THE strong traditional chiefly system prevalent in Melanesian societies threaten issues of governance, says Dr Mahendra Reddy, the dean of the FIT's Faculty of Commerce, Hospitality and Tourism Studies.
"In an ethnically-divided society like Fiji, groups that stick together along their own ethnic and cultural lines could have a detrimental effect on economic growth," he said.
Dr Reddy said this was because it made it difficult and costly to reach co-operative solutions.
"In these societies, powerful individuals or groups could manipulate ethnic loyalties to grab more resources for themselves, rather than for their ethnic group," he said, adding this distorted the sharing of wealth and resources.
Dr Reddy said there was an established and unwritten culture of silence that prevented anyone questioning chiefs or leaders, even if they were wrong.
He said many of those who had become well off in Pacific Island countries largely acquired wealth through government-created monopoly positions.
"Therefore there is virtually no vested interest in open markets because it would mean increased competition for the monopolies," he said.
"The tendency for close relationships between businesses and politicians in these small countries reinforces the power of these vested interests."
Dr Reddy said this made it hard to achieve micro-economic reforms.
