It places heavy reliance on the RBF, which is under military pressure to produce optimistic forecasts. Forecasts are based on Bureau of Statistics figure which are out of date, no doubt due to military pressure on statistics through the Bainimarama connection.

"The outlook on Fiji reflects stability in near-term external pressures, says Melbourne-based rating agency Standard & Poors (S&P). " Stability in "external pressures" or stability in Fiji?

Does this mean international sanctions are unlikely to change?

"And it says that a fuller recovery in the tourism sector should underpin an improvement in the country's largest position."

Agreed, but where is the recovery of the tourism ? Numbers are artificially boosted by deep discounts. Where is the profit? At this point recovery in the tourism sector is wishful thinking.

"However, S&P's credit analyst Kyran Curry said the ratings could be downgraded if political pressure and a weak environment for conducting business intensified. "

In other words, it is uncertain and therefore a risky conclusion.

"He said this would lead to a worsening outlook for tourism and consequently public finances and external imbalances. "

Is this good?

"Conversely, an upgrade would require a marked improvement in external imbalances. This would require a return to normal levels of tourism numbers, with a likely condition for this being the lifting of adverse travel advisories," Curry told Fijilive.

In other words, Fiji's rating is mediocre and recovery depends on things that are unlikely to happen because of the military dictatorship situation.

Fiji's credit rating was revised to stable from negative in November last year.

This is a credit to Narube who may have done well under very trying circumstances, but as they say later, the data is suspect and controlled by a Bainimarama. It is hopelessly out of date, and most likely any projections are based simplistic and overly optimistic (wishful thinking) tourism forecasts base on numbers rather than revenues and profits.

"The ratings on Fiji reflect some stabilisation in the country's external position, although significant pressures remain," Curry said.

As I said, this is a credit to Narube, not Voreqe.

"Complicating analysis of Fiji's credit quality are significant data deficiencies. After contracting by 6.6 per cent in 2007, Fiji's economy is officially expected to grow by 1.7 per cent in 2008 due to a revival in tourism and improved prospects for the forestry, fishing, and mineral water sectors," he said.

These figures are straight out of the RBF who get them out of the Bureau of Statistics, which is suspect.

Curry said the external position seemed to be stabilising and reserves continued to build slowly (currently about US$580.4 million), reflecting foreign exchange controls and weaknesses in the domestic economy.

Weaknesses?

He said officials in Fiji had relaxed some foreign exchange controls, but reported falls in remittances flows and rises in oil prices were likely to leave Fiji's external position under pressure.

Why are remittances falling?

He added the Fiji dollar appreciated 1 per cent against the US dollar over the year to September this year.

That is good, but it does not help tourism, which is what underlies the positive aspects of this S&P evaluation.

"High oil and food prices pushed annual inflation to a 10-year high of 7.5 per cent in 2008," Curry said.

Is this good?

He said sound economic potential in tourism and allied industries and strong human capital subsequent to a good education and health system, would strengthen Fiji's ratings.

Great, except that the health system is obviously floundering, and education just had its budget cut by $26 million to support the negative productivity school leavers in the army. So what is being supported, investment in human resources, or a welfare program for school leavers to cover up the fact that there are few jobs in the productive economy?

What would weaken it though, he said were political pressures, which weigh on economic growth outlook and the external position; narrowly based economy with problems in the sugar and garment industries; and data deficiencies largely on the external side.

In other words, there are lots of unknowns in the current rating, and it depends on many things which may or may not happen. Risky at best.

Stable does not mean dynamically growing.
S&P is very conditional, and the is no doubt because their ownly information is from official sources, and it is not their job to inquire into those sources. They mentioned the paucity of data.
There are lots of safety valves in an economy. Firms don't just close up becuase things are not doing well one quarter. They absorb the loss in hopes of a better future. That is what the hotels are apparently doing. They might even be breaking even. But in the longer run, they have to make at least as much profit in Fiji as anywhere else.

It is not an endorsement. No way. It is wait and see caution, but optimistically things could pick up. I would imagine that is the line Narube has to take given the military intimidation. He is not going to lie either way, but the truth about the economy can be stretched in either direction when there is a lot of uncertainty. The dictatorial government violating the Constitution makes things doubly uncertain.