July 24, 2008

By Michael Field

Fiji's military regime has re-asserted power in a battle with its finance minister over a tax on exports of designer bottled water.

In a crisis air coup leader Commodore Voreqe Bainimarama, who seized power in a December 2006 coup, summonsed his Military Council and called in Finance Minister Mahendra Chaudhry to demand he withdraw a tax on bottled water or resign.

In the midst of it all, the commodore took a swing at Prime Minister Helen Clark, saying she was trying to get Mr Chaudhry appointed as prime minister.

``I don't know why there have been talks of the resignation of Mr Chaudhry when Helen Clark wants him to be the next prime minister,'' the commodore told local radio.

Earlier this week Ms Clark speculated that the commodore wanted to take over the presidency from incumbent Josefa Iloilo and appoint Mr Chaudhry as prime minister.

Yesterday's saga underlines Fiji's fragile political scene which opened this month with the commodore announcing he would not keep to his promise to hold democracy-restoring elections by next March. He gave no new date.

Then he revealed he had paid himself F$184,740 (NZ$164,686) in lieu of 698 days of leave. He said he had not taken leave since 1978 because there was no one else to carry out his duties.

The military regime suddenly looked vulnerable this week after a long running battle with bottled water producers climaxed around a 20 cent per litre tax on bottled water.

Fiji earns around F$180 million a year from bottled water exports but on Wednesday the biggest producer, US owned Fiji Water, closed its plant and sacked its 420 staff, most of them indigenous Fijians.

Commodore Bainimarama's regime is perceived locally to favour Indo-Fijians who make up around 35 per cent of the population.

Mr Chaudhry, who was prime minister in 2000 until overthrown then in the George Speight coup, single-handedly insisted on the water tax despite widespread opposition. 

When news of Fiji Water's closure hit, the commodore called an emergency meeting with military appointed Attorney General Aiyaz Sayed-Khaiyum.

He later revealed he tried on Wednesday night to get Mr Chaudhry to the meeting. 

``I have not been able to get in touch with him. He had his phone off. But I tried to relay a message across to him that the Attorney General and members of the Military Council were going to sit in and talk to the bottling companies.'' 

The commodore and the attorney general scrapped the tax.

Commodore Bainimarama called Mr Chaudhry to his home saying he he had done so only because the air conditioning at his office was too cold and ``because I'm not well''.

He said he had informed Mr Chaudhry that his tax on water had been scraped the night before and that he would have to write a paper to an emergency session of cabinet that would endorse the abolition.

The commodore said he had also brief the Military Council on the action.

No formal statement was made by the parties but Mr Chaudhry told the Fiji Times Online resignation speculation had come from ``my critics and the western and international countries''.

Fiji Water is the second-biggest imported bottled water in the United States after Evian of France.

It is owned by Roll International, which is controlled by one of Hollywood's richest couples, Stewart and Lynda Resnick, who made their fortune with Teleflora and owned memorabilia manufacturer Franklin Mint.

Fiji Water welcomed the scrapping of the tax and said its Fiji plant would reopen immediately.

``They did the right thing at a very critical time for Fiji,'' official David Roth said.

Copyright: Michael Field