The Fijian government and Fiji Water recently played an interesting game of chicken. The two parties were in a standoff over a proposed tax increase for water extraction. The dispute has been resolved, but it raised some interesting questions about just what exactly the price of water should be.
The disagreement arose last week when the Fijian government decided to increase the water extraction tax from F$0.003 (thatâs a third of a Fiji cent) to F$0.15. Thatâs a hefty increase worth over F$22 million annually. Not a bad windfall for a cash-strapped government, especially given the limits of Fijiâs economy.
Fiji Water in turn said it had no choice but to shut...