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Friday, July 14, 2000

Democracy is loser
in Fiji power struggle

Bullet The issue: Fijian rebels have released the last of their hostages, including the former prime minister.
Bullet Our view: The rebels succeeded in destroying democracy in Fiji.

THE release of the last 17 hostages seized May 19 by ethnic Fijian rebels appears to end the political crisis in Fiji but that is hardly cause for celebration. The ransom paid was the destruction of democracy in the islands.

George Speight, a failed businessman who emerged as leader of the rebel group, succeeded in ousting the elected prime minister and president and denying the Indians political rights.

The new interim president, selected by the so-called Great Council of Chiefs, is Ratu Josefa Iloilo, who was Speight's choice. In negotiations with military commanders, Speight had made it plain he would not free the hostages unless he could dictate the makeup of the new government. It appears he will have his way.

This is a victory for racism. Many of the predominantly Melanesian native Fijians, who constitute a majority, resent the economic success of the Indians, descendants of laborers brought to Fiji in the 19th century by the British to work the sugar plantations. Speight claimed to speak for the Fijians, although some deplore his tactics.

Fiji maintained a veneer of democracy for years after gaining independence, but relations between ethnic Fijians and Indians were often tense. Twelve years ago an army colonel staged a coup in the name of the Fijians and ruled by martial law. But a new constitution was approved two years ago that granted Indians equal political rights.

When a mixed Fijian-Indian coalition gained power in the last elections, with an Indian as prime minister for the first time, tensions increased.

A dispute over lease rates paid by Indians to Fijian landowners brought tensions to a boil. That led to the seizure of the prime minister, Mahendra Chaudhry, his cabinet and other officials by Speight's group. Attacks on Indian-owned shops followed.

An uneasy standoff lasted for weeks as Speight negotiated with military commanders who had declared martial law but were reluctant to take on the rebels in combat. In the end, Speight evidently achieved all his demands with a minimum of bloodshed.

Fiji's economy, based on sugar and tourism, has been paralyzed for the last two months. The damage to the economy, like that to democracy, will take time to repair.

The coup has provoked protests from Australia and New Zealand -- the two nations with the closest relations with Fiji -- Britain, the United States and India. These and other democratic governments should consider imposing sanctions on Fiji until the rule of law and democratic elections -- with full rights for Indians -- are restored.

Withdrawal of telecom
merger is welcome

Bullet The issue: Sprint and WorldCom have abandoned their merger plans because of opposition by U.S. and European officials.
Bullet Our view: Consumers are likely to benefit from continued competition in the communications industry.

FACED with challenges by the U.S. Justice Department and European regulators, Sprint and WorldCom have officially backed away from their proposed merger. The two long-distance carriers are expected to look elsewhere for expansion, which may provide communications industry leader AT&T with stronger competition. Consumers may benefit from the decision.

The proposal by Sprint and WorldCom drew immediate opposition when it was announced last month. The European Union's antitrust chief said he would recommend its rejection by the European Commission, and the Justice Department filed a lawsuit challenging the merger. Joel Klein, the Justice Department's antitrust chief, voiced concern that the proposed conglomerate could dominate long-distance service and Internet access.

The Justice Department forced AT&T to divest its local telephone monopolies and compete in the long-distance market in 1984, and Congress overhauled the industry's legal framework four years ago. As a result, strong competition has caused long-distance rates to plummet. It's important to keep the industry competitive.

Both companies maintained that their proposal would have reaped both financial and customer benefits. The Justice Department's quashing of such deals "ultimately will reduce innovation and choice, and raise the cost of telephone services for residential customers, particularly those in rural America," said Bernard Ebbers, WorldCom's president and chief executive.

U.S. and European officials were understandably skeptical about the claim that a merger of the industry's No. 2 and 3 corporations would somehow benefit consumers. The plan's formal end allows the two companies to entertain other avenues of expansion, which might actually increase competition among the industry leaders.

The companies came to the conclusion that the legal challenges would add too much cost to the merger proposal. "Given the competitive nature of the marketplace, prolonged delay and uncertainty would not be in the best interest of shareholders, employees or customers," Sprint said.

Sprint and WorldCom failed to present a convincing argument that reducing the number of long-distance options for Americans and Internet access options for Europeans would be in the consumer's best interest. Regulators on both sides of the Atlantic did their jobs in discouraging this merger. Continued diligence by regulators is needed to prevent healthy competition in the communications industry from evaporating.

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor

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