Answer to Question #232285 in Macroeconomics for Diane

Question

As announced in the 2021-2022 National Budget, the Fijian Government is supporting formal and informal sector employees on Viti Levu who are affected by the pandemic through monthly payments of $120 for a period of six months (August 2021 – January 2022). The Fiji Sun dated 23^rd August, 2021 reports “Attorney-General and Minister for Economy yesterday tweeted that: “Days ahead of schedule, we have met the once-in-a-century COVID-19 crisis with one of the largest assistance payouts in history. $72m was paid in unemployment benefits to 200,000 Fijians. In the coming days, we’ll reach 60,000 more bringing the total payout to around $94m.”

As an economist you are trying to assess this COVID-19 benefit scheme. In the essay critically evaluate the above COVID-19 Unemployment Assistance from the Fijian Government.  Follow the rubric below – have an introduction, body and conclusion. 

Answer 1

Covid-19 effects has hitted high among the Fijian population with unemployment becoming an outcry in the country as many experienced job losses due to the second and third wave of the virus that forced many companies to close their businesses. The Fijian Government is supporting formal and informal sector employees on Viti Levu who are affected by the pandemic through monthly payments of $120 for a period of six months (August 2021 – January 2022).

The support is aimed at increasing the aggregate demand and consumption that will be used to spearhead economic growth by revamping for more supply thus promptimg increased production in the country. This will see many companies becoming stable and start hiring again. The economy will start booming and thus with proper Covid-19 control measures, Fiji will stabilize and experience growth.

Fiscal and monetary policies are crucial in country's economic growth and their interplay work out very well in ensuring the stability of the economy. Fiji government should also seek to reduce taxes on basic consumption products and also raw materials used in production and thus make profits to support their employees. On the other hand, the Fijian Government should have invested in heavy government spending projects which will seek to employ the population, allocating funds to the unemployed makes the population lazy and encourage idleness that prompt social crimes.