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EU warns Fiji aid could dry up if it delays democracy

Fiji could lose F$274 million (US$170 million) in EU funds for restructuring its ailing sugar industry if the military-backed government delays returning the country to democracy, the bloc warned yesterday.

The funding, already approved by the European Commission, will only be available if Fiji's interim government sticks to its commitment to return to democracy by March 2009, said Roberto Ridolfi, head of the EU's delegation in the Pacific.

"This is on hold until the interim government complies with the commitments made at the talks" between the EU and Fiji in Brussels last month, he told reporters.

Military leader and interim Prime Minister Commodore Frank Bainimarama has cast doubt on the 2009 timetable to return civilian rule following his coup last December, saying his administration would only "review" its plan to stage elections in early 2010.

The regime had been hoping that despite the coup, the EU would release some funds shortly. Yesterday's announcement has stalled the process.

No immediate response to Ridolfi's comments was available from Bainimarama's government.

Ridolfi said the EU has confirmed an allocation of F$132.6 million for this year through 2010 to help Fiji's sugar industry diversify and put in place measures to cushion the impact of falling sugar prices.

A similar amount has been earmarked for 2011 through 2013.

Another F$8.9 million for replanting sugar cane, research and extension services has been approved but not signed, he said.

"If Fiji delays this [election] process after three years, then the second allocation could be refused," Ridolfi said.

Another F$44 million in aid-project funding would also be affected, he said.

Sugar is Fiji's second-biggest export earner and supports one in four of its 900,000 plus citizens.

It urgently needs capital to restructure as the EU moves to cut prices it pays to the 18-country African, Caribbean and Pacific group of small sugar producers.
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