanctions if Fiji turns its back on democratic and constitutional government.

In the words of the United States, the concessions made to George Speight fly in the face of international norms and standards of democracy.

But there is uncertainty as to what sort of action to take.

Australia - Fiji's biggest trading partner - has drawn the line at trade sanctions.

"If you impose very severe economic sanctions you end up hurting many of the people who you are trying to help," said Australian Prime Minister John Howard.

Sanctions are more likely to be aimed at isolating Fiji by cutting or reducing diplomatic and military links.

New Zealand, the second biggest importer of Fijian goods, has imposed sporting sanctions on Fiji.

The country will also suffer from a cutback in international aid.

The Commonwealth has suspended it from meetings and decision making bodies. Fiji has only just been allowed back into the Commonwealth, after it was suspended following two military coups in 1987.

But Western officials are not confident that sanctions will produce a rapid change of policy.

George Speight has a lot of popular support, and for now Fijian nationalism holds the upper hand.

Economic battering

Before May, Fiji's economy had been doing well. The sugar crop - by far the country's biggest export earner - had recovered from disastrous harvests, the result of a drought in 1997 and 1998.

A soldier patrols a roadside market: Economic activity has already been badly disrupted

Earnings and investment in the tourism industry had grown by more than 10% in each of the last two years, and unemployment was falling, incomes rising.

But both the sugar harvest and the tourism industry have suffered in the last few weeks.

The Fiji Visitors' Bureau said the tourism industry was losing F$1.33m (US$611,000) a day due to the unrest.

And if the Indian community - the main cultivators of sugar - is intimidated into leaving, or simply decides to cease economic activities for a time, the result would be disastrous.