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TRANSCRIPT
1
Launch of
The Report of the 2008-09 Household Income and Expenditure Survey
A few key findings
Professor Wadan Narsey
School of Economics (FBE)
The University of the South Pacific
(currently on leave at Kagoshima University)
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A presentation from
Kagoshima University Research Center for Pacific Islands
Kagoshima University
Japan
with thanks to the Director KURCPI (Professor Shinichi Noda),
Professor Kuwahara and support staff (Ms Kusumoto) for the use of the
KURCPI facilities for this recording.
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To launch
.
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Welcome
Chief guests
Mr Timoci Bainimarama (Government Statistician)
Ms Judith Robinson, Ms Sarah Goulding, Margaret Logavatu
(AusAID)
University colleagues, students, ladies and gentlemen
Thank you for attending this launch of the 2008-09 HIES.
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Presentation: a few key results and policy implications
Acknowledgements
Value of the 2008-09 HIES: first time comparisons possible (with 2002-03)
Average Household Incomes in Fiji (area, region, ethnicity)
Food security (home consumption, main dietary items, junk food, narcotics)
Expenditure components: interesting items with policy implications.
health
education
Report has others bits and pieces
6
Acknowledgements
FIBoS Household Survey Unit processed and edited the data.
- Mr Epeli Waqavonovono (Chief Statistician)
- Mr Toga Raikoti (Principal Statistician)
- Mr Serevi Baledrokadroka (Principal Statistician)
- all the support staff at HQ and in regional offices.
AusAID for funding the data analysis and writing of report
Kagoshima University Research Center for Pacific Islands for providing a
peaceful environment to complete the writing of the Report.
USP for the sabbatical leave, part of which I have used to complete the report.
FBE (Professor Biman Prasad) and School of Economics (Dr Sunil Kumar and
Ms Bhavna Ram) for organizing the launch of this Report.
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Importance of this 2008-09 HIES
1. From Bureau’s point of view: two main objectives
- to rebase CPI weights and assist with national accounts
- to assist policy makers with key stats on incomes and expenditures
at the national level, throughout Fiji
2. These HIES are genuine representative national sample, well administered
survey; with data generally superior to that derived from any academic study.
3. Changes in household incomes and expenditures:
- important base indicators of standards of living (MDGs)
- changing patterns of food consumption: food security crucial
- “new expenditures” like mobile phones
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First: macro picture: Fiji’s GDP (constant prices) (Index Numbers)
GDP: Total Income produced domestically increased to 2006; followed by
decrease thereafter (collapse of the sugar industry, collapse of loans to
agriculture)
But 2008-09 level still better off in aggregate than 2002-03.
GDP (Constant Prices) (Index Numbers)
(2002=100)
100
105
110
2002
2003
2004
2005
2006
2007
2008
2009
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Gross Domestic Product per capita (constant prices)
(Index Numbers)
With growing population, decline in GDP per capita more severe after 2006.
By 2008-09, still slightly above the levels of 2002-03.
GDP per capita (Constant Prices)
(Index Numbers)
100
105
110
2002 2003 2004 2005 2006 2007 2008 2009
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GDP does not include Foreign Remittances
Remittances have been very large: $300 million in 2006, more than sugar earnings.
Remittances rose in real terms to 2006; declined to 2007 and 2008, before rising again in
2009. i.e. strongly counter-balanced the impact of declining GDP per capita.
Gross National Income includes remittances: look at GNP per capita.
Remittances ($million) (2002 prices)
100
200
300
400
2002 2003 2004 2005 2006 2007 2008 2009
$ m
illion
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Gross National Income pc (current international $) (recent WB data)
Remittance money kept pushing GNI pc up till 2008
Then clear decline thereafter till 2010.
Will see below: remittances (foreign and local) have saved Fiji households./
Gross National Income pc (current international dollars)
Index Numbers: 2002 = 100
100
105
110
115
120
125
2002 2003 2004 2005 2006 2007 2008 2009 2010
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Total Household Incomes:
20% real increase in aggregate, But...
Driven by real increase of 44% in urban households total income.
-10% decline in total rural HH incomes
Rural share (bottom row) declined by 25% from 44% to only 33%.:
Estimated Total Household Income ($m)
Area 2002-03 2008-09 % Ch. Real % Ch.
Rural 884 1004 14 -10
Urban 1115 2044 83 44
All 1998 3048 53 20
% Rural 44 33 -25
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Average Household Incomes? small rise of 7% for Fiji
(in real terms: i.e. adjusting for CPI inflation of 27%)
While urban households average income improved (by +19%)
There was a real decline of -13% in Rural areas (purple shading)
The Rural: Urban gap (green) in Av.HH incomes widened further
from -31% to -50%:
i.e. must expect rural:urban drift to continue and worsening of service provision
in urban areas for water, sewerage, education, health and environment.
Policy implication: MUST prioritize rural development
Average Household Income ($)
2002 2008 % ChangeReal % Ch.
Rural 10559 11608 10 -13
Urban 15267 23036 51 19
All 12753 17394 36 7
Rural Gap -31 -50
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Average Household Incomes (ethnicity): political issue for decades
Fijian and Indo-Fijian Av.HH Income changed by same 3% in real terms
Others increased by 41%.
Fijian:Indo-Fijian margin remained the same at +9%.
But for majority of households in Fiji: no ethnic divide between the two major
races.
Average Household Income (ethnicity)
Ethnicity 2002 2008 % Ch. R % Ch
Fijian 12972 16994 31 3
Indo-F 11902 15537 31 3
Other 19105 34197 79 41
FIJI 12753 17394 36 7
%(F-I)/I 9 9
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Ethnic shares of Total HH Income: political implications?
Usual focus is on relativities between Fijians and Indo-Fijians:
Indo-Fijian share has declined by -16% to just 36%
But only small 4% increase in Fijian share to 53% (still majority of total Inc.)
Largest increase of 72% has been to Others, who have received the bulk of the share
lost by Indo-Fijians, rising to 11% of Total HH Income.
Overall shares of income similar to shares of population.
Ethnic Shares of Total HH Income
Ethnicity 2002 2008 % Ch.
Fijian 51 53 4
Indo-F 43 36 -16
Other 7 11 72
FIJI 100 100 0
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Ethnic Poverty Result (from Preliminary Report)
Both major ethnic groups are equally poor.
According to both the 2002-03 HIES and the 2008-09 HIES
Policy implication of these four slides:
eliminate ethnic biases for national sharing of resources and poverty alleviation
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But note: Indo-Fijian households are smaller than Fijian
Because Fijian households larger than Indo-Fijian (Fijian couples have more
children) by more than 20%
Indo-Fijian households are still decreasing in size (-9%) faster than Fijians (-
5%)
The size gap has increased from 21% to 27% (green)
Which means that Income per Adult Equivalent for Indo-Fijians is higher.
Av. Household Size
Ethnicity 2002 2008 % Ch.
Fijian 5.4 5.1 -5
Indo-F 4.4 4.0 -9
FIJI 4.9 4.7 -5
%(F-I)/I 21 27
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Hence living standards of Indo-Fijian households better than Fijian
HH Income per Adult Equivalent is good indicator of standard of living,
because it adjusts total household income for household size
Fijian households have lower HH Income per Adult Equivalent than Indo-Fijian
households and the gap is growing from -5% to -8%.
This also affects expenditure on education, health, durable goods, mobiles etc
Policy: Put “family planning” back on the agenda for indigenous Fijians.
HH Income per Adult Equivalent
Ethnicity 2002 2008 % Ch. R % Ch
Fijian 2958 3995 35 6
Indo-F 3108 4341 40 10
Other 4628 8747 89 49
FIJI 3094 4389 42 12
%(F-I)/I -5 -8
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Worrying Changes in Income Sources (2002-03 to 2008-09)
Households saved by Remittances, Gifts and Other Incomes.
Incomes from Income Sources ($m)
Data 2002 2008 % Ch. R % Ch.
Wages Permanent 851 1344 58 24
Wages Casual 228 294 29 2
Agricultural Business 197 216 10 -14
Commercial Business 145 126 -14 -32
Home Consumption 151 158 4 -18
All Remittances/Gifts 84 259 206 141
Other Income 342 652 91 50
Total Income 1998 3048 53 20
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Simplifying previous slide: Decline in “productive” sectors
“Productive” parts of the economy (Agriculture, Commerce, Subsistence) saw a
large 34% decline in share of Total HH Income to a mere 16%.
While Other Incomes increased by 40% from 21% to 30%.
Policy issue: Must refocus national development efforts on productive sectors.
Contentious policy issue: restraint of formal (public) sector incomes
(not the low casual wages) during national downturn.
Broad shares of Total HH Income
Data 2002 2008 % Ch.
Wages and Salaries 54 54 0
Ag/Commerce/Subsistence 25 16 -34
All other receipts 21 30 40
FIJI 100 100
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Good news for indigenous Fijian households: real 20% increase
Plus also:
Increase in Agricultural Business incomes: 16%
Increase in Commercial Business incomes: 22%
Increase in Permanent Wages: 26%
But worrying: significant decrease in Home Consumption (-14%).
Indigenous Fijians: Income sources
2002 2008 % Ch. R % Ch
Wages Permanent 437 700 60 26
Wages Casual 92 116 27 0
Agricultural Business 108 159 47 16
Commercial Business 43 66 55 22
Home Consumption 124 135 9 -14
Others 214 435 103 60
FIJI 1018 1611 58 25
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Bad news for Indo-Fijian households on production front
Policy area 1: Revival of sugar industry
Policy area 2: Revival of investor confidence through
elimination of political uncertainty
removal of legal decrees on media censorship, expropriation of
private property, and breaches of contract
Indo-Fijian Income Sources
Data 2002 2008 % Ch. R % Ch
Wages Permanent 341 492 44 14
Wages Casual 126 165 31 3
Agricultural Business 84 52 -38 -51
Commercial Business 95 58 -39 -52
Home Consumption 22 14 -36 -50
Others 183 313 71 35
FIJI 850 1094 29 1
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Interesting results for Foreign Remittances
Both 2002-03 HIES and 2008-09 HIES estimates are low:
But in 2008-09, Indo-Fijian households receiving almost as much as Fijian
While Others even larger (but may be result of statistical outliers)
Key Policy Area: urgent need for national effort to increase remittances
through trade negotiations and export of labour :
- PACER Plus, EPAs, US/Canada
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Expenditure components
Comparisons between 2002-03 and 2008-09 generally not feasible as
substantial changes in definitions of major divisions.
Some major items possible and are compared in the Report.
However rural/urban comparisons useful for 2008-09.
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Major expenditures (2008-09): rural:urban differences
39% of Rural Expenditure is on Food, as opposed to only 20% of Urban
But Urban expenditure on Housing/Utilities/Imputed rent is almost twice (23%)
as rural households (14%)
Urban households spend some 9% on education and health compared to 6% of
rural households
But rural:urban expenditure almost the same on Transport and Communications.
Main Expenditure Items Rural Urban All % Dif
Food Cash 22 18 20 -18
Own Consumption 16 1 6 -92
Total Food 39 20 26 -49
Housing/Utilities/Imputed Rent 13 23 20 77
Transport/Communication 12 14 13 11
Education/Health 6 9 8 61
ALL 100 100 100
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Food security issues: Real Exp. pAE on Food
declined in rural areas
Real Rural Exp. pAE declined by -6% (Food price inflation of 42.5%)
While there appeared to be no change in urban areas.
Policy research question: might this real reduced expenditure on food in rural
areas be associated with increasing malnutrition in particular groups?
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Declining Importance of Home Production/Subsistence
Real decline in Home Production in dollar terms (see Table D.1.3)
But significant decline as a percentage of Food in rural areas
i.e. overall food self-sufficiency declined by -30%.
With rural food self-sufficiency declining by -20%.
Policy: critical to renew emphasis on home production of food,
in both rural and urban areas
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Reduced consumption of local carbohydrates
Consumption depends on tastes, advertisements, prices (note the last column).
Large declines for cassava and dalo
Large nominal and real increase for flour, bread and noodles (all imported).
Large nominal increase for rice (imported), with huge 98% increase in price.
Exp. $ per Adult Equivalent per year, on Carbohydrates
2002 2008 % Ch. R % Ch. Price Adj.
Cassava 52.23 64.23 23 -10 1.37
Dalo 37.56 37.95 1 -32 1.49
Potatoes 13.09 15.31 17 -25 1.57
Rice 40.29 70.36 75 -12 1.98
Flour 39.96 56.66 42 11 1.27
Bread 17.12 54.87 220 156 1.25
Noodles 9.76 17.40 78 43 1.24
Food Tot. 854.36 1176.62 38 -3 1.43
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Meats: decline in Fresh Fish consumption, increase in Tin Fish
Fresh fish saw a decline of -8% in real terms
Large real increase of 33% for tin fish (mostly imported) (note: only 7%
increase in price)
Chicken (imported inputs) also saw a very large 20% increase in consumption
Lamb (imported) a real decline of -15% (largely because of increase in price).
Fresh Fish pAE pa
2002 2008 % Ch. R % Ch.
Fresh Fish 52.52 67.92 29 -8
Tin Fish 24.32 34.62 42 33
Chicken 41.11 61.95 51 20
Lamb 21.32 24.94 17 -15
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Small summary, food expenditure on imported items increasing
That on local items decreasing
Expenditure on major local items: increase of 27%
(cassava, dalo, fresh fish, chicken)
Expenditure on major import items: increase of 65%
(rice, flour, bread, noodles, tin fish, lamb)
Above items comprise more than 40% of total food expenditure
Need to examine total food consumption
Key Policy areas: Need innovative policy (revolution) for increasing local
food consumption of local root crops and more nutritious fresh fish
- not just about increasing agricultural and fisheries production, BUT ALSO
- how change tastes
- how provide encouraging infrastructure for marketing
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Junk Food Snack Food Expenditure per child: Good news and Bad
(only diary records, not Pocket Money)
The decline of -12% for sugary snacks/drinks: Good News;
The increase of 33% in bongoes/twisties etc: Bad News.
Policy implication: must consider
* restrictions on advertisements;
* restrictions on sports sponsorships associated with undesirable snacks
and drinks etc.
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Junk food expenditure: problem for Indo-Fijians
Junk Food Exp. per child for Indo-Fijians is more than twice that for Fijians.
Between the two HIES, the margin increased further from 125% to 208%.
Why? High household disposable incomes? Impact of advertising?
Policy research area: why such high Indo-Fijian consumption
Policy application: Indo-Fijian focus of education campaign
Snack Expenditure per child ($ pAE pa)
2002 2008 % Change
Fijian 50.97 43.08 -15
Indo-F 114.52 132.68 16
Others 107.4 87.76 -18
Fiji 82.07 75.42 -8
%(I-F)/F 125% 208%
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Narcotics: Good News (alcohol and tobacco) and Bad News (kava)
Good: Tobacco: -15% reduction in nominal dollars, larger in real terms
Good news: Alcohol: 4% increase nominally, but probably negative in real.
Bad: Yaqona has gone up by 14%, now largest narcotic by spending
See Report: Indo-Fijians now consuming more yaqona per adult than indigenous
Fijians: excessive consumption at weddings and funerals.
Per Adult Consumption pa ($)
Area 2002 2008 % Ch.
Alcohol 17.47 18.08 4
Tobbaco 22.89 19.54 -15
Yaqona 22.89 26.15 14
Total 63.25 63.78 1
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Policy Implications
Continued pressure on tobacco products: taxes, advertisements.
New policies for discouraging alcohol consumption
- ban on advertisements
- ban on sports sponsorships
Research on reasons for heavier Indo-Fijian narcotics consumption
Need to put increasing kava abuse on the national agenda for all groups.
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Health Expenditure: real reduction in aggregate
In aggregate real reduction of -17%
As Perc. of Total HH Expenditure: reduction of -30%.
Only real increase being for health insurance.
Policy questions: are reduced expenditures due to hardship?
Is increased expenditure on health insurance due to decreasing
confidence in public health services?
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Some communications expenditure
A quite extraordinary development is that some 91% of all households in Fiji
have some communication medium:
- 97% of urban hh
- 86% of rural hh
While 94% of urban hh have expenditure on mobiles
72% of rural households also do.
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Communications Expenditure per hh (2008-09)
Fiji: Aver. hh expenditure on mobiles ($334) was twice that on land lines ($158)
Urban still more than twice that in rural areas, both on a per hh or pc basis.
Policy (given importance for education of children and adults):
low rural expenditure per hh on internet (a mere $3) and in Fiji as a whole
(only $32): compare with expenditure on mobiles.
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Recreation, culture and sports (2008-09): large rural gaps
Large expenditures on electronic entertainment, and Pay TV
Low expenditures: computers, book, sports.
Policy: sports expenditure: rugby, soccer, netball: starved for funds
(Huge national impact of Japanese women win World Cup in Soccer)
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Education: largest increase at tertiary levels
Tertiary expenditure rising from 57% of total private household education
expenditure in 2002-03 to 63% in 2008-09.
Policy: While official poloicy focuses on free primary and secondary
education, just as urgent need for the poor will be at tertiary levels
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The 2008-09 HIES Report also has tables, with some interesting
results on household durable goods and services
Cars and trucks
Fridges
Computers
Videos and TV
Washing machines
Brush cutters
Outboard motors
Phones (land and mobiles)
Cooking and lighting methods
Water sources
Toilet types
BUT the 2007 Census will have more accurate data on these than the HIES.
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The earlier Preliminary Report on Poverty and Incomes
Preliminary Report on Poverty and Household Incomes in Fiji. FIBoS. 2010.
- published and launched last year at USP.
Had statistics on the incidence of poverty, poverty gaps (poverty alleviation
resources required) and income distribution issues.
This 2008-09 HIES Report is supplementary to the Preliminary Report
This HIES Report updates some of the poverty statistics.
But no significant changes to the results in the Preliminary Report.
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Thank you
Comments.
All questions will be answered by FIBoS staff