Economy of Fiji

Endowed with forest, mineral, and fish resources, Fiji is one of the most developed of the Pacific island[?] economies, though it remains a developing country with a large subsistence agriculture[?] sector. Sugar exports and a growing tourist industry are the major sources of foreign exchange. Sugar processing makes up one-third of industrial activity.

Tourism has expanded rapidly since the early 1980s and is the leading economic activity in the islands. More than 409,000 people visited Fiji in 1999 (excluding cruise ship[?] passengers). About one-quarter came from Australia, with large contingents also coming from New Zealand, Japan, the United States and United Kingdom Over 62,000 of the tourists were American, a number that has steadily increased since the start of regularly scheduled nonstop air service from Los Angeles. Tourism earned more than $300 million in foreign exchange for Fiji in 1998, an amount exceeding the revenue from its two largest goods exports (sugar and garments).

Fiji runs a persistently large trade deficit, although its tourism revenue yields a services surplus which keeps the current account of its balance of payments roughly in balance. Australia accounts for between 35% and 45% of Fiji's trade, with New Zealand, the United States, the United Kingdom, and Japan varying year-by-year between 5% and 15% each.

Fiji's two largest exports are sugar and garments, which each accounted for approximately one-quarter of export revenue in 1998 (roughly $122 million each). The sugar industry suffered in 1997 due to low world prices and rent disputes between farmers and landowners, and again in 1998 from drought, but recovered in 1999. The Fijian garment industry has developed rapidly since the introduction of tax exemptions in 1988. The industry's output has increased nearly ten-fold since that time.

Other important export crops include coconuts and ginger, although production levels of both are declining. Fiji has extensive timber reserves, but forestry has become important as an export trade only since the mid-1980s. Fishing is important as an export sector and for domestic consumption. In the mining and manufacturing sectors, gold and silver are exported, with the most important manufacturing activities being the processing of sugar and fish.

Since 1987, Fiji has suffered a very high rate of emigration, particularly of skilled and professional personnel. More than 70,000 people left the country in the aftermath of the 1987 coup, some 90% of which were Indo-Fijians. With the continued expiration of land leases[?] and the instability surrounding the 2000 coup, an outflow of skilled workers is again being reported.

Other long-term economic problems include low investment rates and uncertain property rights. Investment laws are being reviewed to make them more business friendly, including a relaxation of work permit requirements.

Fiji's growth slowed in 1997 because the sugar industry suffered from low world prices and rent disputes between farmers and landowners. Drought in 1998 further damaged the sugar industry, but its recovery in 1999 contributed to robust GDP growth. Long-term problems include low investment and uncertain property rights.

The effects of the Asian financial crisis contributed to substantial drops in gross domestic product in 1997 and 1998, with a return to positive growth in 1999 aided by a 20% devaluation of the Fijian dollar[?]. The economy is estimated to have contracted by about 10% due to the disruptions from the 2000 political turmoil. Investor confidence in Fiji has dropped significantly due to the recurrence of political instability. Beyond investor and tourist unease, the fallout from Chaudhry's removal and the potential return to a racially biased constitution also could cost Fiji the preferential price and access arrangements its sugar enjoys with the European Union and the preferential treatment Australia affords the Fijian garment industry.

Gross Domestic Product (GDP): purchasing power parity - $5.9 billion (1999 est.)

GDP - real growth rate: 7.8% (1999 est.)

GDP - per capita: purchasing power parity - $7,300 (1999 est.)

GDP - composition by sector:
agriculture: 16.5%
industry: 25.5%
services: 58% (1998 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 0% (1999 est.)

Labor force: 235,000

Labor force - by occupation: subsistence agriculture 67%, wage earners 18%, salary earners 15% (1987)

Unemployment rate: 6% (1997 est.)

Budget:
revenues: $540.65 million
expenditures: $742.65 million, including capital expenditures of $NA (1997 est.)

Industries: tourism, sugar, clothing, copra, gold, silver, lumber, small cottage industries

Industrial production growth rate: 2.9% (1995)

Electricity - production: 550 million kWh (1998)

Electricity - production by source:
fossil fuel: 20%
hydro: 80%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 512 million kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: sugar cane, coconuts, cassava (tapioca), rice, sweet potatoes, bananas; cattle, pigs, horses, goats; fish

Exports: $393 million (f.o.b., 1998)

Exports - commodities: sugar 32%, clothing, gold, processed fish, lumber

Exports - partners: Australia 34%, United Kingdom 18%, other Pacific island countries 11%, United States 11%, New Zealand 5%, Japan 5% (1997)

Imports: $612 million (f.o.b., 1998)

Imports - commodities: machinery and transport equipment, petroleum products, food, chemicals

Imports - partners: Australia 45%, New Zealand 15%, Japan 7%, United States 5%, Singapore 4% (1997)

Debt - external: $213 million (1997)

Economic aid - recipient: $40.3 million (1995)

Currency: 1 Fijian dollar (F$) = 100 cents

Exchange rates: Fijian dollars (F$) per US$1 - 1.9654 (January 2000), 1.9696 (1999), 1.9868 (1998), 1.4437 (1997), 1.4033 (1996), 1.4063 (1995)

Fiscal year: calendar year

See also : Fiji