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Country Report Country Report Fiji June 2006 The Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ 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 26 Red Lion Square The Economist Building 60/F, Central Plaza London 111 West 57th Street 18 Harbour Road WC1R 4HQ New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7576 8000 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7576 8500 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 © 2006 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it. Symbols for tables "n/a" means not available; "–" means not applicable Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK. Fiji 1 Contents Fiji 3 Summary 4 Political structure 5 Economic structure 5 Annual indicators 6 Quarterly indicators 7 Outlook for 2006-07 8 The political scene 10 Economic policy 11 The domestic economy 12 Foreign trade and payments The region 13 Summary 14 Outlook for 2006-07 16 The political scene 17 Economic policy and the domestic economy List of figures 7 Fiji: Gross domestic product 7 Fiji: Consumer price inflation Country Report June 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 2 Fiji Fiji June 2006 Summary Outlook for 2006-07 The re-elected prime minister, Laisenia Qarase, has taken the initiative by appointing opposition members to be cabinet members. But many political problems may lay ahead, with the military leader, Frank Bainimarama, still antagonistic towards Mr Qarase. The national economic outlook is shaky, with tourist arrivals suffering as a result of the election and the sugar industry under threat from the phased withdrawal of EU subsidies. The political scene Mr Qarase!s manoeuvrings following his re-election have so far proven successful. He has created an enlarged cabinet of 35 ministers, incorporating members of the Fiji Labour Party (FLP) and obliging the leader of the parliamentary opposition, Mahendra Chaudhury, to step down in favour of Mick Beddoes, the leader of a tiny rival party. Tensions between the ruling Soqosoqo Duavata ni Lewenivanua (SDL) and the military are unresolved. Two former military leaders have been brought to court on charges relating to the attempted removal of Mr Bainimarama. Economic policy The Reserve Bank of Fiji (RBF, the central bank) has revised its 2006 GDP forecast upwards, although its confidence may be misplaced. The prime minister has cited sugar industry and land reforms as his main priorities. Government spending growth is high, and the Reserve Bank has tightened monetary policy. The domestic economy The national economy is likely to face serious damage when sugar subsidies from the EU start to be phased out from July. A local sugar growers! association has asked for a further F$1.8bn (US$1bn) to help to reconstruct roads to key sugar mills after storm damage. Some 15% of the workforce at Emperor Gold Mines has been laid off, with the company suffering from the effects of poor- quality ore, and productivity and infrastructure problems. Foreign trade and payments An ongoing trade dispute with Papua New Guinea over imports of tinned beef has been resolved. A Chinese company, COVEC, has had its contract terminated after failing to complete more than 35% of its infrastructure project within the designated period of time. Fiji and Indonesia have signed a memorandum of understanding in order to jointly improve and promote their tourism industries. Editors: Graham Richardson (editor); Gerard Walsh (consulting editor) Editorial closing date: June 6th 2006 All queries: Tel: (44.20) 7576 8000 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule Country Report June 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 Fiji 3 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 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 Held four months early in May 2006; next election due 2011 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 Alliance (NA) National government On May 18th 2006 Laisenia Qarase, the leader of the SDL, was re-appointed prime minister. In an unprecedented move, he expanded the cabinet to include nine FLP members alongside 26 SDL members. Prime minister & minister for Fijian & national reconciliation Laisenia Qarase Key ministers Agriculture Gyani Nand Commerce & industry Adi Sivia Tora Education Ro Teimumu Kepa Energy & mineral resources Lekh Ram Vayeshnoi Finance & national planning Ratu Jone Kubuabola Foreign affairs & external trade Kaliopate Tavola Home affairs, immigration & national disasters Josefa Vosanibola Information, communications & media relations Marieta Rigamoto Justice Qoriniasi Bale Labour & industrial relations Krishna Datt Local government & urban development Chaitanya Lakshman Public enterprises & public-sector reform Jonetani Galuinadi Provincial development & disaster management Ted Young To u r i s m Pita Nacuva Transport & civil aviation Ratu Naiqama Lalabalavu Women, social welfare & poverty alleviation Adi Caucau-Felipe Central bank governor Savenaca Narube Country Report June 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 4 Fiji Economic structure Annual indicators 2001a 2002a 2003a 2004a 2005a GDP at current prices (F$ m; at factor cost)b 3,835.8 3969.3 4,396.3 4,674.0 n/a Real GDP growth (av; %)c 2.7 4.3 3.0 4.1 1.0 Consumer price inflation (av; %)c 2.3 1.6 4.2 3.3 2.7 Population (m)d 0.82 0.83 0.83 0.84 n/a Exports fob (US$ m)b 538 546 671 678 n/a Imports cif (US$ m)b 794 893 1,168 1,272 n/a Current-account balance (US$ m)b 16 48 -4 -34 n/a Reserves excl gold (US$ m)d 366.4 358.8 423.6 478.1 314.7 Total external debt (US$ m)b 228 229 246 267 n/a Debt-service ratio, paid (%)b 3.4 3.4 3.1 3.1 n/a Exchange rate (av; F$:US$)d 2.277 2.187 1.896 1.733 1.691 a Actual. b Asian Development Bank. c Reserve Bank of Fiji, Quarterly Review. d IMF, International Financial Statistics. Origins of gross domestic product 2002a % of total Components of gross domestic product 2001b % of total Agriculture, forestry & fishing 16.3 Private consumption 57.0 Mining & quarrying 1.4 Government consumption 17.1 Manufacturing 15.6 Fixed investment 14.5 Construction 5.0 Stockbuilding 1.0 Electricity & water 3.7 Exports of goods & services 55.7 Transport & communications 13.5 Imports of goods & services -60.7 Wholesale & retail trade, restaurants & hotels 16.3 Statistical discrepancy 15.4 Other services 28.2 Principal exports 2004a F$ m Principal imports 2004a F$ m Garments 226.3 Mineral fuels 587.0 Sugar 204.2 Machinery & transport equipment 559.1 Gold 88.5 Manufactured goods 486.2 Fish 81.4 Food 351.7 Timber 41.6 Miscellaneous manufactured articles 253.5 Main destinations of exports 2004a % of total Main origins of imports
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