2004 September
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Country Report Fiji September 2004 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where the latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 60/F, Central Plaza London 111 West 57th Street 18 Harbour Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1007 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7830 1023 Fax: (1.212) 586 0248 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.eiu.com Electronic delivery This publication can be viewed by subscribing online at www.store.eiu.com Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, online databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office Copyright © 2004 The Economist Intelligence Unit Limited. All rights reserved. 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Fiji 1 Contents Fiji 3 Summary 4 Political structure 5 Economic structure 5 Annual indicators 6 Quarterly indicators 7 Outlook for 2004-05 8 The political scene 10 Economic policy 11 The domestic economy 12 Foreign trade and payments The region 13 Summary 14 Outlook for 2004-05 15 The political scene 16 Economic policy and the domestic economy List of figures 7 Fiji: gross domestic product 7 Fiji: consumer price inflation Country Report September 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 Fiji 3 Fiji September 2004 Summary Outlook for 2004-05 Tensions between the prime minister, Laisenia Qarase, and the leader of the ethnic Indian-dominated Fiji Labour Party (FLP), Mahendra Chaudhry, will continue to mar the political outlook and hamper efforts by investment promotion agencies to convince investors of the country’s political stability. The prospects for the tourism industry are bright, but a rash of construction projects will tax the capacity of construction companies already short of skilled labour. The political scene The impasse between Mr Qarase and Mr Chaudhry over the FLP’s demands for what it regards as a fair share of key cabinet posts is unresolved and is likely to remain so until the next election, due by September 2006. The vice-president, Ratu Jope Seniloli, has been convicted and jailed for offences related to the coup in 2000. Economic policy There are mixed developments for the ailing sugar industry. The government has moved to restrict foreign ownership in some industries, such as fishing, construction and timber. The domestic economy There are concerns that the expansion of the tourism industry could be throttled by a shortage of first-class hotel rooms, and local construction companies have warned that they do not have enough skilled workers to proceed with all the resort projects waiting to be started. Australia has extended its preferential trade agreement with Fiji. Foreign trade and payments Import coverage fell slightly in the second quarter of 2004, with official foreign- exchange reserves standing at F$732m, or US$407m (equivalent to 4.8 months of import cover) at end-June 2004. Editors: Kate Allard (editor); Graham Richardson (consulting editor) Editorial closing date: August 26th 2004 All queries: Tel: (44.20) 7830 1007 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule Country Report September 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 4 Fiji Political structure Official name Republic of Fiji Islands Form of state Parliamentary The executive The president, appointed by the Great Council of Chiefs (Bose Levu Vakaturaga), appoints the prime minister, who selects the cabinet Head of state The president, Ratu Josefa Iloilo National legislature Bicameral parliament comprising an appointed upper house, the Senate (32 members), and an elected lower house, the House of Representatives (71 members). The 1997 constitution prevented the dominance of parliament by indigenous Fijians and abolished the requirement that the prime minister be an indigenous Fijian. There is universal suffrage for all citizens aged over 21. Voting is compulsory and preferential Regional government Local administration is on a divisional basis, with separate councils for urban areas. There is a separate local government system for the indigenous Fijian population Legal system Magistrates’ courts, High Court and Court of Appeal, presided over by the Supreme Court National elections August 25th-September 1st 2001; the next election is due by 2006 Main political parties Soqosoqo Duavata ni Lewenivanua (SDL, People’s Unity Party); Fiji Labour Party (FLP); Matanitu Vanua (MV, Conservative Alliance); National Labour Unity Party (NLUP); National Federation Party (NFP); United General Party (UGP) National government On September 10th 2002 Laisenia Qarase, the leader of the SDL, was appointed prime minister. The cabinet comprises 15 SDL members, two from the MV, two from the NLUP and one independent. In defiance of the constitution, Mr Qarase named a cabinet that did not include any members of the FLP. The Supreme Court has upheld the contention of the FLP leader, Mahendra Chaudhry, that his party was constitutionally entitled to cabinet seats, but in July 2004 ruled it was the repsonsibility of the two leaders to decide how the portfolios should be allocated Prime minister & minister for Fijian affairs Laisenia Qarase Key ministers Agriculture, sugar & land resettlement Jonetani Galuinadi Commerce, business development & investment Tomasi Vuetilovoni Education Ro Teimumu Kepa Finance & national planning Ratu Jone Kubuabola Foreign affairs & external trade Kaliopate Tavola Home affairs & immigration Joketani Cokanasiga Labour, industrial relations & productivity Kenneth Zinck Lands & mineral resources Ratu Naiqama Lalabalavu Multi-ethnic affairs George Shiu Raj National reconciliation, information & media Simione Kaitani Public enterprises & public-sector reform Irami Matairavula Tourism, culture, heritage & civil aviation Konisi Yabaki Women, social welfare & poverty alleviation Adi Asenaca Caucau Central bank governor Savenaca Narube Country Report September 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 Fiji 5 Economic structure Annual indicators 1999a 2000a 2001a 2002a 2003b GDP at current prices (F$ m; at factor cost)c 3,137 3,071 3,300 3,463 n/a Real GDP growth (av; %)c 9.6 -3.2 3.0 4.1 5.0 Consumer price inflation (av; %)c 0.2 3.0 2.3 1.6 4.2a Population (m)c 0.81 0.81 0.82 0.83 n/a Exports fob (US$ m)d 609 584 538 546 n/a Imports cif (US$ m)d 903 825 794 893 n/a Current-account balance (US$ m)d -72 -90 -56 n/a n/a Reserves excl gold (US$ m)e 428.7 411.8 366.4 358.8 423.6a Total external debt (US$ m)f 235.6 208.7 188.1 n/a n/a Debt-service ratio, paid (%)f 3.5 2.7 2.0 n/a n/a Exchange rate (av; F$:US$)e 1.970 2.129 2.277 2.187 1.896a a Actual. b Economist Intelligence Unit estimates. c Reserve Bank of Fiji, Quarterly Review. d Asian Development Bank. e IMF, International Financial Statistics. f World Bank, Global Development Finance. Origins of gross domestic product 2002a % of total Components of gross domestic product 2001b % of total Agriculture, forestry & fishing 16.1 Private consumption 57.0 Mining & quarrying 2.5 Government consumption 17.1 Manufacturing 15.6 Fixed investment 14.5 Construction 4.3 Stockbuilding 1.0 Electricity & water 4.4 Exports of goods & services 55.7 Transport & communications 13.6 Imports of goods & services -60.7 Wholesale & retail trade, restaurants & hotels 19.5 Statistical discrepancy 15.4 Other services 24.0 Principal exports 2003a F$ m Principal imports 2003a F$ m Garments 252.7 Machinery & transport equipment 664.4 Sugar 230.7 Manufactured goods 440.8 Fish 85.0 Food 332.5 Gold 76.5 Mineral fuels 325.0 Timber 33.2 Miscellaneous manufactured articles 228.6 Main destinations of exports 2003a % of total Main origins of imports 2003a % of total Australia 26.5 Australia 34.6 US 18.1 New Zealand 17.3 UK 14.6 Singapore 10.7 Pacific Islands 10.0 Japan 4.9 New Zealand 4.5 US 3.6 a Reserve Bank of Fiji, Quarterly Review. b Asian Development Bank. Country Report September 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 6 Fiji Quarterly indicators 2002 2003 2004 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Government finance (F$ m) Total revenue & grants 258.9 n/a n/a n/a n/a n/a n/a n/a Expenditure 350.7 n/a n/a n/a n/a n/a n/a n/a Balance -91.7 n/a n/a n/a n/a n/a n/a n/a Prices Consumer prices (1993=100) 125.1 125.5 130.1 131.2 130.5 131.6 133.0 1,34.9 Consumer prices (% change, year on year) 0.8 0.3 3.4 4.1 4.3 4.9 2.2 2.8 Financial indicators .