FOREWORD

For Fiji to successfully achieve its vision of peace and prosperity, with all citizens sharing in the fruits of development, we must devise and implement policies and initiatives to enable us to reach our goal.

The Government is taking a critical step towards this with the development of an all-encompassing strategy to make Fiji a competitive exporter in a highly challenging global environment.

The theme of the new strategy is, “A DYNAMIC AND COMPETITIVE EXPORTER FOR PROSPERITY THROUGH A NATIONAL PARTNERSHIP”.

This reflects our faith and confidence in an approach that sees all stakeholders working together in formulating and implementing national development policy.

Our country is at a critical point in its development. Having successfully overcome a major national crisis, we are now committed to creating a better Fiji for every citizen, based on economic strength and stability.

Over the past five years the country has made good progress in building a more flexible, more competitive and more market--friendly economy. The job market is in recovery. But we cannot be complacent. There are more challenges to be addressed now, than ever before.

These include the erosion of preferential trade arrangements under the South Pacific Regional Trade & Economic Co-operation Agreement (SPARTECA) and a reduction in the price paid for our sugar by the European Union. There has been a sharp increase in fuel prices. Our trade deficit has widened. Economic growth has slowed, and there is still not enough new investment. It is clear that we must act now to address these issues.

The National Export Strategy document identifies 13 specific areas requiring attention. It also outlines their respective objectives, strategies and performance indicators, as well as the agencies responsible for spearheading implementation of the necessary measures.

Some strategies call for additional financial input. Many will need major new infrastructure, regulatory changes, capacity building, improved research and development, or institutional re-engineering.

i The successful implementation of Government’s policy initiatives demands our collective and total commitment. The assistance and support of our development partners, both bilateral and multilateral, will be critical. There must be better co-ordination of the specialised resources provided by them to the different executing agencies.

I take this opportunity to express my gratitude to all who have contributed to the preparation of Fiji’s new export strategy. My very special thanks go to members of the private sector for their invaluable insight and assistance.

May I also, on behalf of my Ministry and the Fiji Government, offer sincere thanks to the Commonwealth Secretariat, and the International Trade Centre, for their support throughout.

Finally, I am of the firm belief that the National Export Strategy will prove to be an effective launch pad for Fiji’s future prosperity.

May God Bless Fiji.

HON. ADI SIVIA QORO Minister for Commerce & Industry

ii Abbreviations and Acronyms

Government Ministry of Agriculture MA Ministry of Commerce & Industry MCI Ministry of Curative Health Services MCHS Ministry of Education, Youth & Sports MEYS Ministry of Energy & Mineral Resources MEMR Ministry of Environment ME Ministry of Fijian Affairs, Lands & Provincial Development MFALPD Ministry of Finance & National Planning MFNP Ministry of Fisheries & Forests MFF Ministry of Foreign Affairs & External Trade MFAET Ministry of Home Affairs & Immigration MHAI Ministry of Information & Communications MIC Ministry of Justice MJ Ministry of Labour & Industrial Relations MLIR Ministry of Public Enterprises & Public Sector Reform MPEPSR Ministry of Public Utilities & Infrastructure Development MPUID Ministry of Tourism & Transport MTT Ministry of Women, Social Welfare & Housing MWSWH Office of the Solicitor General SG’s Office Public Service Commission PSC Fiji Islands Bureau of Statistics FIBOS

Learning Institutions Fiji Institute of Technology FIT Fiji School of Medicine FSM Fiji School of Nursing FSN The University of the South Pacific USP Training & Productivity Authority of Fiji TPAF

Government Commercial Companies (GCC), Statutory Bodies, International Organisations, and Others African Caribbean and the Pacific ACP Agricultural Landlord & Tenant Act ALTA Agricultural Marketing Authority AMA Alternative Dispute Resolution ADR Alternative Livelihood Programme Project ALP

iii Amalgamated Telecom Holdings Limited ATH Asian Development Bank ADB Audio Visual Industry AV Industry Business Process Outsourcing BPO Capital Markets Development Authority CMDA Central Business District CBD Chief Executive Officer CEO Civil Society Organisations CSO Commerce Commission CC Commonwealth Secretariat CommSec Duty Suspension Scheme DSS Economic Management System EMS Economic Partnership Agreement EPA Effective Rate of Protection ERP Electronic Commerce E-Commerce European Investment Bank EIB European Union EU Exclusive Economic Zone EEZ Export Credit Finance ECF Export Finance Facility EFF Fijian Affairs Board FAB Fiji Audio Visual Commission FAVC Fiji Chamber of Commerce & Industry FCCI Fiji Development Bank FDB Fiji Ecotourism Association FEA* Fiji Electricity Authority FEA Fiji Forest Industries Limited FFI Fiji Hardwood Corporation Limited FHCL Fiji Hotel Association FHA Fiji Human Rights Commission FHRC Fiji Integrated Tax System FITS Fiji International Telecommunications Limited FINTEL Fiji Islands Backpackers Association FIBA Fiji Islands Hotel & Tourism Association FIHTA Fiji Islands Quarantine Services FIQS Fiji Islands Maritime Safety Administration FIMSA Fiji Islands Revenue & Customs Authority FIRCA Fiji Islands Trade & Investment Bureau FTIB Fiji Investment Corporation Limited FICL Fiji Medical Association FMA Fiji National Export Strategy FNES Fiji Pine Limited FPL Fiji Pine Trust FPT Fiji Ports Corporation Limited FPCL

iv Fiji Sugar Corporation FSC Fiji Sugar Marketing Company Limited FSMCL Fiji Islands Visitors Bureau FVB Fiji Women’s Crisis Centre FWCC Foreign Direct Investment FDI Foreign Investment Act FIA Free Trade Agreement FTA General Agreement on Trade in Services GATS Gross Domestic Product GDP Hazard Analysis Critical Control Point HACCP Hotels Aid Act HAA Human Resource Development HRD Information and Communication Technology ICT Information Technology IT Information Technology and Computing Services ITC International Sanitary and Phytosanitary ISPS International Trade Centre ITC Meetings Incentives Conferences & Exhibitions MICE National Centre for Small and Micro Enterprise Development NCSMED National Export Strategy NES National Export Strategy Design NESD National Trading Corporation Limited NATCO Native Land Trust Act NLTA Native Land Trust Board NLTB Pacific Agreement on Closer Economic Relations PACER Pacific Island Countries PIC Pacific Island Countries Trade Agreement PICTA Public Private Partnership PPP Public Sector Investment Programme PSIP Pure Obtainable Cane Sugar POCS Research and Development R&D Reserve Bank of Fiji RBF Rules of Origin RoO Secretariat of the Pacific Community SPC Short Lived Investment Package SLIP Small and Micro Enterprises SMEs Society of Fiji Travel Agents SOFTA Southern Cross Cable Network SCCN South Pacific Regional Trade and Economic Co-operation SPARTECA Agreement South Pacific Stock Exchange SPSE SPARTECA-TCF Scheme S-TCF Scheme Strategic Development Plan SDP Sugar Cane Growers Council SCGC

v Sugar Commission of Fiji SCF Sugar Technical Mission STM Summit Working Group SWG Technical Assistance TA Temporary Studio Zone TSZ Textiles, Clothing & Footwear TCF Tropic Wood Industries Limited TWIL Value Added Tax VAT World Trade Organisation WTO

vi TABLE OF CONTENTS

Page No.

Foreword ...... i-ii Abbreviations ...... iii-vi Executive Summary ...... ix-xii Chapter 1 Introduction To, And Rationale for the Export Strategy ...... 1 - 4 Chapter 2 The Strategy Design Process and Principles ...... 5-9 Chapter 3 An Assessment of Export Performance ...... 10-33 Chapter 4 Government Policy and Strategy in Support of Export Development ...... 34-43 Chapter 5 Cross Cutting Issues ...... 45-51 Chapter 6 The National Export Strategy : The Way Forward ...... 52-54 Sugar ...... 54-59 Forestry ...... 60-68 Marine Products ...... 69-76 Agro Business ...... 77-91 Garments ...... 92-94 Mineral Water ...... 95-98 Tourism ...... 99-104 Audio Visual Industry ...... 105-110 Information Communication & Technology ...... 111-117 Financial Services ...... 118-121 Health Services ...... 122-127 Education & Training ...... 128-130 Labour Mobility ...... 131-138 Chapter 7 Strategy Management ...... 139-143 Chapter 8 Resource Mobilisation ...... 144-148

vii Appendices Annex (1) The National Export Design Team ...... 149-153 Annex (2) The National Trade Support Network ...... 154 Annex (3) Export Incentives ...... 55-158 Annex (4) Assessment of Trade Support Network ...... 159-163 Annex (5) Cross Cutting Issues Matrix ...... 164-173 Annex (6) Resource Mobilisation Matrix ...... 174-183

Tables Table 1 Summary of Total Export Earnings & Percentage : 1995–2005 ...... 11 Table 2 Performance of the Fiji Agricultural Sector to the Economy ...... 25 Table 3 Annual Budgetary Provisions ...... 39 Table 4 National Export Strategy – Strategy Analysis Matrix ...... 53 Table 5 Export of Fiji’s Major Horticultural Export Commodities : 1997-2004 ...... 78 Table 6 Aid from Development Partners : 1999–2006 ...... 146

Figures Figure 1 Percentage of Fiji’s Export Performance : 1995–2005 ...... 11 Figure 2 Foreign Exchange Earnings : 1999 & 2004 ...... 15

viii EXECUTIVE SUMMARY

The performance of the Fiji economy since 1999 has been uneven, largely as a consequence of political upheavals between 1987 and 2000. While the Government has been broadly successful in restoring stability and re-establishing economic growth, the country continues to face a very challenging future. The uncertainties stem partly from the on-going political impasse on resolutions to major Constitutional and leasehold land issues. There are signs also that the economy is beginning to feel the impact of significant economic restructuring taking place within the major sectors, particularly agriculture and manufacturing.

Despite increasing global integration, an unprecedented rise in the value of trade and capital flows, and a reduction in barriers to international trading activities, Fiji fails to capitalise on the benefits of trade liberalisation and globalisation.

One of the major challenges is for the country to successfully participate in the international market place. To do this, it must be able to compete effectively with other countries in the delivery of similar goods and services. To achieve sustainable socio-economic development and prosperity, it is imperative that the nation is productive and competitive. Concerted effort is urgently required to address:

(i) the phasing out of preferential arrangements for major export products, particularly sugar and garments;

(ii) the country’s limited capacity to diversify its export mix to value added (given its mainly forestry and agricultural product base), and to gain market access presently denied on the grounds of non-compliance with standards and certification requirements;

(iii) revenue leakage in the high performance tourism sector;

(iv) the limited scope of export oriented small and medium enterprises, and

(v) a serious trade imbalance.

As the country expands its commodity export base, there is room to further develop the services sector. This will facilitate and enhance our capacity to export. Other service industries to complement our commodities exports must also be nurtured. New ICT and audio visual industries are already showing the way. In the medium term, the export of skilled human resources will continue to provide a further source of foreign exchange earnings.

ix In addition to the Government’s on-going efforts to improve the country’s economic performance, as outlined in its Strategic Development Plan, it is also necessary to put in place a holistic and integrated National Export Strategy acceptable to all stakeholders, and which complements all other Government initiatives.

In recognition of the need for closer partnership between the Government and the private sector, and to foster shared ownership, a consultative approach was adopted in formulating the strategy. Through this consultative process, 13 key areas were identified for action.

Each area was critically analysed through a sequence of processes. Every effort was made to ensure consistency and harmonisation of the export strategy with the national strategic plan, particularly in areas of priorities and strategic direction.

The design process was comprehensive in addressing competitiveness issues at national, sectoral and sub-sectoral level, as well as their contribution to export and overall socio-economic development.

It was noted that Fiji’s export growth performance was generally below the global average, and erratic. Exports were narrow-based, and market diversification stagnant.

There is a need to further improve the operating environment so that it becomes more attractive to the private sector, encouraging more participation and investment in export businesses.

Entrepreneurship was also seen as a challenge. If Government wants the private sector to become the engine of growth, which is its stated intention, then it must actively encourage enterprise and entrepreneurship.

The role for Fiji’s entrepreneurs is to uncover new profit opportunities in exports. This could be a major source of improved productivity, driving sustainable growth. However, entrepreneurs cannot function without the required access to assets, markets, skills and financial resources. They, and their work, must also be protected through property rights and supportive legislation.

The Government needs to drastically reduce its direct involvement in private sector activities, and focus on its core functions such as maintaining macro-economic stability, improving the management of its own operations and creating an institutional and policy environment that encourages and facilitates greater entrepreneurship.

A detailed review of current Government policy and strategy in support of export development was also undertaken. This found that Fiji does not yet have a clear strategy in place. The approach is ad-hoc, sector based, and not universally encouraging.

x Associated with the review was an assessment of trade support in terms of resources made available, and network coordination. It was quite clear that while sectors such as tourism and sugar have well organised networks and are given priority, limited effort was directed to other sectors contributing substantially to export and foreign exchange earnings.

Based on these assessments, detailed strategies were drawn up for specific goods and services with key performance indicators and the resources required. In each case, the responsible implementing agencies were identified.

During the formulation of the National Export Strategy it was also recognised that a number of cross-issues have an influence. These include: supply and infrastructure constraints; the absence of bulk handling facilities; markets information; research; human resource development and a vibrant domestic economy; the high cost of finance; raw materials and transport; taxation issues; currency fluctuation; the need to improve the Fiji image and reduce the cost of doing business here; the resource situation; institutional assets; and vulnerability to natural disaster.

New strategies for the 13 identified areas were dovetailed with Government’s strategic objectives as outlined in its Strategic Development Plan.

In summary:

• 73 objectives were agreed to and listed in order of priority;

• To complement these objectives, 266 strategies were developed, together with key performance indicators.

• The strategies were then grouped under four major categories, namely the development, competitiveness, client and institutional perspectives;

• The development perspective, with 16 strategies, focuses on how politicians, Government decision makers, Civil Society Organisations (CSOs) and the donor community perceive the vision from the standpoint of its relevance to socio- economic development, and its contribution to national development goals;

• The 127 strategies under the competitiveness perspective, address the way sector associations and advocacy groups, potential investors, both domestic and foreign, and prospective buyers/importers perceive the vision in terms of reinforcing the sector’s capacity to improve the business environment. These strategies also focus on enhancing current sector players’ participation in the international value chain, and increasing opportunities for value retention, addition and creation;

xi • Under the client perspective, there are 41 strategies identified. These deal with how current, potential and aspiring exporters, as well as other key enterprises and players in the sector value chain, perceive the vision in terms of furthering their commercial objectives and satisfying their needs for support;

• There are 82 strategies identified under institutional perspective. These are concerned with the way organisations from both the public and private sector, within the trade support and services delivery network, perceive the vision in terms of consolidating and reinforcing their positions, facilitating their work, and enhancing their capabilities and competencies.

The successful implementation of all action under the National Export Strategy programme will require an effective monitoring and management mechanism. A number of options were considered and, after thorough consultation with all stakeholders, it was agreed that, initially, existing Government machinery should be used.

A Summit Working Group (SWG) will be established with membership from the current core group. The SWG will report to the National Economic Development Council, which is chaired by the Minister of Finance and National Planning. The Minister will then report direct to Cabinet.

In the longer term, consideration will be given to the establishment of a National Export Council, with the necessary enabling legislation, to implement and monitor all strategies.

Resources needed to implement each individual action plan are to be the shared responsibility of Government, the private sector and development partners. It was considered appropriate to classify these resources in terms of financial, institutional, human capacity building and specific programme.

xii CHAPTER I INTRODUCTION TO, AND RATIONALE FOR THE EXPORT STRATEGY

1.0 Introduction

1.1 Fiji is a small, open economy with narrow based export opportunities. Given the size of the market and low levels of productive capacity, Fiji cannot influence world prices of goods and services, particularly commodity prices. The country faces unique challenges because of its size, lack of economies of scale, high dependence on a few tradable primary commodities, isolation from major markets, vulnerability to natural disasters, and difficulties in attracting foreign investment that exacerbate its trading outlook.

1.2 Fiji pursued import substitution policies in the post-independence period. During the early 1970s, the economy grew at an average rate of 5.8%. Tourism, sugar and copra provided the main impetus to economic growth. This stimulated increased activities in the construction sector, and the development of other service facilities. During the mid 1970s, Fiji experienced lower average growth of 3.8% per annum due to the increase in energy prices. That affected tourism, causing a sharp decline in investment levels. The political events and resulting instability of 1987 contributed to the decline in the country’s foreign reserves due to flight of capital, and reduced investments.

1.3 To address economic decline, the country adopted an export-oriented policy in 1989 to move the economy towards export- led growth through trade deregulation, and reforms in the labour and capital markets. The main thrust of the export-led growth was to improve operational efficiency and lower costs, both in the private and public sectors, and gain international competitiveness of exports. In 1995 Fiji embraced trade liberalization that promoted open trade and aggressive competition thus exerting greater pressure to adopt global business practices. The major shift in economic policies in the mid ‘80s contributed to the growth of the traditional export sectors of sugar, garments and tourism as major sources of foreign exchange earnings and employment, while the policy initiatives were considered relevant. The enabling legislations were not in place to implement these new policy initiatives.

1 1.4 Fiji’s successful participation in the international marketplace is vitally important to secure future economic prosperity. Yet Fiji finds itself confronting an unparalleled series of threats and challenges which, in the absence of an effective and sustained response, will not only diminish the possibility of the export sector being the dynamo of the country’s economic and social development – a central goal of the country’s National Economic Plan (2007 – 2011) – but will result in a serious erosion in our current export performance. Of particular interest is the remittances gained from the export of semi skilled workers such as caregivers, security personnel in the British Army, and through Fiji’s participation in the United Nations.

1.5 To sustain improvements in export performance, it is vital that Government develop a realistic National Export Strategy. An appropriate mechanism must also be put into place to facilitate its management and implementation. A relevant and concerted response is required to address the imminent phasing out of preferences accorded to sugar and garment industries; Fiji’s inability to diversify its export mix to ‘add value’ to resource-based sectors gain market access currently denied on the grounds of non-compliance with standards and certification requirements; reduce leakages in the high performing tourism sector; the near absence of export oriented small and medium enterprises and Fiji’s chronic balance of payments deficit.

1.6 The initiative to develop a National Export Strategy is consistent with the medium term national strategies of the country’s Strategic Development Plan (SDP) 2003- 2005 and the Medium Term Review 2006-2008 carried out in 2005 “To promote the diversification of the manufacturing base and expanding competitive niche industries with high value added components”.

1.7 In recognition of the need for an integrated approach and public and private sector partnership to develop and sustain Fiji’s export performance, the Ministry of Commerce and Industry, with the support of other concerned Ministries/private sector/development partners, initiated the process of developing a National Export Strategy that would respond comprehensively to these and other challenges.

1.8 Government is convinced that through the Public, Private Partnership (PPP) arrangement, a more balanced and realistic strategy can be developed. The effective participation of all stakeholders vis-à-vis public, private sector, civil society and development partners in the process, will foster ownership and the successful implementation of any development effort.

2 2.0 Vision

2.1 In developing the National Export Strategy, Fiji hopes to achieve sustainable economic growth by encouraging competitiveness, value addition and export diversification in areas where there are competitive advantages. However, this can only be achieved through greater and stronger PPP. Through the PPP, it is anticipated that the National Export Strategy will enable the Government to achieve its strategic vision for the next five years. This is, “A Peaceful, Prosperous Fiji”.

2.2 The vision for the Export Strategy that has been endorsed by all the stakeholders is consistent with the overall vision for the country’s effort for socio economic development. A salient feature in the vision is the emphasis on the need for strong partnership between the public and private sector. The endorsed vision is: A DYNAMIC AND COMPETITIVE EXPORTER FOR PROSPERITY THROUGH A NATIONAL PARTNERSHIP.

3.0 Overall Objective

3.1 The strategic objectives of the National Export Strategy can be summarized as follows: • Improve commodity quality. • Diversify the mix from narrow based export commodities. • Enhance exports through value addition, improved quality, and reduced cost of production. • Strengthen the institutional export support networks through effective trade facilitation. • Enhance market access opportunities for exports. • Penetrate emerging export markets.

4.0 Mission Statement

• Improve partnership among stakeholders • Diversification of export base through our competitive advantage • Improve quality and quantity through value-adding

3 • Effective trade facilitation through networking • Employment creation and sustainable economic growth through competition and export • Competitiveness through partnership • Providing the enabling environment through improved infrastructure and support services.

4 CHAPTER 2

THE STRATEGY DESIGN PROCESS AND PRINCIPLES

1.0 Introduction

1.1 The ultimate aim of Fiji’s National Export Strategy is to stimulate Fiji exports in the face of advancing globalisation. To foster ownership, and ensure that strategies developed are realistic, a partnership approach was adopted between the public and private sectors. From a Government perspective this involves all relevant Ministries. From a commercial perspective, particular emphasis is given to exporters.

1.2 The Strategy is comprehensive in that it addresses competitiveness issues at the national, sectoral and sub-sectoral levels, which are consistent with the priorities endorsed by Government. Its authors subscribe to the view that investing in export development contributes directly to overall economic and social development and should, therefore, be accorded a high priority in future national planning exercises. This is imperative since the sectoral-level strategies will have to respond to all issues that have an impact on the sectors’ international competitiveness.

2.0 Strategy Design Process

2.1 Preliminary consultations were carried out with the Commonwealth Secretariat and the International Trade Centre (ITC). Following 18 months of detailed discussion, the concerned parties were ready to launch the project initiation programme.

2.2 In March 2006, the Ministry of Commerce & Industry, in conjunction with the Commonwealth Secretariat and the ITC, hosted a three-day workshop in Suva, involving technical experts from the two international agencies.

2.3 The workshop was the first of its kind in Fiji and the region. It was officially launched by the then Minister for Commerce, Business Development &

5 Investment, Hon. Tomasi Vuetilovoni. The event attracted interest from the public and private sectors, academia, research institutions, and civil society organisations. Stakeholders present resolved to proceed with the analysis of the thirteen areas identified for inclusion in the National Export Strategy Design (NESD) process.

2.4 Annex 1 lists the individuals who make up the National Export Strategy Design Team. The team formed groups with a National Core Team and 13 Sector Teams. The National Core Team is chaired by the Chief Executive Officer, Commerce & Industry, and includes a chairperson – or Navigator – from each sector team.

2.5 As part of the objectives of the workshop the Ministry, together with the relevant stakeholders, then:

(i) initiated the process of designing a national strategy that seeks to raise Fiji’s competitiveness and lead directly to a significant improvement in the country’s export performance;

(ii) examined appropriate strategy management structures and processes;

(iii) created the national team to develop Fiji’s National Export Strategy; and

(iv) established an action plan that will lead to preparation of the National Export Strategy. This was supported with technical input from the Commonwealth Secretariat and the International Trade Centre.

3.0 Key Areas identified for the Export Strategy

3.1 The identified areas were selected following internal consultations within the line Ministries, and evaluating export trends over the years under prevailing market conditions. The list is not exhaustive, and other sectors will be considered later.

3.2 The current National Export Strategy, designed for the period 2007-2011, focuses on priority sectors drawn from manufacturing, goods and services. Criteria used to prioritise sectors included the sector’s current contribution to GDP and to total exports, its growth potential, and stakeholder assessment. The list of prioritised areas identified is summarised in the following table:

6 Goods Services Resource Based Manufacturing Other Services Labour

Sugar Tourism Health

Forestry Garments Audio Visual Education/Training

Information Technology Marine Products Mineral Water Labour Mobility Communication

Agro Business Financial Services

4.0 Consultation Process

4.1 The Ministry, again in conjunction with the Commonwealth Secretariat and the ITC, next hosted a National Export Retreat in late July 2006 in Nadi. Its objective was to assess work undertaken to date by the various sectors, share experiences on the NESD process, and agree on a synchronized approach to the completion phase. Together with its co-hosts, the Ministry conducted a National Export Symposium a month later. There, the Ministry presented a draft National Export Strategy for consideration.

4.2 In essence, the outputs of the NESD project will be:

• a National Export Strategy document endorsed by both the public and private sectors;

• a close public-private sector partnership to implement the strategy;

• a management framework from which to monitor implementation and refine the strategy as and when required; and

• a resource-mobilisation plan designed to secure donor support to the implementation of the National Export Strategy.

The final draft National Export Strategy was presented at the National Economic Summit on September 28 2006, with the findings of the National Export Strategy Design endorsed by Cabinet at its meeting on the 12th of October 2006.

7 5.0 The Approach

5.1 The National Export Strategy can be viewed as comprising four interlinking gears, namely: the border-out gear, the border gear, the border-in gear and the development gear.

5.2 The border-gear approach is a metaphoric illustration of the border gear issues working in tandem, and emphasising the fact that a NESD process will be undertaken in a co-ordinated, cohesive way, and not by individuals or groups working in isolation. It also reinforces the notion that a multi-pronged stakeholder approach is essential to formulating a sustainable, realistic National Export Strategy. This will be undertaken to ensure there is capacity to effectively manage the strategy. The details are as follows:

• Border in-gear: This looks at the “supply side” responsiveness to international market opportunities and can be further categorised into three streams. These are Capacity Development, Capacity Diversification, and Human Capital Development.

• Border gear: This defines the sector’s operating environment and largely dictates the cost of export transaction. The categories are Infrastructure issues, Trade Facilitation issues, and Cost of Doing Business issues.

• Border-out gear: This relates to market access issues, In-Market Support Services and National Promotion.

• Development gear: This addresses key national issues of employment generation, poverty alleviation, development of disadvantaged groups and underdeveloped regions, gender equality and environmental protection.

6.0 Strategic Consideration

6.1 The border-out gear strategy, predominantly requested by export-ready firms, includes the identification of commercial opportunities abroad, the promotion of investment and the country’s national image, as well as increasing market contact through participation at fairs and exhibitions the world over. Traditionally, the Fiji Islands Trade & Investment Bureau (FTIB), Fiji Islands Visitors Bureau (FVB), Fiji Audio-Visual Commission (FAVC) and Fiji’s embassies and Trade

8 Commissions are involved. Concentration has usually been on negotiating increased access for exportable products to priority markets, and directing trade support to border-out services.

6.2 The National Export Strategy, through the identified Trade Support Network, must address the other gears of strategy as well. The National Trade Support Network is highlighted as Annex 2.

6.3 Border issues: these are related to transaction costs incurred by the business community. They typically include bottlenecks in trade-related infrastructure such as transport, communication, and the cost and availability of finance. Also included are problems of administrative procedures and documentation requirements.

6.4 Border-in gear: this gear allows for the development of new competitive capacities among exporters. These include capacity development services to build on existing production capacities, capacity diversification services to develop new business ventures to broaden the national export base and grow new exporters, and the competency development services targeted at export managers.

6.5 Development gear: this allows for the mainstreaming of external trade issues into the overall economic planning process by focusing strategic initiatives on the core development issues of poverty alleviation, employment generation and decentralisation of industry. If this gear is lacking, especially in developing economies, political commitment to export-related objectives will remain weak, since exporting will be seen to be benefiting only a few. Without political commitment, the national trade support network cannot be effective.

9 CHAPTER 3 AN ASSESSMENT OF EXPORT PERFORMANCE 1.0 Introduction

1.1 The assessment of export performance involved a critical review of the country’s economic performance over the past seven years, and of selected commodities. At the national level, selected macro economic indicators were used. Summary discussions are undertaken on key export commodities and those likely to provide opportunities in the future. 2.0 Economic Performance

2.1 The performance of the Fiji economy since 1999 has been very uneven, reflecting the economic consequences of the political and constitutional troubles experienced between 1999 and 2001. While the Government has been broadly successful in restoring stability and re-establishing economic growth, the country continues to face an uncertain future. This stems partly from the ongoing political impasse that is blocking resolution of major constitutional and leasehold land issues. As well, the economy is beginning to experience symptoms of a significant economic restructuring with the agriculture and manufacturing sectors, forced upon them by changes in international trading arrangements. 2.2 For many years Fiji benefited from preferential access to two high-price markets – the US garment market and the EU sugar market. Following the loss of Fiji’s US quota at the beginning of 2005, a number of garment manufacturers closed down their Fiji operations to relocate elsewhere. More than 6,000 workers lost their jobs, with further redundancies expected as the industry continues to contract. 6,000 cane farmers have already left the sugar industry and an additional 14,000 are expected to exit over the next two or three years. As European prices reduce and Fiji’s privileged access to the EU market is curtailed, the returns will no longer cover production costs. These figures underscore the social impact of both developments. The garment industry provided employment predominantly to women for whom there is no obvious alternative employment. The contraction of the sugar industry will impact on the farmers, as well as thousands of other workers and their families. Cane cutters, those transporting cane to the mill, and mill workers will also be affected. 2.3 Against the contraction of these two major export commodities, there have been positive developments in other sectors. Tourism has been growing very strongly,

10 providing additional employment in some parts of the country. Overseas remittances have risen from $86 million in 1999 to over $307 million in 2004. These developments have had a positive impact on Fiji’s balance of payments figures. Additionally, exports of mineral water, newly matured mahogany and non-sugar agricultural exports are all expected to make a growing contribution to export earnings over the next few years. By themselves, however, they may not be sufficient to create the faster pace of growth the country needs. Figure 1

Fiji's Export Performance 2.4 Fiji’s recent economic % Change performance can be 25 summarised as follows: 20 Growth in exports from 1995 15 to 2005 averaged 3.8%. The 10 level of growth in exports 5 for 2001 to 2005 averaged 0 0.9%. -5 -10

-15 1995 1997 1999 2001 2003 2005

Source: RBF Table 1 provides a summary of total export earnings and the percentage change for the period 1995 to 2005.

Fiji’s Exports Receipts 2.5 Fiji’s future prosperity is critically Year F$M % Change dependent upon how the Government 1995 875.9 5.1 and private sector respond to 1996 1052.1 20.1 challenges posed by a changing 1997 896.5 -14.8 external environment and the 1998 1016.2 13.4 1999 1200.5 18.1 current weakness of private sector 2000 1151.5 -4.1 investment. 2001 1217.7 5.8 2002 1128.6 -7.3 2003 1265.9 12.2 2.6 The events of 2000 brought most private sector investment in Fiji to a 2004 1200.6 -5.2 halt. Because the underlying tensions 2005 1187.9 -1.1 that triggered these events have not Source: FIBOS yet been fully resolved, it appears

11 many private sector investors – with a notable exception being investors in tourism-related projects – are holding back. Investment in visitor accommodation and related infrastructure is increasing strongly in response to the ongoing growth in visitor arrivals. The linkages between large tourism operations and the domestic economy, however, are not strong.

2.7 From late 2001, the Government implemented a plan to kick-start an economic recovery through demand-driven expansion. The idea was to substitute public sector spending and investment for the missing private sector investment. This involved adopting a pro-cyclical fiscal stance and increasing the size of the Government deficit. Between 2001 and 2003, the deficit averaged 6.5% per annum. At the same time, the Reserve Bank of Fiji (RBF) indicator interest rate was held at a historically low level to encourage more rapid domestic credit expansion to the private sector.

2.8 In response to the fiscal stimulus, easy credit conditions, strong growth in remittances and recovery in tourist arrivals, the pace of economic activity picked up quickly. Real GDP growth between 2001 and 2004 averaged 3.5% per annum. This rate of growth, however, proved unsustainable. The expansion was primarily consumption-driven. Outside the tourist sector, private sector investment did not respond to the extent hoped for. It reached a level equivalent only to about 5 % of GDP – far below what is needed to create sustainable growth. While spending by tourists and remittance-funded consumption were backed by an inflow of foreign exchange, the expansion in consumption fuelled by the Government deficit and cheap credit was not. As a result, Fiji’s foreign exchange reserves began to decline, although they remained safely above the equivalent of three months of imports of goods and non-factor services.

2.9 In mid-June 2005, the Minister of Finance & National Planning announced a change in the strategic direction of macroeconomic policy. It would henceforth focus on fiscal consolidation and the encouragement of export industries to strengthen the country’s balance of payments.

2.10 It is questionable, however, whether this switch to export-driven growth will be any more sustainable than the Government’s attempt to kick-start the economy through demand expansion – unless it maintains macroeconomic stability and addresses the many problems on the supply side of the economy that represent major impediments constraining entrepreneurial activity and hence, growth.

12 3.0 Key Selected Indicators

3.1 It is estimated that about 75% of the total labour force is working in the money economy for at least part of their income, although only a little over one-third are engaged in formal paid employment. The rest earn income from a mixture of informal employment and the sale of primary products, together with some subsistence production. Many workers manage a ‘portfolio’ of short-term jobs and other income generating activities.

3.2 The productive base of the economy has not changed greatly since 1999, although much greater changes are in prospect over the next few years. The most interesting development has been the growing competition for resources between the public sector and the private sector as the tourism industry (and associated industries, such as construction) and the public sector vie for resources to support their respective expansion. The Government-dominated community, social and personal services sector, together with the hotels and restaurants sector, were the two expanding sectors over the past six years – both contributing an additional 2% of GDP by the end of the period. The expansion of the community, social and personal services sector reflected increasing levels of Government expenditure in education and health. The expansion in the hotels and restaurants sector reflected the growing importance of tourism in the economy. The counterpart contractions occurred in the mining sector (whose contribution fell from 3% to only one percent of GDP, reflecting poor ore quality at the Vatukoula gold mine), and the wholesale and retail trade, and transport and communications sectors, which each contributing one percentage point less to GDP in 2004 than in 1999.

3.3 The relative contribution of the agriculture sector remained unchanged, but this disguises some large shifts within the sector. The contribution of sugar began to fall after 1999, by 2004 production had declined by 16% from the 1999 level. But it is still of major importance to the economy. Fisheries now contributes about 15% less, following poor catches in recent years, while the mahogany harvest is only just beginning to make a useful contribution to the value of primary production. Mahogany production is expected to increase strongly from 2005 as plantations reach maturity. The major shift in agriculture is the increasing role of cash crops and livestock. This represents a diversification towards more commercial agriculture as some farmers move out of sugar and other farmers develop from subsistence-only farming to commercial production. This requires support to develop the necessary skills, including farm business management.

13 4.0 Employment

4.1 In 2004, the total labour force was estimated to be 381,000, of which about 125,000 are engaged in the formal sector. There are about 17,000 new entrants to the labour force every year, mainly school leavers, but also some laid-off workers seeking re-employment. Of these, 9,700 find jobs in the formal sector with the remainder largely absorbed into the informal sector and cash crop, or mixed cash crop/subsistence agriculture. Labour supply clearly exceeds demand and the size of the agricultural work force obviously disguises a considerable degree of under employment. The low productivity in many other sectors, including the public sector, indicates that under employment is likely to be widespread throughout the economy. The adoption of more capital-intensive production techniques in these sectors would likely release a significant additional number of workers for use elsewhere in the economy – provided labour markets operated efficiently to help workers find new opportunities. About 8,000 to 9,000 people leave the formal labour force each year through retirement, death and emigration, leaving a net annual increase in the formal labour force of between 700 and 1,700 per annum.

4.2 There is a serious shortage of skills. Between 1987 and 2000, Bureau of Statistics data on declared migrants indicates that almost 60,000 left the country permanently. Over 10,000 of these were professional, technical and managerial workers. Between 1986 and 1996 (the two most recent census years), Fiji lost more than 50% of its professional, managerial, technical and clerical workers through emigration. The outflow of skilled personnel intensified again, if briefly, after the 2000 coup. 6,316 people left Fiji permanently in 2001. Between 1996 and 2003, about 42,000 emigrated from Fiji, of whom 8,278 (21%) were professional, technical and managerial workers. Health and education services have deteriorated because of the loss of doctors, nurses and teachers. The garment industry, for example, complained that it was constrained from expanding production and employment by the low output of its workforce, even including those graduating from its training school. It is proving difficult to lift the capacity of training institutions to improve the performance of trainees and adequately replace competent staff that have left.

4.3 Women now constitute a larger proportion of the workforce. In 1986, 11% of all legally employed workers were women. By 2000, this figure had increased to 33%. They were mainly employed in two sectors; the manufacturing sector (three- quarters of them in the garment industry) and in the community, personal and social services sector (90% of these are in Government employment).

14 5.0 Main Foreign Exchange Earners

Figure 2 - Foreign Exchange Earnings: 1999 & 2004

5.1 The main changes in 800

727 F$ million 1999 2004 significant sources of 700

600 9 foreign exchange are 55 the smaller share of 500

sugar and garment 400 366 306 291 exports and increased 300 276

200 188 income from exports 89 87 85

100 76 53 58

of water and from 0 6 Tourism Garments, Personal Sugar & Gold Fish Mineral remittances, as Textiles & Remittances Molasses Water Footwear summarized in the following table. Source MFNP

6.0 INTERNATIONALLY DRIVEN EXPORT MARKETS

6.1 International markets cover goods and services provided to foreign buyers both outside and within Fiji. Garments and sugar are clearly “internationally driven” because they involve the physical movement of Fiji goods for foreign consumption. Though tourism services may be provided within Fiji, they too compete in global markets. All these markets are driven and regulated by international institutions and trade arrangements, and powerful foreign players. But it is private interests and the consumers who create them, and who help shape the formal and informal institutional conventions that guide them. Fiji must respond to export opportunities as a unified team that includes both Government and private interests among its members.

Garments 6.2 The world textile and garment market was perhaps the most distorted international institution. The Multi-Fibre Agreement (MFA) protected the textile industries of the USA and Europe but required them to gradually remove quotas once used to help developing countries such as Fiji compete. When the MFA ended in 1994, developing countries demanded an end to protection for the developed countries’ high cost industries, and free access for their lower cost goods. The Uruguay Round responded in the Agreement on Textiles and Clothing (ATC) with new rules to end quotas in 2004. A highly professional new player, China, joined the World Trade Organization (WTO) in 2002 to compete with higher cost

15 producers in both developed and developing countries. China has efficient textile management, technical knowledge, high productivity, fashion expertise, shipping connections, vast low cost labour resources, research and development capacity, and economies of scale. China is strong in every part of the garment value chain.

6.3 Fiji labour costs over US$1 per hour and cannot compete with China’s US$0.4, Indonesia’s US$0.16, Vietnam’s US$0.22, and Pakistan’s US$0.24. Over 90% of Fiji’s garment sales were under preferential US and Australian arrangements. The US quota was half of Fiji’s TCF export sales, and an opportunity to develop from a simple “cut, make, trim” (CMT) supply to brand name manufacturing was lost. Fiji’s entrepreneurial weakness is shown in both the wasted opportunity and the fact that half of Fiji’s market was predominantly served by a single wholly foreign owned company that ceased production when the US quota ended. The SPARTECA of 1980 granted Fiji preferential non-reciprocal access to Australian and New Zealand markets. In 1987, Fiji’s Tax Free Factory/Tax Free Zone (TFF/TFZ) scheme further encouraged investment. New Zealand liberalized trade but Australia increased distortions in 1991 with an Import Credit Scheme (ICS) to promote the use of Australian fabric for re-exports to the Australian market, giving Australia access to cheaper global workers for the labour intensive, low technology CMT work, but effectively weakening development of Fiji’s capacity for procurement, design, and marketing which contributed to the weakness of Fiji’s garment enterprises.

6.4 Quotas on supplies from any one country forced developed country importers and retailers to source supplies from many countries and made them experts in managing global supply chains. With liberalized trade, these corporations will apply the expertise to lead global value chains delivering the most competitive products to their markets. Buyer driven GVCs will dominate the garment business and with Fiji’s restricted Rules of Origin under SPARTECA, we will struggle to become an attractive partner.

6.5 Fiji’s garment production peaked in 2001 and fell as ICS ended and TFF/TFZ was no longer extended. The end of the US quota continued the decline, so production will be one third of the peak after 2005, assuming Australia’s extension of SPARTECA-TCF will protect market share despite China’s competition and declining tariffs reducing the preferential advantage. Relaxing this assumption, it is quite probable that production will fall to 25% of peak production. The impact can be overstated by focusing on garment’s 23% (2004) share of foreign exchange earnings and ignoring the sector’s high foreign exchange costs and low value added. Garment’s contribution to GDP was only 5.2%; less than sugar’s 5.9%

16 and only slightly ahead of other non-food manufacturing’s 4.9%. The loss of F$30- 60m in net foreign exchange earnings and 3 to 4% of GDP is unhelpful. A greater concern is the social impact on lost employment and incomes.

6.6 While Fiji seeks continuation of a sector which has limited global competitive advantage, Australia has proposed an improved S-TCF Scheme that will reinvigorate the garment industry. A missing component of the new improved scheme was the continued exclusion of wool. This exclusion will inhibit the industry’s full potential from ever being fulfilled and Fiji must lobby for wool’s eventual inclusion. The new S-TCF scheme had other limiting criteria in that it would begin by 1st of January 2008. The Fiji Government must lobby for an earlier implementation date.

6.7 In addition, a proposed technical support facility by the Australian Government focuses on enterprises in Fiji with capacity to become competitive niche players, including those already supplying Fiji’s share of non-preferential markets. Such players may supply distinctive value-added products for niche end uses or specialize in small orders and short delivery, which are unattractive for large producers like China. This requires development of entrepreneurial skills essential for a sustainable industry linked to competitive global value chains and production networks.

6.8 To remain competitive, local costs must be contained. To have rapid wage increases without efficiency gains will lead to an early demise of the TCF industry. The Employment Relations Bill currently before Parliament must be curtailed in the adding of costs like the proposed maternity, sick pay, redundancy, bereavement and union recognition clauses. To legislate cost increases without gaining any productivity offsets will cause further problems to an industry already under stress.

6.9 There is a loud and clear message from Government that exports must improve. There must be a national campaign to encourage the expansion of Fiji’s export potential. To entice individuals and organizations to export, Government must consider a tax discount of say 50% of the prevailing tax rate, for income earned from exports.

Sugar 6.10 “The sugar industry is a key foreign exchange earner and employment provider. The industry has long benefited from artificially high sugar prices paid by the European Union under the Sugar Protocol. Unfortunately, these preferential

17 prices will disappear in the near future. It is no secret that the sugar industry, in its current state, cannot survive in a fully competitive market. The harsh truth is that a competitive market is likely to be a reality in the near future.” So stated the Minister of Finance and National Planning, in his 2001 Budget Address.

6.11 EU proposals suggest an almost 40% fall in sugar prices by 2008/9 to meet a European Council deadline set in 2001 and clearly signposted for all European agriculture since the McSharry reforms began in 1992. The EU reforms are substantially on schedule. The changes required of Fiji’s sugar sector result from much wider developments: (i) WTO moves to freer trade, replacing market distorting price and quota regimes with decoupled income support; (ii) increasingly evident unsustainability of the EU’s CAP; and (iii) WTO compliant EU reforms substantially reducing remaining price support. The changes in the ACP sugar arrangements are an inexorable consequence of these EU reforms ending preferential prices, and WTO liberalization ending quotas. The EU is committed to support ACP members through trade agreements – EPA – and development assistance through Action Plans.

6.12 The Sugar Technology Mission report on the Revival of the Sugar Industry noted that the yield and Pure Obtainable Cane Sugar (POCS) of sugarcane has gradually reduced over the years and the present yield is 62 Metric Tons per hectare for plant cane and 50 Metric tons per hectare for the ratoon crops with a POCS of 11.25. Fiji growers take more than 7 ratoons stretching up to 20 ratoons therefore, planting of cane has diminished considerably and is below 4-5%. Mana is the predominant sugarcane variety, covering 70% of the sugarcane area. The entire cane area is rain fed and there are no provisions for irrigation or for rainwater harvesting. Farm extension services at present are at a low key and due to various limitations, Sugarcane Research Centre, Lautoka has not been able to provide necessary inputs for improving field performance. The farmers earn an income of about F$2600 hectare and there is a good scope for increasing this. The other important field issues are difficulties in harvesting, burning of sugarcane and transport of sugarcane.

In respect of the working of the 4 mills in Fiji, the duration is unduly long due to poor capacity utilization and high down time. Considerable scope exists in the improvement of the performance of the existing plant and equipment, energy savings, improvements in product quality and for value addition to the various byproducts. The industry does not have any system for quality assurance and the technical skills both in the field and the factory need to be supplemented.

18 Effective measures for environmental protection are also required to be adopted. After evaluation of the above issues, the following performance targets and actions in the field and at the mills were proposed.

6.13 The targets for the field performance include increasing the area under plant cane to 25% the sugarcane yield for plant cane is targeted at 75 T/ha and for ratoons at 60 T/ha with a POCS of 13.0. The number of ratoons to be limited between 4-6.

Some of the key measures were recommended to achieve the above to enable increase the farmers’ gross income from the present F$2600 to F$3900 per hectare. (i) The recommendations include promotion of cultivation of early maturing cane varieties like Naidiri and Aiwa through various incentives including credit to the farmers for purchase of fertilizer and seeds and preference in harvesting. (ii) Intercropping of cane with short duration and short statured crops like potato, onion, wheat, pea, mustard etc. will help effective use of crop production resources, improve soil physical condition and enable the farmer to supplement his income. (iii) Adequate harvesting discipline including harvesting of green cane at the base, and following a harvesting schedule will assist both in increasing the yield and POCS. The burning of cane currently in practice, particularly in the later part of the season can be avoided through various initiatives like setting up of a benevolent fund for cane harvesting gangs, guaranteed subsistence allowance to the harvesters, limiting the duration of season to 24-26 weeks. (iv) The transport of cane at present is done both by road and rail. FSC incurs an expense of up to F$15 million per year to transport 1.5 million tons of cane and the growers incur an expense of F$8 million for transport of the balance cane. It is noted that the transport of cane by rail causes both loss of weight and POCS and thus equally affect the growers and the millers. Also the adoption of quality assurance system will be of greater benefit to the growers transporting cane by lorries.

6.14 Landell Mills and other expert studies identify the systems and human resource priorities in restructuring. These are now being addressed but will need several years. Grower/miller relations must move from the inherited “us-vs-them”

19 relationship to one of mutual respect and trust, reflecting mutual dependence. Farmers must not be taken for granted as they have choices in use of farms and labour, while the FSC has no choice in the use of its specific capital in mills, other than to close. Growers are rational decision makers. Most marginal farmers see sugar as easy cash with low inputs. They will exit sugar as lower prices end the easy cash, adding perhaps 13,000 growers to the 7,000 registered growers who have already gone. The remaining 4,000 to 5,000 are professional “farm businessmen” who grow cane at the lowest unit cost. They respond to price signals, so will react to quality-based prices but not exhortation and demonstration when cane is priced only by weight. Quality based prices will cause them to target sugar at the lowest unit cost. It is not farmers who are irrational in the sugar sector. A revitalized FSC, working in a professional partnership with farm businesses, can be the basis of a viable sugar sector producing over 300,000 tons per year.

6.15 In the context of EU proposals, an Action Plan Outline is proposed as a starting point for a detailed version, using the outputs of earlier studies as the basis for implementation. The most urgent actions are: (i) establishment of a stakeholder partnership of MA, FSC, SCGC and NLTB for overall planning and implementation; (ii) introduction of cane quality payments to give growers’ effective price signals; (iii) negotiation of a Pacific EPA to ensure that WTO compatible quotas continue; (iv) constrained production targets to avoid false hopes of easy solutions; and (v) limited efficiency related equipment purchases.

6.16 EU support requires that a participatory planning process be adopted, which can be developed for subsequent monitoring and plan review. A pro-poor orientation must also be integrated into plans. The initial planning will anticipate responses to price reductions: (i) those who will stay in sugar and improve; (ii) those who will exit sugar but continue farming; and (iii) those who will seek off farm incomes – including growers, mill workers, cane cutters and landowners amongst the adversely impacted.

6.17 Those staying in agriculture must be supported in a farming systems approach to promote whole farm planning and management. This requires field level coordination between MA and sugar support services. ALP addresses some of the non-sugar needs but the increase in the number of exiting farmers may require additional support for diversification as well as for currently unsupported sugar farming improvement. For off-farm activities, ALP provides some support, but may be overwhelmed by the scale and speed of exit. The Action Plan can identify and

1 This refers to short haul visitors

20 provide for needs to extend and increase ALP initiatives as well as meet newly identified needs. To support the development of commercial management at FSC, planning should be made an internal management responsibility with minimal external intervention, based on a management request for financial or technical support to develop management and systems capacity for increased efficiency and effectiveness.

Tourism 6.18 For Fiji to compete with other world destinations, stakeholders must ensure that visitors’ expectations in terms of overall environment and the quality of service, meals and facilities are met. The players closest to the customers are the travel agents in developed countries. Their business is to sell the holiday rather than the destination, and they will respond quickly to negative reports and developments.

6.19 Destinations must compete to be prominent in agents’ portfolios and to attract investment by hotel developers and top shelf management groups. Fiji must meet the needs of: (i) Fly and Flop1 tourists from Australia and New Zealand who want predictable, price competitive international beach packages undisturbed by distinctive cultural or natural conditions; (ii) Travellers, mainly from Europe and North America, on a short stopover on a lengthier, low cost holiday; and (iii) Niche, high spending, special interest tourists prepared to pay for long haul travel and high quality facilities with activities such as diving or sailing, and special events, like honeymoons. Again, Europe and North America are the main sources. Unlike Fly and Flop visitors, niche tourists seek natural and cultural attractions and high quality facilities. They differ from eco-tourism travellers by willingly paying the high costs needed to protect the environment from the pressures of tourism.

6.20 The Fiji tourism industry demands the input of many players – resource owners, resort operators, farmers, agri-businesses, utility operators, bankers and investors – and can only be as competitive as the economy in which it operates. The role of Government is to facilitate and support private sector involvement and ensure an appropriate overall quality. Law and order and environmental standards must be enforced, and a secure environment for foreign investment is maintained. Government performance in tourism regulation has been characterized by ineffectiveness. The major failure has been in the slow enactment of legislation for sustainable, environmental management of tourism resources, still to be enforced. This has sometimes been compounded by cheap, backpacker eco-tourism that fails to provide environmental protection of resource owners’ vulnerable assets.

21 6.21 Access to appropriate areas of land is essential for tourism development. Some 90% of land in Fiji is native land managed in trust by the Native Land Trust Board (NLTB). NLTB represents the landowners’ commercial interests in supplying land to the tourism, and other sectors. Fiji’s land tenure systems are known to have complicated some investment decisions by reducing the comfort level of potential foreign takers. In 2004 NLTB adopted a Tourism Policy and proposed leases offering certainty and guarantees of access. Terms favour high-end resorts and niche tourists, to fund social needs and create employment and SME opportunities. NLTB focuses on the ability of tourism to generate returns for the resource owners, as opposed to an emphasis on the volume of tourists. The NLTB entrepreneurial approach aims to reduce transaction costs and increase market efficiency, while at the same time addressing environmental sustainability issues and protecting the value of its assets.

6.22 Government policy has restricted access to the airlines business, in the interests of protecting Fiji’s 46% foreign owned flag carrier, as well as domestic carriers, of which the largest is majority foreign owned. As a result, Fiji has direct flights to only six tourist source markets, compared to the Maldives’ 21, despite having no flag carrier. The poor quality of subsidized and protected domestic services – both air and maritime – limits the ability to spread tourism beyond the near-Nadi core area, and forces other locations to rely on high cost private services.

7.0 Product Markets

Agriculture, Forestry and Fisheries 7.1 Although there are entrepreneurial farm business people in both the indigenous Fijian, and Indo-Fijian communities, the history of indigenous commercial development has left the community entrepreneurially weak. This weakness is shared by most Indo-Fijian farmers growing a single cash crop for a monopolistic miller. The major economic decisions for both communities were made by institutions on which they depended. The lack of market-creating entrepreneurs is reflected in a sector dominated by traditional subsistence farming (38% of 2004 agricultural GDP) and sugarcane (27%), and in which food imports match total domestic food production. Subsistence can only grow slowly and sugar offers no real growth prospects. Future growth depends on the market driven demand for other crops (16% of agricultural GDP), livestock (4%), and the problematic publicly managed forestry (4%) and fisheries (9%) sub-sectors.

22 7.2 Agriculture is dominated by small farms, with many smaller than 1ha and half the larger farms less than 5ha. There are few farms of more than 100ha. Livelihood strategies require off-farm incomes and subsistence cultivation for household food security. Agricultural commercialization and diversification requires support both for farming and off-farm employment for smallholders. Government has provided guidance and subsidies to farmers, reinforcing the dependency culture and blocking entrepreneurial market creation. Market destroying interventions spawn others as the private sector is further weakened and Government responds with more of the same. There is a continuing illusion that state/communal capitalism can work, despite consistently demonstrated failures in sugar, wood products, livestock and horticulture. Future plans stress the need for a change from the dependency mindset, to commercial agriculture where entrepreneurs create new markets.

7.3 There is less progress in forestry and fisheries. Forestry growth is projected at 11%, based on improved pine management and new, sustainable mahogany harvesting. This is despite declines in reported production and mis-statement of harvests and stocks in recent years. Annual replanting of 1.1% of mahogany plantations seems low. The extent of deforestation is also a concern, as is the failure to protect resource owners’ fisheries assets. Fish are readily sold on international markets. Large, often state- sponsored fishing fleets, having devastated their home fishing grounds, now seek to exploit ours. The Ministry of Fisheries and Forests accommodated them by abandoning plans for sustainable management for short-term gains. Future growth for both forests and fisheries will require the implementation of reforms to restore and protect our natural resources.

Non-sugar Crops 7.4 Non-sugar crops and livestock contribute 8 % to GDP, around 11 % of agricultural exports, and benefit about 50 % of the population. The crop sector consists of the traditional dalo, cassava, ginger and yaqona, tropical fruits such as pineapple, pawpaw and mango, vegetables, spices, cocoa and coconut products. Beef, dairy, pork, poultry, sheep, goat and honey make up the livestock sub-sector.

7.5 The performance of the sector over the last decade has been mixed. While production and exports of some commodities such as dalo and vegetables have gradually increased, others have stagnated or declined. Copra and cocoa have had a poor decade with declining production and exports.

23 7.6 Future potential is with products where Fiji has a competitive advantage, such as in high value niche exports and traditional food crops. Products that give the best returns from labour and land resources include traditional food crops, fresh fruits, processed fruits, processed nuts, cut flowers, vegetables, spices, herbs and medicinal plants, handicraft raw materials and certified organic products. A new product also has promise. Virgin coconut oil is in demand by local manufacturers for use in soap products and moisturizers. It is also used as a food supplement. Renewed efforts by the Coconut Industry Development Authority (CIDA) to diversify into products including virgin coconut oil, as well as coconut timber and bio-fuel, are predicted to change the face of that sub-sector.

7.7 Copra production has been declining steadily over the past 40 years, and CIDA was established to revitalize the industry. In 2005 CIDA received the Government go-ahead to begin putting its plans into action. Throughout the 2007-2011 Strategic Development Plan period, the coconut industry revitalization programme is to include the clearing and milling of senile palms; the replanting of high yielding trees; product diversification and market development for new products; the decentralization of small-scale milling; a bio-fuel study on copra oil; the promotion of effective mixed farming practices, local consumption of young whole nuts and the processing of other coconut palm components.

7.8 The CIDA coconut timber mill has already begun operations. Foreign exchange earnings are expected to rise quickly, reaching F$150 million annually in 10 years’ time on a sustainable basis. With increased resource levels, manufacturing of other coconut products and downstream processing becomes a real possibility. There is potential for fuller tree utilization through the commercial production of coir, fibre products, bio-fuel, virgin coconut oil, coconut water and toddy. The potential income resulting from fuller tree utilization could surpass even foreign exchange earnings from tourism, and sugar.

24 7.9 A summary of the average contribution to the economy by the non-sugar sector is shown below: Table 2: Overall analysis of the performance of the Fiji Agricultural Sector and contribution to the economy

Sub-sector Value of production Foreign exchange Employment and trend earnings/or saving Subsistence 30-40% of agricultural GDP Substantial as foreign Majority of agriculture – steady growth exchange saving economically active population Sugar $250-$300 million $250-$300 million 23,000 contract In decline growers, 500 mill workers, and 17,000 cane cutters, but declining prices. Other bulk $4-$8 million from copra $4-$8 million. The 100,000 people export crops production in decline. value of coconuts in benefit directly or (copra and Increase in local trade and subsistence situations indirectly. Contributes cocoa) consumption of $1 million. is more than double $7.5 million to the this amount rural economy, paid direct to farmers Horticulture and $50 million. $30 million 250,000 days of niche Becoming significant employment export crops and growing rapidly generated by ginger. Equivalent employment estimated for taro Commercial $120 million, steady growth Equivalent to the 70% of farms are non- food crops value of production sugar cane Rice $6 million and declining With most production 5,000 farmers, usually now rain fed, almost rotated with sugar equivalent to value of cane production Livestock Poultry 7,700 tonnes. $35 Net savings small for Number of million and increasing poultry and pork, high commercial) farms Dairy products $23 million for dairying and beef - Dairying 2,000 and declining Beef 1,600 - Beef 1,800 tonnes and declining - Pigs 14,500 Pork 750 tonnes and - Poultry 1,000 steady Sheep meat 25 tonnes

Source: MA

25 8.0 Forestry

8.1 The sector experienced irregular growth between 1999 and 2003 and an overall declining share of Gross Domestic Product. Growth was positive only in 2000 and in 2003, largely due to the commencement of mahogany harvesting. Export earnings from timber and other wood-based products average around F$42 million each year. In 2003, the recorded earnings were F$33.2 million.

8.2 Logs are currently processed into sawn timber, veneer, plywood, block board, moulding, poles and posts and wood chips, with total export volumes averaging 266,000 m³ annually. Most of the wood products are sold to Australia and New Zealand, while wood chips are sold exclusively to the Japanese market. The American market consumes approximately 40% of all veneer products. Other exported products, such as mouldings and other finished components, account for at least 6% of annual export earnings.

8.3 Pine wood chips are the leading export with 221,000 m³ sold in 2005, down from 241,000 m³ in 2004. Current pine timber and pine chip exports are mainly from Viti Levu. Vanua Levu pine production and exports have the potential to earn F$20 – $25 million from 2006 onwards. The new Wairiki Port will facilitate the export of wood chips from the region. Under phase one of the Fiji Pine Group (FPG) processing plan, a F$5 million chip mill to process 150,000 tonnes of pulp logs should be operational by December 2006. Phase two of the project, the construction of a F$10 million mill to process sawn logs, will commence in 2008. FPG has invested F$24 million to more than quadruple its power production capacity at Tropik Wood Industries Ltd from the present 3 megawatts to 12.3 megawatts in 2007. The power is for both internal consumption and for sale to the Fiji Electricity Authority (FEA). Commencing in 2007, Fiji Pine Ltd is to plant 1,200 hectares of plantations annually, as fuel for the cogeneration plant in Drasa.

9.0 Marine Product Sector

9.1 Fiji’s Marine Product Sector makes an extremely important contribution. It is estimated that more than 6,800 citizens are engaged in either commercial or subsistence fishing, with about 9,100 people employed in the sector in total. Operations offshore and inshore (artisan and subsistence), together with aquaculture and collection fisheries (coral, live rock, bêche-de-mer and trochus) contribute F$82 million to the economy. This is the third largest natural resource based sector, behind sugar and other crops.

26 9.2 Suppliers of inputs to the sector (e.g. fishing gear, slipway services, docking facilities, etc) contribute F$4.2 million to GDP.

10.0 Manufacturing and Mining

10.1 Existing rules governing the setting up and operation of productive enterprises in Fiji are somewhat complex. They include a weak legal framework and a multiplicity of licensing and price controls. Reforms are in progress, but the SDP 2005- 2007 notes a review of red tape is delayed by two years, and annual reviews of investment incentives have made no significant progress. The involvement of weak institutions and tardiness in their reform increases transaction costs and uncertainty for investors. Manufacturing is therefore generally unattractive to potential partners in Global Value Chains and Production Networks, and there are few market creating entrepreneurs in the sector.

10.2 In 2004, excluding the internationally driven and distorted garment and sugar sectors, a combined total of some 9.2 % of GDP was contributed by manufacturing (with 7.8%) and mining (1.4%). Mining, wood and paper products have been in decline for the past 5 years, but other non-food manufacturing sub-sectors have grown at rates of 3 to 5%. The entrepreneurial metal goods sub-sector averaged an impressive 15%. Given the chance, there is no doubt entrepreneurial capitalism can deliver sustainable growth. Despite the decline of the sugar sub-sector, agro- industry led manufacturing grew at an average 5.1%. This was led by the 28% average growth of non-alcoholic drinks, including the entrepreneurial Natural Waters of Viti Ltd.

10.3 Government intervention and communal capitalism has failed to provide the required export growth and debilitated entrepreneurial capacity amongst the country’s citizens. Government is aware of the changes needed but appears to lack the will to enact and enforce these reforms. Cabinet has made decisions but the administration has been ineffective in implementing decisions to remove the rent seeking opportunities that inappropriate institutions and public sector management create. The capacity of entrepreneurs to create markets for sustainable economic growth seems to have been sacrificed for the sake of bureaucratic systems, which serve bureaucratic rather than national interests.

27 11.0 Mineral Water

11.1 The industry employs over 200 people in its bottling companies. Investment in infrastructure to date is estimated at over US$80 million, and average annual foreign exchange earnings in excess of F$60 million have been achieved. The leading player, Natural Waters of Viti Ltd, has been effectively marketing Fiji internationally.

12.0 Services

12.1 Services represent a vital sector of the Fiji economy. The scope of activities is diverse, and includes infrastructure services upon which all economic activity depends, such as postal, telecommunications, audiovisual, financial and transport services. Fiji also offers professional, distribution, computing and research services in support of the business sector, as well as construction, education, health, environmental and recreational services, and accommodation, restaurant and travel services for the tourism and hospitality sector.

12.2 Clearly, the Fiji services sector presents opportunities for all types and skill levels of labour, all magnitudes of capital investment, all degrees of technological complexity and all spans of operations from the local to the global. The strength of the services sector is recognized as a critical determinant of economic development and prosperity. Services account for 50 to 60% of economic activity in most developing countries, and over 70% in most developed countries. In Fiji, services account for over two-thirds of economic activity. They generate significant investment, employment and foreign exchange earnings.

12.3 Global Foreign Direct Investment (FDI) in services far exceeds that of both goods and primary products, yet services account for only 20 % of world trade. This demonstrates the great scope for growth internationally, and Fiji is no exception.

13.0 Audio Visual

13.1 The Audio Visual (AV) Industry in Fiji is new and broad-based, encompassing film and television production, video, music, information technology and electronic commerce. It was formally established in July 2001, with the formation of the Fiji

28 Audio Visual Commission (FAVC), which became operational in April 2002. The FAVC is tasked to develop the whole industry, but due to budgetary constraints has so far focused its efforts largely on film and TV productions.

13.2 The promotion and development of the AV industry is supported by legislation such as the FAVC Act, the Copyright Act, the Cinematographic Act and the Income Tax Act (Schedule 6) which deals with tax concessions. There is also strong Government support in facilitating the movement of foreign cast, crew and equipment into and out of the country for film and TV productions.

13.3 The lack of quality production facilities limits the attractiveness of shooting film and TV productions in Fiji, and the proposed Studio City Zone at Yaqara is yet to materialize. However, as an interim measure to encourage production companies to set up in Fiji, Government passed legislation in 2004 declaring the establishment of temporary studio city zones to be located anywhere in the country for a maximum period of 10 years.

14.0 Information Communication Technology

14.1 The ICT sector in Fiji is in its infancy, but can already be divided into three major sub-sectors: Business Solutions Providers, Business Process Outsourcing (BPO) Providers and IT Training. The three potential export earning activities are: Software Development, BPO and Computer Based Training. There are currently two large BPOs operating in Fiji, namely, Quest and Affiliated Computer Solutions. There are also two developers of Software, namely, Software Factory Ltd and Stepstone Pacific. There are numerous providers of ICT education and training.

14.2 The contribution of the communication sector to GDP over the last five years has varied, with 4.2% in 2003 and 1.5% in 2004. It is forecasted that in 2006 the contribution to GDP will be 4 %. Its current status is reflected in the increasing demand for information and communication technology across the broad spectrum. The national infrastructure is now 99.9% digitalized, which is seen as a strength for the ICT providers. Fiji is an integral component of a state of the art international fibre optic system, the Southern Cross Cable Network (SCCN), that provides direct connectivity with Australia, New Zealand and the United States. An alternate route for international connections is provided via the Intelsat Pacific Ocean Regional (POR) satellite.

29 14.3 Monopolies are prominent, particularly in the provision of services. One example is Amalgamated Telecom Holdings Ltd (ATH), which owns Vodafone Fiji Ltd, Telecom Fiji Ltd and Connect Internet Services operates under an exclusive licence arrangement that expires in 2014. Another example is Fiji International Telecommunications Ltd (FINTEL), which has an exclusive license to provide international services. Liberalization of the telecommunication sector is critical for the development of the ICT sector. The absence of competition is the key problem facing the telecommunications sector, contributing to high prices for international telecommunications and for leased lines. The high price of international voice and data communications is a major stumbling block for the development of ICT services, including internet development.

15.0 Education & Training

15.1 Since Independence, impressive progress has been made in education. Enrolment rates have increased at all levels, greater geographic and gender equity have been attained, and numerous vocational training institutions have commenced operations to supply much needed skills to those joining the workforce. However, while success in quantitative terms must be acknowledged, emphasis should now be placed on improving the quality of education and training. The greatest challenge is to address the relatively poor performance of indigenous Fijian students, in light of their low pass rates in external examinations, and their subsequent minority role in the economy.

15.2 Generally, the State is responsible for the delivery of education and training services to pre-schools, schools, and training centres. This includes the provision of curriculum frameworks, policy guidelines, qualified teaching personnel, and programme support to controlling authorities and education and training institutions. Government also has the responsibility of ensuring that standards are met and maintained, through the regulation and recognition of education and training providers, and the accreditation of programme delivery. Support is rendered to schools’ management for the effective running of schools, and financial assistance is given for the construction and maintenance of school facilities. Through its Affirmative Action Programme, Government is trying to improve rural education standards, enhancing Fijian and Rotuman education, and education opportunities for disabled students and out of school youth. Under the Qarase Government, the total annual allocation to education is approximately 20 % of a total national budget of $1.5 billion. This represents the biggest allocation of all portfolios.

30 15.3 Despite the successes of the formal education and training systems, the considerable extent of emigration since the late 80s has created a deficiency of human resources, particularly at the skilled and professional level. This is evident in the private sector, where productivity suffers, due largely to the lack of skills and low individual performance levels.

16.0 Financial Services

16.1 The financial services sector plays a critical role in a market economy, providing a means of channelling savings into various investment opportunities and driving economic growth. It provides the capital necessary for the growth of existing businesses and the start-up capital needed for new businesses. It also allows Governments to finance new debt issues and support programmes and services. At the same time, the sector enables ordinary people to carry out their everyday financial transactions, manage their savings, and insure against risk. The sector is also a significant contributor to Fiji’s economic growth and to job creation.

16.2 Fiji has a well-developed financial sector by regional standards and is open to full foreign participation in most major sub-sectors of banking and insurance. This is reflected both in the composition of the banking and insurance sectors, and the quality of services offered. The retail banking sector, for example, consists of multiple branches of three banks with origins in Australia and one India, as well as the national bank. The sophistication of services offered is a direct result of the participation of world-class foreign banks. The stability of the sector is ensured by the prudent supervision of the RBF, which acts as an independent financial regulator under the RBF Act. The insurance sector is likewise dominated by branches of foreign insurance companies, and is again subject to supervision by the RBF. Other financial institutions offer investment, credit finance and financial management services. Local companies are increasingly involved in money exchange, stock broking and funds management, successfully competing with the provision of these services by established foreign banks.

16.3 With ongoing developments both domestically and internationally, progression towards a still more developed financial system for Fiji is inevitable. An important challenge is to properly integrate these changes.

31 17.0 Health

17.1 The rising demand for complex health services has considerably changed the health system in Fiji. From preventative, the emphasis is now on curative, because of an increased prevalence of lifestyle diseases. Generally, the provision of health services has been the responsibility of the public sector, with limited private sector involvement. On average, the state allocates 8 to 10 % of its total annual budget to health services.

17.2 The public health system provides basic primary and secondary health care. With the increasing demand for more specialised health services, the private sector is beginning to play a critical role.

17.3 A major problem for the Fiji public health system is that of retaining highly trained and skilled personnel. Another is the limited funding provided by the Government. There is an urgency to improve the efficiency and effectiveness of the delivery system and to encourage PPP in meeting the demand for health care services.

17.4 There are opportunities for private involvement in the provision of health services particularly in tertiary care and support for medical tourism. However, the supportive environment needs to be nurtured so that it can be a catalyst to support new enterprises.

18.0 Labour Mobility

18.1 As with most developing countries, the “temporary movement of natural persons”, or labour mobility, is an area of special interest in our negotiations with developed countries on the General Agreement on Trade in Services (GATS). The current negotiations on an Economic Partnership Agreement (EPA) with the European Union, and the future inclusion of services in the Pacific Island Countries Trade Agreement (PICTA), will allow the mobility of labour.

18.2 Although Fiji has not made any further commitments on the “temporary movement of natural persons” in the above agreements, the country currently provides services through labour mobility in nursing, care-giving, peacekeeping, private personnel and property security, and seasonal employment. A majority of such services have been facilitated through private companies and overseas employment agencies,

32 with the exception of military peacekeeping duties, which are handled by the United Nations.

18.3 The major advantage of labour mobility for Fiji is the large amount of remittances repatriated to Fiji by Fiji nationals working temporarily abroad. Labour mobility has now become a major foreign exchange earner for Fiji.

18.4 The obvious downside is that skilled service providers temporarily employed in foreign countries sometimes decide to take up citizenship there, or remain in the host nation illegally.

33 CHAPTER 4 GOVERNMENT POLICY AND STRATEGY IN SUPPORT OF EXPORT DEVELOPMENT

1.0 Introduction

1.1 Fiji does not have a holistic or all-encompassing strategy to support export development. This is the first time an effort has been made to assemble an integrated export strategy through a co-ordinated approach, with the private sector and Government working together. Previous efforts to support exports have been directed by one sector or the other, to particular goods or services, based on the need at a particular point in time.

1.2 While a strategy may be effective with a particular sector or commodity, it may prove counter productive with others. This piecemeal approach creates inconsistency, uncertainty, and an uneven playing field.

1.3 As successive Governments have continued to stress the importance of exports in achieving sustainable growth, a two-tier approach has been the cornerstone. Emphasis has been placed on entering new markets, and exports diversification.

2.0 Policy Trends

2.1 Since independence in 1970, successive Fiji governments have built up an economic management system reliant on a high degree of policy intervention and control over private sector activities (at either national or local level, or both). This ‘command and control’ approach has created a network of veto points that has stifled economic development. In many cases, these veto points are operated by Ministers and other officials who enjoy a large measure of discretion in deciding whether to approve or reject applications for licences, permits, or investment approvals. Even where these are freely and promptly granted, the compliance costs imposed on the private sector are considerable. This is not an encouraging environment for entrepreneurial activity. It increases transaction costs and invites expropriation.

34 2.2 The incentives provided through a complex system of tariffs, price controls and import licences, together with economic aspects of the Affirmative Action programme, encourage the development of low value added activities. They are biased against higher value added activities in the agricultural sector, and place a high premium on socially unproductive rent seeking activities. Any increase in the level of protection imposes a growing cost disadvantage upon the tourism and export sectors of the economy.

2.3 Fiji became a member of the WTO in January 1996. At the time of accession, Fiji bound all its agricultural tariffs and some 43% of industrial lines (in most cases at rates above levels than current). Under the General Agreement on Trade in Services (GATS), Fiji also scheduled commitments on tourism and travel-related services.

2.4 Fiji is a member of five regional trade groupings and/or agreements. They are: (i) the Melanesian Spearhead Group (a free trade agreement involving Fiji, Vanuatu, the Solomon Islands and Papua New Guinea); (ii) the SPARTECA – a non-reciprocal preferential agreement covering the Forum Island countries and Australia and New Zealand; (iii) the Pacific Islands Countries Trade Agreement (PICTA – a free trade agreement involving all Pacific Island developing countries); (iv) Pacific Closer Economic Relations (PACER – an agreement involving all PICTA members plus Australia and New Zealand); and (v) Fiji is a signatory to the Cotonou Agreement and a member of the ACP group engaged in negotiations with the EU for an Economic Partnership Agreement (EPA) with the EU.

2.5 Fiji also has entered into non-reciprocal and reciprocal bilateral trade agreements with its closest neighbors and main trading partners, Australia, New Zealand, Tonga, Samoa and Papua New Guinea.

2.6 Fiji’s membership of the Melanesian Spearhead Group and PICTA, together with bilateral agreements with island neighbours, were considered the first steps in preparing our economy for competition in wider international markets. Given the broadly similar nature of PIC economies, none of these agreements is likely to lead to any significant increase in trade flows. More importantly, the rules of origin associated with these agreements are the major constraint on the extent to which Fiji can expand its markets in these countries. SPARTECA is still important as the vehicle for preferences, albeit at a declining rate, for garment exports to Australia. PACER provides some trade and investment facilitation advantages for Fiji, but it is not likely to become a major influence on trade flows unless Fiji is

35 required to accord concessions to any other non-PICTA country (or the EU, as part of the EPA negotiations), in which case similar concessions would have to be extended to Australia and New Zealand, the sources of most of Fiji’s imports. The most significant regional agreement for Fiji in future is likely to be the EPA being negotiated with the EU, because the prospect of any preferential quotas for sugar exports to the EU after 2008 will depend upon the inclusion of sugar in this agreement.

2.7 The objectives of Fiji’s trade policy have changed considerably in the years since independence. An initial period of heavy protectionism was followed from 1989 by deregulation through a reduction of protection levels. From about 2000 this was succeeded by a progressive increase in the levels of protection granted to domestic manufacturers and/or producers.

2.8 In the early post-independence years, the Government of the day encouraged the development of import substitution industries through high tariff protection, import licensing and quotas. Among the industries established at that time were flour milling, beef and fish canning, plastic products assembly, biscuits, beer, soft drinks, cigarettes, steel roofing, paints, cement, matches and soap. In the early 1980s, following a series of natural disasters and depressed world prices, growth of the sugar sector began to falter. The Government then accelerated its industrialisation drive, but the high rates of effective protection and the high cost disabilities this imposed on export industries began to compound the economic contraction. By 1987, it was clear that import substitution policies were not working. Economic policy then switched to deregulation and export-led growth. In 1989, most import licensing was removed, and replaced by a simplified tariff system that allowed a progressive reduction from a maximum tariff of 50 to 20%.

2.9 The outward-oriented approach of the late 1980s persisted up to 1998, when the Government increased tariffs on most locally manufactured items to 35%. The rate was reduced to 30% following the 1998 devaluation and then to 27% in the 1999 budget, at which level the protective tariff has remained.

2.10 The national budget for 2001 significantly increased the cascading gradient of the tariff structure with substantial reductions to its lower bands, as part of an investment package to promote faster economic growth. The import duty on production inputs was reduced from 10 to 3% and the duty on intermediate goods fell from 15 to 10%. The duty on construction materials and capital goods was reduced from 10 to 3%. At the same time, a Duty Suspension Scheme (DSS) was introduced to allow

36 exporters to have access to duty-free imports. There were also selective reductions on basic items (rice, tea and powdered milk). Previously granted concessionary rates for flour and sharps and edible oil were confirmed as the new standard rates for those items. Protective duties on poultry and beef increased to 27%. The 2001 Budget also extended the zero duty periods for approved investors. The 2002 Budget saw more increases in protective tariffs.

2.11 The 2003 Budget consolidated the tariff structure by reducing the number of bands from six to four: 0, 3, 15, and 27%. All goods previously attracting 10% duty were placed in the 15% band. Food items previously attracting 20% were also placed in the 15% band. At the same time, the protective duties on canned fish and white rice were raised from 20 to 27%.

2.12 The 2004 Budget increased some duties from 3 to 27% (chemical pesticides, chocolate wafers, structures and parts of structures of iron and steel, and tubes used in vehicles) while reducing the duty payable on aerials and aerial reflectors from 27% to 3, on mosquito destroyer Vape Mat from 27% to 15 and on oil, air and fuel filters for motor vehicles from 3% to 0. The basic pattern appeared to continue to be protective – to raise duties to 27% on products now being manufactured in Fiji and to reduce the duties on products no longer being manufactured locally.

3.0 Existing Incentives to Support Investment Associated with Export Development

3.1 To encourage investors to participate in the export sector, a number of specific incentives have been put in place.

3.2 The broad incentive categories are listed below:

Incentives directly targeting exporters o Export Deduction Income o Duty Suspension Scheme o Vanua Levu Export Income Deduction

Other incentives (available to all taxpayers who qualify) o 40 % investment allowance

37 o Small & Micro Enterprises o ICT incentives o Agricultural incentives o Incentives for new investment, or re-investment, for food processing and forestry

3.3 Export Incentives no Longer Valid but Claimed by Taxpayers Holding on to a Tax-Free Licence o Tax free factories incentives o 3rd,5th & 7th Schedule of Income Tax Act o Export promotion incentives Detailed information regarding current incentives is appended as Annex 3.

4.0 Effectiveness of Incentives

4.1 Some incentives are sector-specific in nature, such as the one for the tourism industry encouraging investment in projects of above $10 million and $40 million in value. Government’s objective of attracting investment in superior tourist accommodation and facilities is being achieved, but at a cost. The surge in quality hotel construction is not being matched by corresponding development in the towns. Integrated hotel developments of the kind seen at Denarau, Natadola and Momi Bay are therefore designed to be self-sufficient. To ensure transparency and accountability, efforts have been made to insert provisions for such developments in local Government legislation. However, since the developments are generally located beyond town boundaries, these provisions are ineffective.

4.2 Incentives available under the Hotels Aid Act are being abused by some developers, with companies applying for both Short Life Investment Package (SLIP) and HALF-SLIP concessions. There are currently five known cases of ‘double dipping’ in which developers have deliberately altered their company structures in order to technically qualify.

4.3 Incentives offered to the garment industry in 1988 were tied to preferential trade arrangements under SPARTECA. This enabled duty-free, unrestricted access for Forum Island Countries to Australia and New Zealand. Immediately these preferential trading arrangements came to an end in 2004, the industry saw the

38 withdrawal of key investors. One manufacturer moved to Hong Kong in order to obtain the Free Trade Agreement benefits between Hong Kong and the United States. This is just one of many instances of investors staying here only for as long as it suits them. They have no long-term interest in Fiji, or in helping Fiji to grow its economy.

4.4 In these examples we have tried to show that while Government has produced incentives effective in attracting foreign investment, the administering agencies have not closely monitored their proper use, or ensured they achieved their intended aims. Unless steps are taken to correct this situation, unprincipled business people will continue to take advantage of the system.

4.5 In addition to incentives provided by the Government in support of exports development, funding for specific export-related efforts have been allocated through the annual budget, as shown in the table below.

Table 3: Annual Budgetary Provisions F$(M)

Organisation 2003 2004 2005 2006

Agriculture Marketing Authority (AMA) - 1 2 2 Fiji Ag Trade .25 .10 .15 .15 Grants to CIDA .10 .10 1 1.3 Bilateral Quarantine Agreements .14 .14 .25 .28 The table shows an irregular pattern of Upgrading Quarantine Surveillance - - .52 .52 special assistance Extension Agriculture (dalo, fruits, bhindi, 1.69 .56 1.3 .63 to most sectors, in etc.) contrast with the Fiji Visitors Bureau 13.00 13.00 13.00 13.00 consistent levels Fiji Pine Ltd 0.6 0.6 0.6 0.6 received by some Monitoring & Surveillance of Logging others. - - - 0.2 Operation (MFF)

Seaweed Development (MFF) 0.2 0.10 0.1 0.1

Aquaculture (Prawns) (MFF) 0.5 0.5 0.5 0.2

Fiji Investment Corporation Ltd (FICL) 1 1 1 1

Total 17.48 17.10 20.42 19.98

Source: MFNP

39 5.0 Assessment of Government Policy in Support of Exporters

5.1 A basic problem with Fiji’s current protection policy is that it creates incentives that encourage manufacturers and producers to concentrate on low value-added activities, and penalises those who try to move up the value chain by increasing the value added within Fiji.

5.2 The essential point to note is that the cascading structure of the tariff rate system can have as much, or more, impact on the pattern of incentives as the levels of tariffs. The same tariff rate can produce very different effective rates of protection (ERPs), according to the proportion of value added in each product. Reducing all tariff rates across the board, as was the policy direction between 1989 and 1998, does not necessarily eliminate the perverse incentives that a cascading structure creates. The greater the degree of cascading, the higher the rate of effective protection for a given value added ratio. The lower the value added ratios of enterprises within that cascading system, the higher will be the ERP that those enterprises enjoy. The message for policy makers is that a cascading tariff favours manufacturers and producers who add relatively little value.

5.3 The strong bias towards investment incentives imparted by the tariff structure overrides the normal calculations of economic efficiency so that it becomes difficult to tell where Fiji’s comparative advantage really lies. There is not necessarily anything wrong with concentrating on the development of assembly, or light manufacturing activities, as long as Fiji can undertake these activities at, or close to, world prices. On the other hand, if it is true that Fiji should potentially be able to carve out a comparative advantage in agricultural and food processing industries, then it makes no sense to bias investment incentives so much against this end of the added value spectrum.

5.4 Trade policy decision-makers need to pay more attention to the effective protection outcomes of their tariff decisions in order to create greater uniformity in effective rates of protection across the economy. The primary policy objective for the tariff system should be the adoption of a low and uniform rate structure. The most effective way that has been recommended by experts is the adoption of a framework for tariff setting that focuses upon the incentives being created taking into account the following:

• It must be made known that, henceforth, tariff rates will be set with regard to their impact on ERPs. A maximum acceptable ERP would then be determined, say 35%,

40 taking tariffs and all taxes into account. It should be made clear that this may be later adjusted to a more suitable long-term level.

• As a matter of policy, there would be no changes in tariffs that would result in ERPs above this level. This requires that an agreed method for calculating the ERP be established and made public. (It also implies that adequate technical capabilities are available within the tariff-setting authority to undertake this analysis.)

• As a practical matter, a minimum ERP of, say, 20% would also need to be established. Tariff changes would not be made that would reduce an activity’s ERP below this level. This is only likely to arise when tariffs for raw materials and intermediate goods are being considered.

• There needs to be a formal process for accepting and evaluating requests for tariff changes. This process should be timely and public, with all interested parties permitted access, particularly when tariff changes affect the ERPs of more than one activity.

• In parallel with the adoption of an ERP-based tariff setting procedure, a schedule for a programme of rate adjustments may need to be established, for a move to a uniform rate system. There are two approaches that have been used in this type of exercise. The first is ‘tops down and bottoms up’. Only high tariffs are reduced, while low rates remain at existing levels. The second amounts to a ‘concertina’ adjustment, by which the highest rates are reduced and the lowest rates simultaneously increased. This has the advantage of reducing the degree of cascading more rapidly. It also moves towards a uniform rate. Thus, there is no discretion for officials to reclassify imports from a higher tariff to a lower one, or vice versa. However, it also has a higher likelihood of greater variation in the resulting ERPs. Nonetheless, since achieving a uniform tariff rate will mean that some rates will have to be increased at some time, the issue boils down to a matter of timing.

5.5 To be internationally competitive, Fiji needs a sufficiently wide range of activities to earn the foreign exchange required to meet all the economy’s needs. The fundamental problem with a policy of protecting industries that, by definition, are not internationally competitive (because they need protection), is that these industries raise the cost structure of the economy. This imposes a severe cost disadvantage upon the tourism and export sectors, and it will slowly erode their profitability. The cost structure increases because protected industries can afford to bid more for the factors of production, especially labour. Over time, the protected industries push up wages and prices and absorb a greater proportion of national

41 resources, to the cost of the internationally competitive sector. Eventually this can create serious problems for the country’s balance of payments.

5.6 From an institutional economics perspective, the additional problem with a protectionist policy is that it puts a high premium on lobbying and rent seeking, as company representatives vie with each other either for greater protection, or to maintain their existing privileged positions. This is socially unproductive activity that raises transaction costs and takes the country further and further away from its real comparative advantage. The gradual introduction of a low and uniform tariff would release all these resources for more productive activities. The goal should be to encourage all industries to get as close as they can to internationally competitive standards. In this way they will help reduce the input costs of the enterprises that trade with them in a virtuous, and mutually reinforcing process. By contributing to a lowering of the economy’s cost structure, they will help an even wider range of Fiji industries become internationally competitive.

6.0 Assessment of the Role of Trade Support Institutions

6.1 As stated earlier, the country does not have a definitive strategy for export development, and no particular agency is responsible for the co-ordination of export-related activities. We are not gathering and pooling our combined resources to target national export competitiveness and high export performance.

6.2 Strategy formation in Fiji is carried out on a sector by sector basis. Minimal effort is given to exploiting synergies among the strategy support and service delivery networks, to capitalise on potential export opportunities. The approach has been piecemeal, with each agency responsible for a defined activity, based on a mandate provided under legislation. This has led to the inefficient allocation of limited resources among competing sectors, creating undue pressure on the allocation of resources through the national budget.

6.3 Much has been said about an over-reliance on preferential markets for our export commodities. However, there has never been a realistic assessment of the effectiveness of the support and service network agencies relative to export development.

6.4 Budgets for such initiatives are allocated (by sector), but the shortage of resources has inhibited the ability of those responsible to effectively conduct them. At least,

42 this is the usual response to suggestions of inefficiencies within the strategy support network. A maximising of synergies, coupled with the harnessing of all available cost-sharing mechanisms, could see the strategy support network contributing much more to the overall export effort.

6.5 It is important to note that while Fiji has made advances in its export policy since 1989, its export success has come largely from the high earnings of traditional commodities and preferential markets. Export figures in recent years have averaged a 3.4% growth, and show a worsening balance of payments situation.

6.6 Apart from the issue of a lack of resources, Fiji’s worsening export performance highlights our poor-coordination, a lack of effective consultative mechanisms, and the inability of our strategy support and service delivery players to act decisively on critical issues.

6.7 A detailed assessment of the Trade Support Network is given in Annex 4.

43 CHAPTER 5 CROSS CUTTING ISSUES

1.0 Introduction

1.1 Government over the last 20 years has introduced programmes in the agricultural, manufacturing, services, fisheries, forestry, and tourism sectors to develop Fiji’s capacity for export. But the sustainability of each sector has been constrained by issues that are cross-cutting in nature and which are beyond the capacity of each implementing entity to fully address. It is necessary, therefore, to deal with cross cutting issues at all levels in a more coordinated and integrated way.

1.2 The challenges Fiji faces include geographic isolation, climatic conditions, infrastructure, enabling policy and regulatory framework, land tenure system, access to land, low productivity of work force, market access, finance, market information, cost of raw materials and transportation cost to name a few. There are also supply side constraints in the ability to meet overseas requirements.

1.3 To design a realistic export strategy, consideration must be given to cross cutting measures to improve the international competitiveness of Fiji’s products. Equally important is the need to ensure that these measures are addressed in a holistic, timely and effective manner to support and facilitate the development of exports.

1.4 This chapter attempts to address the 21 major cross cutting issues critical to improving Fiji’s competitiveness in exports. Annex 5 outlines the action plan for each of the cross cutting issues.

2.0 Strategic Issues

2.1 Market Access Negotiations The current breakdown of the WTO Doha Round of Negotiations should force Fiji to enter into more bilateral and regional agreements. In line with this trend, Fiji should make concerted effort towards negotiating more bilateral/regional trade and economic cooperation arrangements with friendly countries.

44 3.0 High Cost and Limited Access to Finance

3.1 The current trading policy of commercial banks and the Fiji Development Bank is not conducive to supporting the growth of exports. This coupled with RBF’s tight monetary policy has contributed to higher interest rates. The high cost of financing is also a concern to exporters, particularly those who are not eligible for finance.

3.2 Because of the need to develop export commodities/industries, consideration should be given to subsidizing interest rates to borrowers. Consideration should also be given to developing an export-marketing grant, similar to grants offered in Australia to support product promotions.

3.3 The current limitations of the Export Finance Facility should be reviewed to make the facility more workable. The under-utilization of F$20 million facility does not serve its intended purpose as it currently excludes certain sectors.

3.4 Information on export finance is not readily available, inhibiting access to finance. These should be made more readily available on the Internet and in brochures.

3.5 Furthermore, banks should provide a business advisory role during the loan application process and loan term. The commercial banks should explore the possibility of outsourcing business advisory role to NCSMED or Exporters’ Club. This would assist bank clients that are struggling with loan repayments to get back on track.

4.0 Market information

4.1 Fiji has potential to identify and develop potential products. Market research enables exporters to understand the customer needs of the target market. There is a need to provide pertinent market information such as market size, market growth, labelling, and standards and quality requirements, to name a few. A “Buyers Directory” of local and overseas companies should be developed and made available to exporters. Regular workshops and seminars should be conducted to update exporters on market and logistical requirements and ensure the proper dissemination of market information to all stakeholders.

4.2 Except in the agriculture sector (Agtrade), there is no formal institutional arrangement for marketing products and services in Fiji or overseas markets. A

45 market intelligence unit should be established and properly equipped to undertake market intelligence work, provide the relevant information for exporters as well as facilitate and integrate Fiji exporters in the international supply chain.

5.0 Raw Materials Supply

5.1 A large component of Fiji’s manufactured products is imported raw materials. The high cost of raw materials contributes to higher production costs resulting in uncompetitive export product. Currently, most raw materials are sourced from major trading partners, particularly Australia and New Zealand. Exporters should be encouraged to source raw materials at competitive prices by seeking alternative sources such as China, and South East Asia. The other alternative is to source raw materials from local suppliers to build local capacity towards import substitution and strategies to achieve the needs in development.

6.0 Transportation Cost

6.1 High transportation is a major factor in the cost and pricing of export products. Fiji’s geographical location, coupled with the lack of volume, frequency and efficiency of our port and transport/logistical services, contribute to the high cost of transporting goods and services to and from Fiji.

6.2 High port and freight charges were identified as the most pressing issue currently faced by exporters. Port and freight charges should be reduced and/or subsidized to support exporters. An issue of concern relates to the need to increase the volume and capacity of freight services through more competition for domestic and international freight services. The continuation of port service charges imposed by shipping companies on exporters has contributed to increase in business costs. The additional charges were imposed by shipping companies to compensate for the inefficient port handling services at the ports. The port service charge must be removed as port efficiency has improved with the introduction of two new cranes at the port of Suva.

6.3 High transportation costs are also related to under- developed infrastructure linking the two main lands, Vanua Levu and Viti Levu. Moreover, most freight rates, depending on the type of carrier chosen, are not set on competitive pricing.

46 7.0 Bulk handling infrastructure/services

7.1 Logistics has been an important component of business strategy and can provide a basis for a competitive profit edge. Increased focus on logistics has the potential to improve a firm’s competitive position, especially for global manufacturing firms. Logistics become important by providing competitive advantage through competence in delivery speed, reliability, responsiveness, and low cost of distribution.

7.2 International trends show countries moving towards more cluster systems and development of modern and up-to-date facilities to attract international investors, and expedite manufacturing and export development to maximise synergies between businesses and industries.

7.3 In order to attract investment for export, more facilities such as “export zones’ for re-exports of products and “industrial zones” should be further developed. This would alleviate the unavailability of economically priced factory/warehouse/ commercial space for businesses in Fiji.

8.0 Incentives and taxation issues

8.1 To encourage and incentivise exporters to produce goods for exports Government to consider increasing the percentage of export income to be deducted for the years 2007 and 2008 to be increased from the current rate of 25 percent to 100 percent.

8.2 An industry concern is the inefficiency in the taxation system, especially incorporating VAT and refunds. Although the Fiji Integrated Tax System (FITS) was introduced in 2003, VAT processing has been slow. FIRCA has not approved applications over the last two years. It was suggested that FIRCA would need to streamline its VAT refund process to allow quicker turn around time for exporters. It has been suggested that a VAT refund should also be considered for tourists, as this make Fiji more attractive as a visitor destination.

8.3 To further promote the use of local products and suppliers, Government should impose a high duty rate on goods that can be sourced locally. Exporters are entitled to import duty free an amount equal to the proportion of approved imported inputs

47 required to produce exports under the Duty Suspension Scheme. The further suggestion to introduce duty free on raw materials should also be considered in view of the need to reduce cost of production and improve competitiveness of our exports.

9.0 Currency fluctuations

9.1 Currency fluctuation is an important consideration for exporters as it directly affects the competitiveness of our exports on the international market. The Fiji dollar is pegged to a weighted basket of currencies of major trading partners – Australia, New Zealand, USA, Japan and the Euro, which has enabled our currency to be more stable. The main objective is to maintain this stable exchange rate to lessen uncertainty in currency fluctuations and their impact on trading with our major trading partners, our trade balance, and economy. Maintaining a stable exchange rate is important for export development.

10.0 Fiji’s Image

10.1 Fiji’s history has seen a number of political disturbances over the past years. Though the political climate has improved to a great extent, the perception abroad still, is that Fiji is politically unstable. There is a need to correct this through improved and managed public relations activities both internally and externally.

11.0 Public sector reforms

11.1 Slow progress of public sector reform has also been seen as contributing to the current inefficiency of public enterprise and government agencies. Although a number of reforms have been undertaken, these have been haphazard and slow preventing the objectives of the reform agenda from being fully met. Since restructure and reform have a direct bearing on efficiency levels, the economy, and development of exports, there should be more concerted effort to speed up the reform process. All public sector reforms, including the civil service reform, should be targeted for completion by 2010.

12.0 Sustainability of Natural Resources

12.1 Fiji enjoys a wealth of its natural resources. This is one of the factors that has boosted the tourism industry in Fiji. Sustainable development and management

48 of resources are critical for ensuring sustainability of our export sector, given that Fiji is mainly an agro-based economy. It is important to note also, that lack of good management of natural resources encourages exploitation. The recently enacted Environment Management Bill will contribute significantly to protecting and conserving the natural environment in Fiji. Capacity building, however, is required to implement policies and monitor legislation. Proper training opportunities should be made available. Technical expertise and improved infrastructure will be required to enhance capacity to support the objective of sustainable utilization and productive use of resources.

13.0 Institution and Institutional assets

13.1 More effort and resources are needed for institutions charged with promoting trade and investment. Promotion and awareness-building of export and investment opportunities must be intensified. This will assist exporters gain market entry and attract more export-related investment into the country. The level of finance for marketing and promotion is grossly under budgeted. It is imperative that the budget is increased to allow for more aggressive and intensive promotional campaigns.

13.2 The decision-making machinery of autonomous agencies such as the FTIB, FAVC, AMA etc, needs to be respected for efficient and autonomous decision-making and implementation.

14.0 Recovery from Disasters

14.1 Recovery from disaster is of critical importance to exporters and investors given that Fiji is an agricultural based economy, and a disaster prone area. Improving the recovery time following disasters will require momentum to enable continued production without hindering supplies and export market commitments. This should be facilitated through implementation of a recovery plan focused on each disaster impact. Implementation of an appropriate legal framework to manage disasters is necessary.

15.0 Infrastructure

15.1 An issue of concern regarding supply is the unreliable provision of utilities, and poor public infrastructure. Infrastructure problems continue to aggravate the lack of efficiency in transportation of goods and services, and bottlenecks resulting in the higher cost of doing business.

49 16.0 Education and training

16.1 Low labour productivity is contributing to inefficiency in industries. This situation is worsened by the absence of a well-trained workforce, and the migration of skilled workers. More emphasis has to be given to improving the quality of industry-related training of more people, and implementing a productivity-based remuneration system.

16.2 The productivity of Fiji’s workforce must be improved to international best practice. The way forward is to legislate productivity, or the performance of employees. In addition, training providers should closely align their training to industry needs.

17.0 Land Tenure and qoliqoli

17.1 The ongoing ALTA versus NLTA debate is not conducive to resolving the perennial land issue. The effectiveness of the current ALTA laws in resolving the landlord and tenant relationship needs to be addressed in a manner that better serves the interest of landowners and tenants. Legislation that is beneficial to the needs of both landlord and tenant must be put in place as a matter of priority.

17.2 A National Task Force should be established to find solutions to longstanding matters on land, including landlord/tenant relations and management. There is a need also to conduct wider consultations on the proposed Qoliqoli Bill to ensure stakeholders interests are addressed.

18.0 Research and Development

18.1 To improve the effectiveness of research, direct links should be developed between researchers and users, particularly in public sector research arms. There is a need for a thorough and impartial investigation into why returns to agricultural research appear to be so low. In particular, this should consider the effectiveness of agricultural extension as it is practiced at present, given the apparent high cost and poor return to this activity. The University of the South Pacific should further develop its links with wider industry players so that it undertakes research that is relevant to the business community, and can be made available to the public.

18.2 In relation to capacity building, the key problem is the loss of key staff to migration. To alleviate this, and to build up a knowledge-based economy, Government should actively pursue a policy of encouraging skilled people to Fiji.

50 19.0 Fiji Branding

19.1 Good branding creates credibility and loyalty, and a positive impression of a country and its products. To improve Fiji’s image, there is a need to create a brand name for Fiji exports, capitalizing on the fame and goodwill generated by sports personalities overseas, and on the good image created by internationally renowned Fiji products.

20.0 Business Competitiveness

20.1 Fiji needs an enabling environment to attract more foreign investors with the ability to create higher levels of employment. A mechanism for this is to facilitate foreign investment by reviewing the restrictions and reservations placed on foreign investors under the Foreign Investment Act, and to improve ways of dealing with the concerns of foreign investors. There is a need to formulate better remuneration packages for workers in order to reward and retain skilled and professional workers.

21.0 Quality and Standards

21.1 Increase in trade will require improvements in capacity for monitoring quality and standards of goods and services. Fiji needs to develop international standards and quality standards and encourage enterprises to adopt best business practices.

22.0 Entrepreneurship

22.1 For Government to ensure that the private sector does indeed become the engine of growth, it needs to encourage entrepreneurship in Fiji. The role of an entrepreneur is to discover formerly unknown gains from exchange through the discovery of profit opportunities. This is the source of the productivity improvements that will drive sustainable growth. Entrepreneurs cannot prosper without a set of stable rules that facilitate their access to financial, skills and market resources, and which also protect entrepreneurial gains from expropriation.

22.2 Higher productivity requires the introduction of new technologies and managerial techniques. Government needs to drastically reduce its direct interventions in private sector activities and focus instead on (a) maintaining macroeconomic stability; (b) improving the management of its own operations; and (c) creating an institutional and policy environment that encourages and facilitates greater entrepreneurial activity.

51 CHAPTER 6 THE NATIONAL EXPORT STRATEGY – THE WAY FORWARD

1.0 Introduction

1.1 The strategic priorities for Government in the next five years aimed at achieving stability and higher rates of economic growth are summarized below.

Rebuilding confidence for Stability Rebuilding confidence for Growth • Enhancing security and law and order • Maintaining macro-economic stability • Promoting national reconciliation and unity • Raising investment levels for jobs and • Alleviating poverty growth • Strengthening good governance • Reforming the public sector to reduce • Reviewing the Constitution the cost of doing business • Resolving the agricultural land lease issue • Rural and outer island development • Implementing Affirmative Action • Structural reforms to promote competition and efficiency

1.2 The selection of priority areas for the export strategy was based on respective impact on economic growth, employment creation, balance development and, most importantly, on areas where the country has comparative advantage, and where the private sector can take the lead role.

1.3 Each of the goods/services identified has its own vision, a brief overview, strategic issues and action plan. The action plans will have clear objectives, strategies, key performance indicators, necessary resources required, and the agency responsible for implementation. Every effort has been made to ensure all strategic issues are adequately covered in the strategic plan.

2.0 Action Plans

2.1 The action plan for each goods and services will follow the format below.

52 Goods Services Resource Based Manufacturing Economic Services Human Resource Cane Sugar Tourism Health Forestry Garments Audio Visual Education/Training

Information Technology Marine Products Mineral Water Labour Mobility Communication

Agro Business Financial Services

2.2 In summary, there are 73 key priority objectives for the 13 areas identified. To complement the objectives there are 266 strategies which include 16 for development perspective, 127 for competitiveness perspective, 41 for client’s perspective, and 82 for Institutional perspective. The table below provides the details.

Table 4 - National Export Strategy - Strategy Analysis Matrix Development Competitive Client’s Institutional Total Sector Perspective Perspective Perspective Perspective Sugar - 20 - 4 24 Agro-Business 3 13 9 32 57 Marine Products 1 21 5 10 37 Forestry 2 11 8 15 36 Garments - 7 1 - 8 Mineral Water - 1 2 6 9 Tourism 3 12 6 2 23 ICT 3 10 1 4 18 Audio-Visual - 8 3 3 14 Financial Services 1 5 2 1 9 Health Services - 11 3 2 16 Education/ Training - 2 1 - 3 Labour Mobility 3 6 - 3 12 Total 16 127 41 82 266

Development Perspective: 16 Competitive Perspective: 127 Client’s Perspective: 41 Institutional Perspective: 82

Total no. of strategies: 266

53 2.3 The table is not conclusive, but illustrates how the strategies can be categorized. Categorization, however, does not imply that the strategies are independent of each other. There is a strong correlation among the stakeholder perspectives. However, it can confidently be said that the competitiveness, client’s and institutional perspectives are all functions of the development perspective. Although there are only sixteen strategies identified under the development perspective, this does not mean it will be given low priority. The firm linkages and the interrelationships between the perspectives must be recognized. The classification will, to some extent, allow the drawing up of the roadmap prioritizing the strategies and resource allocation to be discussed in Chapter 8. 2.4 To support implementation of these strategies, and provide the necessary resources, Government will also continue to create the necessary environment for the private sector to thrive through its policy initiatives. At the same time, it will continue with its core responsibility of managing the economy through the provision of social services, law and order, and of infrastructure, and put in place the necessary legislative framework for good governance.

SUGAR

Vision: Maximize foreign exchange earnings and provide sustainable livelihood through a competitive sugar industry

1.0 Overview

1.1 Fiji’s rural economy is dominated by sugar cane and subsistence farming, which accounts for 36% and 35% respectively of agricultural gross domestic output. However, 60% of the cash income of the agricultural sector stems from sugar cane production. 1.2 The sugar industry accounts for 7% of GDP, 22% of export earnings and 13% of the workforce. An estimated 20% of Fiji’s population is directly or indirectly dependent on the sugar industry.

54 1.3 As part of its Common Agricultural Policy reform, and in response to a 2005 WTO ruling on EU sugar exports, the EU agreed to reform its internal sugar market conditions, providing for price reductions over a 4-year period, starting by a 5% cut in 2006/07 and rising to the full 36% cut by 2009/10.

1.4 These price cuts, coupled with a prolonged period of underinvestment resulting in a serious decline in cane and sugar production and an escalation of costs, puts Fiji’s sugar industry in a state of great precariousness.

1.5 However, government, together with all stakeholders, is committed to a strategy, which takes up the challenge of restoring an economically viable sugar cane industry based on sustainable competitiveness.

1.6 The sugar industry includes four mills. Production levels stand at around three million tones of sugar cane annually (2,969,000 mts in 2005), about 300,000 mts of raw sugar and about 115,000 mts of molasses. Out of 24,788 registered farmers (leased area) on a total farmed area of 182,963 hectares, about 17,000 farmers are growing sugar cane on 64,894 hectares.

2.0 Strategic Issues

2.1 Employment The sugar industry has occupied a central position in the economy for almost 150 years. Over 40,000 families earn their livelihood directly or indirectly from the industry and more than 200,000 people depend on the sugar industry. To survive in the international market the industry has to make the necessary adjustment through reform.

2.2 Adverse Market Trends Change in the EU sugar regime is just one of the unfavourable trends in market conditions for sugar exports. It will reduce the price paid on the country’s 173,000 tonnes and protocol quota by 36% by 2009/10.

2.3 The long-term outlook for sugar on the world market remains uncertain, although the above-mentioned positive trend and the reduced supply to EU sugar on the world market could increase the world price.

55 2.4 High Production Cost Production costs are very high and not competitive when compared to other main sugar-producing countries. The world market prices will strongly be influenced by the production costs of the world’s leading sugar exporters in the future.

2.5 The high sugar production costs relate to a number of factors: low land productivity, low cane quality and high content of extraneous matters, inefficient field and factory operations, high harvesting costs, high transportation costs, weaknesses in administration and management structures, low capacity utilization in factories, and the loss of time due to mechanical breakdowns at the mills and congestion of the supply. Even, if there are variations in between the four sugar-belt regions and their respective mills and the low productivity and inefficiency is at different levels, in general the causes for high production costs are similar.

2.6 Other Challenges The industry suffers from a number of other structural and institutional weaknesses including run-down capital assets, a very poor road network resulting in uneconomic transportation of cane to the mills, inappropriate and even harmful harvesting methods, at factory level and constant brain drain. The absence of sugar cane growers’ support services, such as extension services, agricultural research and adequate credit facilities add to these weaknesses.

56 Organization Implementation FSC/SCGC/Govt. Govt./FSC/SCGC Research/SCGC/ FSC EU/Govt EU/Govt FSC/SCGC Necessary Resources EU funding Revitalized/IndependentR&D EU Funding EU/Govt. funding EU/Govt Funding EU funding. Expertise in new systems. ACTION PLAN AGRICULTURE (SUGAR) AGRICULTURE Key performance Indicator Improve cane husbandry practices Establish seed cane nurseries Establish model farms Compact industry with easier access easier with industry Compact Increase yield from 46tpha to 75 Increase new plant cane to replace Growers no longer having to pay Drought affected areas in cane belt irrigation drip allow to boreholes have managed be to roads access cane All New harvest and supply system in of supply cane to mills tpha ageing rations; 25/75% drainage levies of farms by Govt/EU funding. place for all mills by 2008

• • • • • • • • • • Strategy Increase efficiency of field production Increase efficiency Accelerated replanting and quality Strengthen research and extension Proper drainage and irrigation and equipment agricultural of Upgrading to Rationalization of sugar growing areas improvement services compliment replanting programme excess roads • • • • • • Objective 1: Cane farming as a viable & sustainable means of livelihood. (Cane production farmers)

57 Organization Organization Implementation Implementation FSC, Overseas expertise FSC FSC FSC, SCGC. FSC, SCGC FSC, SCGC, SCOF FSC, SCGC, SCOF EU. FSC, SCGC, GOVT, Indian Contractors C o n t r a c t o r s / m i l l None –immediate HR exercise and local engineers engineers Nil. Nil. Private contractors. contractors Weekly Weekly pay quota availability. and Finance & Necessary Resources Necessary Resources • • • • • • • • • Key performance Indicator Key performance Indicator Upgrade factory plants as per STM Raise efficiency targets to pre 1987 & plants uneconomical and old Replace Reduce manpower to efficient levels & proposals period equipment rationalize cane transport system day by 2008. Rationalize transport costs 2008. Gang size to 10,000t. by 2008. mills. Rail and road upgrade Increase cutter productivity to 3tonnes/ all in harvesting mechanical Encourage • • • • • • • • • Strategy Strategy harvesting and transport cost Reduce harvesting costs. Reduce transport costs. Contract out harvesting & transport Mechanical harvesting. Improve infrastructure Management of cane supply/ plan production Upgrading of factory equipment redundancy Implementation of the restructuring Increase efficiency of factory Reduction of overhead cost and

• • • • • • • • • • • Objective 3: An efficient and low cost producer of quality sugar. (Milling) An efficient and low cost producer of quality sugar. Objective 3: Objective 2: An efficient and cost effective harvesting transport operation. (Harvesting & Transport) Objective 2:

58 Organization Implementation EU/EIB/FSC Organization Implementation FSC FSM MFAET FSM FSM FSM Expertise for feasibility studies and production resources Necessary Resources Necessary Resources Lending Institutions Government contacts and political relations Marketing Intelligence and Expertise Capital from Funding/ • Key performance Indicator Key performance Indicator Higher returns from cane resources Better utilization of manpower and Invest in Mill production plant of upgrading Very High to Polarised (VHP) allow Secure bilateral arrangements through of Fiji sugar in Niche marketing; differentiation sugar as demanded by the market. Better return after EU price reduction Government channels. the market place. Increase market share. Lower freight costs. • • • • • • • • Strategy Strategy VHP Sugars VHP Expand Direct Consumption (DC) Raws sales in the Pacific Region including New Zealand and French and Territories Pacific Taiwan. Rim countries, like Fiji for EU the in markets alternative Explore Investigate other potential market outlets in Pacific Rim countries, eg. China, Korea, Continue to develop long-term relationship Continue to develop molasses sales in the arrangements term long of possibility Explore with vessel owners to ship Fiji sugar to Diversification with the industry – (co-generation, ethanol, energy renewable and biogas sugar in post 2009. Indonesia, etc. with buyers in the region eg. Japan NZ animal feed market. markets ethanol) • • • • • • • • Objective 4: Seek market opportunities to maximize earnings. (Marketing) Objective 5: Enhance profitability through diversification and value addition. (Diversification)

59 FORESTRY

Vision: A sustainable managed forestry sector to support the livelihood of all stakeholders, particularly resource owners.

1.0 Overview

1.1 The forestry sector represents three main sub-sectors. These include indigenous forests, pine plantations and hardwood plantations, mainly mahogany. The sector contributes around 2% to overall Gross Domestic Product with total export earnings in 2005 of about F$39.7million, excluding furniture.

1.2 Total export earnings have gradually declined since the high of $59.3 million recorded in 1998. The indigenous sub-sector earned F$6.3 million in 2003 to F$3.7 million in 2005. However, the decline has been offset to some extent by mahogany timber with export earnings rising from F$1.4 million in 2003 to F$9.6 million in 2005.

1.3 The sector is governed by the Forest Decree 1992 which regulates the management and utilization of the forest resources in a sustainable manner while facilitating growth of the sector with full participation of resource owners. The Department licenses all harvesting operations, sawmills and export licenses, which are required for timber export.

1.4 Government is committed to developing downstream industries for processing and value adding of its mahogany and other timber resource to ensure international competitiveness. 2.0 Strategic Issues

2.1 Fragmented Industry The forestry sector is not well coordinated. It does not appear to have a common national vision and a sense of national interest amongst all the sub-sectors. The Department of Forests seems to be a standalone agency. No industry association

60 exists to support the development of the industry and address stakeholder interests.

2.2 There is global demand for a competitive mahogany resource. Government provides extensive support to pine and mahogany industries and there are many small enterprises in processing of native timber resources. The integrated stand alone downstream industry planned for Fiji’s mahogany has the potential to improve coordination, as it will provide avenues for native and pine timber to be value added locally.

3.0 Technology

3.1 The industry lacks education and investment in appropriate technology to improve quality for better returns and efficiency for lower cost. Portable sawmills designed for domestic use are sometimes used for industrial production with high wastage.

3.2 Investment in research and development of mahogany’s physical characteristics and products is important and needs to be improved. This is a basic requirement to ensure mahogany retains its position as a high value product in the international market.

4.0 Human Resources

4.1 Overseas markets compete strongly for qualified and trained machinery operators and trades people needed to support the timber downstream operations from felling, haulage and mechanics. The high turnover of well-qualified staff is a major challenge for the industry. The industry needs more training and graduates who can operate new machinery. Upgrading of appropriate technology is necessary to improve trade skills, especially in harvesting and management of forestry resources.

5.0 Long term and Consistent Supply of Raw Materials

5.1 There is insufficient supply of native and mahogany logs for conversion into products for exports. The native resource faces challenges arising from widespread location of forests contributing significantly to expensive harvesting operations and marketing exercises. The harvesting of native resources is based on licences issued annually. There is no guarantee of supply of logs, which acts as disincentive to investors.

61 5.2 In comparison, mahogany plantations are concentrated within a specific location and harvesting is only undertaken by Fiji Hardwood Corporation Limited (FHCL) is committed to consistently supplying logs through two short-term contracts it signed with downstream processors.

6.0 Sustainable Forest Management

6.1 The native forestry industry accords little attention to the replanting and harvesting of trees. FHCL’s objective is to ensure sustainable supply through adequate replanting.

6.2 For native resources, a breakdown in the transfer of traditional forest-related knowledge poses a high risk of permanent loss of such knowledge and experiences to future generations. Indigenous forests are considered an inexhaustible resource that provides income for locals in the short term. There is little revenue gained from commercial logging operations to support longer-term investment. In addition, there is limited use of current revenues to promote secondary forests as returns are used to fund more pressing recurrent and short-term expenditure of landowning units. Population growth and economic pressures have also contributed to the degradation of forest, tree and plant resources as developers often use large areas of forests to achieve economies of scale.

6.3 A new development within the forestry sector is the entry of private corporate investment to bear the financial burden of developing forestry resources. Through these initiatives, the Government envisages gaining large tax revenues when these new privately owned assets mature.

7.0 Value addition

7.1 For mahogany, several businesses are currently undertaking downstream processing operations. The others have closed due to insufficient supply of sawn timber. To export into the US and other mainly European markets, stringent forest certification requirements are necessary. There is no forest certification issued in Fiji. Productivity at the factory outlets is low, and freight costs to our major trading partners such as Australia, New Zealand and new markets are high.

7.2 FHCL has purchased a stand alone integrated downstream processing plant through joint venture arrangement. The partnership will contribute much needed technology, expertise, markets and capital to the mahogany industry. The value

62 added mahogany resource is expected to fetch high price in the international market.

8.0 Education and Awareness

8.1 Landowner disruptions prevent access and harvest of forestry resources. These disturbances are commonly caused by an unrealistic perceived expectation of landowners’ participation and returns from the sector. There is a need to conduct awareness campaigns to educate landowners on the importance of the forestry sector for overall economic development.

63 Organization Implementation MFF MCI Industry Players Landowners MFAET NLTB Use existing resources through re-orientation of current machinery Necessary Resources • FORESTRY ACTION PLAN Key performance Indicator Sector Coordination Unit established Marketing is better coordinated Active Industry Associations Active Industry Association Timber Constitution of • • • • Strategy and Furniture Maker’s Guide framework associations/ Boards Appropriate policy and legislative Revival of Fiji Saw Millers’ Association Review effectiveness of Association Timber Set up a current holders Appoint Office Formulate a Constitution for members • • • • • • Objective 1: To develop a coordinated forestry sector with common national vision Objective 1: To

64 Organization Organization Implementation Implementation MFF PSC Donor agencies Private Sector FHCL, Banks (in process). MPEPSR, Scholarships institute Funding ($10 m) Skills Experience Agreement with a technical Technology training Vocational Necessary Resources Necessary Resources • • • • • • • Government Guarantee Full funding from the $5.8 million $5.8 the from funding Full •

Key performance Indicator Extend “Montfort Boys Town” model Town” Extend “Montfort Boys Job description Primary school curriculum Training Needs Assessment Needs Training equipped human resources Well Key performance Indicator Sufficient log contractors and roads and contractors log Sufficient in place. 3-4 months after receipt Sufficient plantation gangs, seed and nursery resources. 1 after receipt year of funds. Timing not of required funds as critical. • • • • • • • Viti Viti Levu mahogany ³ Strategy Strategy log supply: demand Build required logging roads. equipment. private industry leases over land. For 90,000 m Increase logging contractors to meet Help landowners acquire logging Supply surplus logs competitively to Expand planting gangs and secure Train Train forestry officers on an on-going specialization for opportunities Provide of forestry officers Improve skills based training Secure aid donors basis Encourage foreign investment • • • • • • • • • • To invest in human resources for the sector Objective 2: To ensure a long term supply of raw materials Objective 3: To

65 Organization Implementation None if the required and resources strategies are applied MFF MFF MFF Technical Expertise (if need arises) Necessary Resources Obtain and implement the tax rulings on Forestry investment Australia year 2000 in A pro-active Forestry Department from United Nations Legal draftsperson assistance Training Implementation of processes Policy officer Obtain necessary expertise & • • • • • • • Increase of forest cover in Fiji Increase in export volumes Government Increase in tax revenues to the Establish financial inflows into Fiji inventory Forest cover Increase in national forest saw milling licensing policy A Key performance Indicator Appropriate legislative • • • • • • • • framework Increase in export volumes Strategy : Register with United Nations stable Create new Fiji Forestry Bank Attract foreign investment in the Ensure land leasing mechanism is Formulate and implement a saw Undertake a national forest inventory milling licensing policy of all native forests For setting up of a Carbon Credit For active promotion of foreign investment in the sector: • planting value tropical timbers • of high end System • • For improving log recovery: • planning purposes: • For operational the and national for information collection of resource To ensure Sustainable Forest Management Practices are undertaken Objective 4: To 66 Organization Implementation MFF FHCL Industry private sector CDE, Comm. Secretariat, consultants standing by to contribute. new Board to FHCL progress involvement FHCL of new staff. to start as soon priority finance ready. Imminent. DFTCA MFF, Division), Industry players FHCL, FPL, Donor MFF, FPT, assistance Necessary Resources Low interest rate to develop Access to funds ($30 million) industry Supportive Government Low utility costs (FEA) Duty on export timber Limited funding from $5.8 million Government Guarantee & expert support. staff expertise Technical Technical expertise (if needed), Department of Forestry Officials, 000 ($300, funding person, Drafts native for million $2 mahogany, for timbers, $600, 000 for pine) • • • • • • • • Key performance Indicator Government approval for industry Implementing export clusters Primary raw materials To To 1 & 2) Establish TOR, consultants. funding, In process - 1 month to To 3) To start immediately completed. 1 3-6 months & for selection 2 start 2 months to complete. and start several industries. Set of Fiji Standards Forest Management Legislation framework for Sustainable • • • • • • • : Strategy : Seek Government assistance for Develop exportable products Secure timber resource Set pricing structure concessions Develop Human Resource Training Develop Human Resource Develop new standards Research target market to define Define/implement process to involve Assist joint venture partners to products Define optimum industry portfolio best joint venture partners establish the industry Utilize the current standards Development of FSC standards for Fiji

• • • • For Forest Stewardship Council (FSC) For mahogany: • For downstream industry portfolio • • • • Standard • • certification: • For development of Fiji Mahogany Objective 5: To develop Value Adding Industry develop Value Objective 5: To

67 Organization Implementation MFF, MFF, FPCL, TWIL, FFI and FPCL FTIB, MFF. Necessary Resources Key performance Indicator 2007 2008 boards by sourcing it locally Chip mill to commence operation in Sawmill to commence operation in Reduce import of sawn timber & • • • Strategy products plant in Wairiki Construction of integrated processing Maximum utilization of Fiji timber • • Objective 6: To increase export earnings from the pine industry by $26 - $30 million Objective 6: To 2007

68 MARINE PRODUCTS

Vision A leading exporter of premium, quality fishery products in the South Pacific 1.0 Overview

1.1 The sector is the third-largest natural resource based behind sugar and other non- sugar crops. It contributes F$82m in terms of GDP to the country. Approximately 9100 people are employed here. Currently the sector is dominated by tuna followed by beche-de-mer exporters. Other exports include aquarium, reef-fish, seaweed, and black pearl.

1.2 The industry profile ranges from fish harvesting to fish processing and has the productive capacity to raise its export earnings, given the necessary support by the relevant line agencies.

1.3 Over the years, the sector has experienced a downfall in export earnings and this is attributed to several factors. Changes in successive Governments within a span of eight years had a major causal effect on export policy orientation. Consequently, the port facilities/services became less attractive and this is evident in the low number of fishing vessels berthing at our ports to off-load fish.

1.4 Given the current operating environment, it is imperative that we attract foreign fishing vessels to our ports. Therefore, structural changes to achieve the vision for F$1billion (gross receipts) industry in the next 10 years is necessary. According to key players, the industry has the potential to triple its current export earnings.

1.5 The overall aim of the sector is to improve its operating environment through improving the institutional capacity of responsible agencies.

2.0 Strategic Issues

2.1 The Environment The need to provide the necessary enabling environment to allow the private sector to take a lead role is necessary while the public sector provides an enabling environment. Duty imposed on fishing vessels and other levies has indirectly caused diminished levels of foreign fishing vessels berthing at our ports for

69 off-loading purposes. As a consequence, foreign fishing vessels prefer to visit Pagopago (American Samoa), Vanuatu, and Samoan ports. Although Fiji has the productive capacity for fish processing, it is important that the enabling environment be created to attract the return of foreign vessels. This, in turn, will address the problem of raw-material supply that fish processing plants are currently facing.

2.2 Fisheries Resource Management There is a great need to improve resource management as it has a major impact on the sustainability of the industry. The Department of Fisheries will have to be adequately resourced to focus on specific areas of the management of the fisheries resource. This would include effective implementation of the new proposed Fisheries Management Bill, Tuna Management Plan, the establishment of the Fisheries Board and the Qoliqoli Bill. Over exploitation of resources within our in-shore or qoliqoli waters cannot be over-emphasized. Focus on applied research to support resource management and ensure resource sustainability must be encouraged.

2.3 Involvement of Industry Players in Trade Negotiations Given the current complexities in the global trading regime, industry players feel the private sector needs to be represented in bi/multilateral negotiation organized by the Ministry of Foreign Affairs & External Trade. At times, crucial/technical issues are discussed at such meetings and public officials present are not in a position to comment since they may have insufficient background knowledge of the intricacies of trading in the sector.

2.4 Capacity Building/Training The industry needs capacity building in all facets of the value-chain. These include proper mariculture husbandry practices and fish harvesting, right through to fish processing. The Fiji Islands Maritime & Safety Administration (FIMSA) has been tasked to liaise with the FIT (School of Maritime) on the appropriate training needs of the Industry and to see how best it can be co-opted into the curriculum.

2.5 Effective Computation of Marine Products Export Data There is general consensus that the export figures are under-reported. This undervalues the true export earnings of the industry. Figures quoted as of last year amounted to F$82m in terms of foreign exchange earnings, however Industry players have agreed that this value should be staggered around F$200m. There is a need to effectively co-ordinate methods of capturing such export data among line agencies as this is crucial for planning and decision-making.

70 2.6 Encouraging Fishing outside Fiji’s EEZ Heavy fishing pressure exerted on our inshore, archipelagic and EEZ resources have caused exploitation beyond sustainable levels. Fiji must establish local fleet capacity to fish beyond our EEZ in order to reduce the pressure exerted on our over-exploited fishery resources within our waters. It has been noted that about 80% of fish processed locally for export are caught outside Fiji’s EEZ. This has necessitated the idea for better facilitation of access into regional waters and FIMSA to work towards increasing the range of class 4 fishing masters by 200 miles to enable fishing of nearby high seas. In the long-term, developing local fleet capacity is a necessity to provide a consistent and sustainable supply of raw materials to the local fish processing plants. To effect this, consideration should be given to supporting local entrepreneurs to purchase fishing vessels.

2.7 Mariculture There is a great need to support private-sector initiatives in developing Maricultural activities such as pearl farming, seaweed farming, tuna farming, sea cucumber, crab farming and shrimp farming which are potential export commodities from the public sector. Maricultural activities should be encouraged to sustain stocks of our fishery resources.

2.8 Infrastructure The need to improve port infrastructure and services is necessary to cushion overcrowding at the ports of entry. To attract foreign fishing vessels to Fiji, the provision of service infrastructure to meet their needs is essential. The economic spin-offs from foreign fishing boats are far too great to allow them to go elsewhere.

2.9 Standards Goods exported need to be accredited to international market requirements to allow easy market access. In the long-term, the industry has to develop its capacity to fulfil market access requirements. HACCP (Hazard Analysis Critical Control Point) accredited companies will be encouraged to facilitate exports and this augurs well for the sustainability and the viability of the Industry.

71 Organization Implementation MoFF, MoFF, USP, (School of FIT Maritime Studies), MFAET MFNP, FIMSA, Necessary Resources multilateral organizations. of the sector sector growth concerned. Provide funding establishment, for work staff allocation re-prioritize & MFAET to from assistance technical seek Re-orientation of the taxation (HR) regime by FIRCA from assistance technical Seek SPC regarding training needs appropriate for funding Provide courses to support private Re-orientation initiatives of by line policy Agencies • • • • • ACTION PLAN quarter 2007 rd MARINE PRODUCTS Key performance Indicator Ownership of Fisheries Management Guaranteed access to Regional waters Implementation of Tuna Management Maintenance of Cabinet approved Removal of duty on fuel & fishing gear Setting up of appropriate fisheries Finalization of fishing licence tenure – Qtr 2 2007 basis & finalized by Qtr 4 2007 on related issues to stakeholders 2006 Maritime) by 3 system for 10 years Awareness programme by stakeholders by programme Awareness (EEZs of other PICs) on an-ongoing plan & Authority establishment Fisheries of National dissemination transparent & cap licence for local & foreign operators by Qtr 4 related courses with FIT (School of • • • • • • • Strategy Management the EEZs of neighbouring countries Plans Licensing issuance (air-freight), fuel, license fees marketing requirements. Improve Fisheries Government to facilitate Resource access to Improve Resource Management Effective monitoring of Fishing business doing of Cost the Reducing (Improve Catch, access, fees, duties Capacity-building – to from fishing processing & or years 10 for tenure licence Fishing management, enough to satisfy lending institutions • • • • • • • Objective 1: To make fishing economically viable & sustainable Objective 1: To

72 Organization Implementation MCI, MLIR, MH FIMSA, FPCL, FQIS, MHAI MA FIRCA, MFF, FTIB, initiatives of line agencies areas identified accreditation scheme continuous advisory role. Re-orientation of policy Solicit support multilateral from donor partners bi/ for capacity building in the Budgetary Provision include targeted investment to initiatives & fish processing Legal delegation of powers from Food Safety Act 2003 to Fisheries to Department ensure effective and Necessary Resources • • • • Key performance Indicator Association by Qtr 2 2007 checks by Qtr 2 2007 Fiji by Qtr 3 2007 practices among the players partners national marketing for a 2007 Qtr 2 2007 Deregulation of By-Catch off-loading off-loading By-Catch of Deregulation Finalise co-ordinated clearance Increasing the number of foreign fishing vessels offloading catch in Uniformity in standards & code of On-going effective solicit lobbying TA in areas of to competency development, assessment from bi/multilateral Industry players conformity to participate other and missions investment FTIB in Establishment of a Fish Processing Accreditation scheme by Qtr 3 Urgent attention convenience on for by Fiji in catches off-loading foreign vessels Flag fishing of • • • • • • • • (De-regulation of By- Strategy for processing requirements Promote downstream & value-adding Accreditation process – Inspectors (Rules of Origin (RoO) –fish products Provide the environment to attract necessary foreign fishing vessels to enabling Fiji- Catch off-loading, fees, duty, VAT bureaucracy) official & Increase volume of fish unloaded in Fiji Standardize practices to & domestic & facilities international market Government by Promotion International • • • • • • • Objective 2: To make fish processing economically viable & sustainable Objective 2: To

73 Organization Implementation RBF MCI. MFNP, MFF, provided continuous advisory role. Re-orientation of initiatives policy & budgetary Legal delegation of powers from Food Safety Act 2003 to Fisheries to Department ensure effective and Necessary Resources • • Key performance Indicator projection purposes –Qtr 2 2007 into) infrastructure and operating systems companies to facilitate exports. Co-ordination for effective of analysis export data computation, timely & effective dissemination for economic Growth in the sector employment & export figures by Qtr 3 2007 (increase in exports to current markets and new high-value niche markets also tapped Growth in sector investment to improve by current status private of Increase in HACCP (Hazard Analysis Critical Control Point)-accredited 25 chartered licence space owned by local companies by 2011 • • • • • Strategy Assess current (discrepancy in the computation export of levels Identify areas for (down-streaming processing & value- export growth Advise and continuously assist meet industry domestic and to Schemes Assurance Quality Promote Localization of chartered fishing export data) adding) international agency requirements vessels • • • • • Objective 3: To increase export earning capacity Objective 3: To

74 Organization Organization Implementation FIMSA, FIT, MFF, MFF, FIT, FIMSA, MLIR, MCI, MFAET, FTIB, TPAF, USP RBF, Implementation FIRCA MFF, MFF, MH, FQIS, Agencies Re-orientation policy initiatives by line of initiatives Industry Re-orientation of policy Budgetary Provision to suit training needs of the

Necessary Resources Necessary Resources • • • Key performance Indicator Address 2007 (Nov 2006) Rokobili Port development checks by Qtr 2 2007 2007 Incentives finalized by Budget the regarding FPCL from Feedback Finalise co-ordinated clearance Awareness of issues Border by FPCL, FIMSA Security – Qtr 2 Key performance Indicator fisheries export by Qtr 3 2007 2007 2007 by Qtr 3 2007 Increase in export earnings of Finalisation of training programme for fisheries related issues by Qtr 3 Increase in fishing activities of Fiji vessels outside Fiji’s EEZ by Qtr 3 All class 4 fishing Unlimited masters into miles 200 to endorsed to be by Qtr 3 2007 Waters opportunities employment in Increase • • • • • • • • • Strategy Strategy product-type) Fishing) Appropriate training & accreditation seas Identification of new export commodities Increase Processing capacities (volume, Labour export (foreign vessels based in Fiji- In-shore & Off-Shore) (Regional EEZ Fiji’s outside fishing Encourage Increase the range of class 4 fishing Masters by 200 miles to enable fishing of nearby high Appropriate incentives & removals/reduction of relevant charges/other (port levies duty existing Cut down red-tape foreign on vessels clearance through ordinated an of programme effectively by the FIRCA, co- MH, FILMS, MFF, FOCAL, Quarantine & Immigration ISPS Code Border-Security (Security of crew, fees) Port capacity (Docking facilities, overcrowding Departments • • • • • • • • • • Objective 5: To Increase Employment Opportunities Objective 5: To Objective 4: To be a competitive sector in the Region Objective 4: To

75 Organization Organization Implementation Implementation MHAI TPAF, TPAF, USP, FIMSA, FPCL, FIT, MH, MFF, MA, FQIS, MFNP, MFNP, RBF, FIRCA, MFF, MCI, MFAET, FTIB, specific training needs agencies Re-orientation of policy agencies line by initiatives Budgetary provision for Reorientation of policy initiatives by line Necessary Resources Necessary Resources • • • Key performance Indicator Key performance Indicator employment figures by Qtr 3 2007 Incentives finalised by 2007 Increase in export earnings and sector and earnings export in Increase training programmes by Qtr 1 2007 fisheries related issues by Qtr 3 2007 institutions by Qtr 2 2007 Private sector input into the design of Finalisation of training programme for Establishment of among working relations stakeholders and financial • • • • • Strategy Strategy processing workers industry commodities incentives on fishing & processing Enabling environment to invest Appropriate training for resource Managers, fishing vessel crew & of awareness increasing Upskilling, fishing the on institution lending the Identification of new Government to provide export available • • • • • Objective 7: To broaden/diversify the current export-base of Marine Products sector Objective 7: To Objective 6: To Enhance & Increase Capacity –both Private Public Sector Objective 6: To

76 AGRO BUSINESS (Papaya, Kava, Ginger, Dalo & Cassava)

Vision:

Revitalize the Agro-sector to become the leading, sustainable foreign exchange earner.

1.0 Overview

1.1 Non-sugar crops and livestock contribute 8% to GDP, around 11% of agricultural exports, and benefits approximately 50% of the population. The crop sector consists of traditional food crops (dalo, cassava, ginger and yaqona), tropical fruits (pineapple, pawpaw and mango), vegetables, spices, cocoa and coconut products. Beef, dairy, pork, poultry, sheep, goat and honey make up the livestock sub-sector.

1.2 Import substitution policies adopted since the seventies generally did not meet the expected outcomes. Recognizing that survival of industries in a competitive environment depended on being efficient, the sector has been gradually deregulated since 1989. Deregulation has resulted in the removal of import licences, the conversion of most import quotas to tariffs and subsequent reduction of these tariffs, and corporatization of public entities, such as NATCO and Rewa Rice Limited.

1.3 Performance of the sector over the last decade has been mixed. While production and exports of some commodities such as dalo and vegetables have gradually increased, others have stagnated or declined. Copra and cocoa have had a poor decade of declining production and exports.

1.4 Future potential is with products where Fiji has a competitive advantage such as high value niche exports and traditional food crop production. Products that give the best return to labour and land resources include traditional food crops, fresh fruits, processed fruits, processed nuts, cut flowers, vegetables, spices, herbs & medicinal plants, handicraft raw materials and certified organic products.

77 1.5 The value of export is dominated by root crops (taro, cassava, ginger and kava), the total export value of which reached F$29 million in 2004 (Refer table below). Tropical fruits such as papaya are showing considerable potential.

1.6 In 2005, Natures Way Cooperative (Fiji) Ltd operates commercial quarantine treatment facility for export of tropical fruits. Over the next 5 years, annual treatment is projected to increase from 794 to 1,500 tonnes with a fob value of around F$5 million (NWC 2005)

Table 5 - Export of Fiji’s major horticultural export commodities: 1997-2004

Dalo Cassava Total Kava Papaya Ginger

Tons $,000 Tons $,000 $,000 Tons $,000 Tons $,000 1997 6040 9024 4750 364 3400 109 334 2000 8395 13885 677 1095 6406 411 5973 98 430 2003 9661 16068 1622 2100 6797 144 1597 208 1246 2004 9945 19134 1220 1919 600 142 2231 302 1112

Source: FIBOS

1.7 The continued growth in niche horticultural exports has confirmed the competitive advantage of this area of Fiji’s agriculture, although this has not been anywhere near sufficient to offset the (accelerating) demise of the sugar industry. The value of sugar exports in 2004 was F$178 million. This compares with F$19 million for taro, the next biggest agricultural export earner.

1.8 Private Sector led development will be actively supported with Government and other agencies playing a facilitative role. In this regard, issues needed to be addressed include: safeguarding and commercially exploiting favourable quarantine status, improving export market access, encouraging the continuing transformation of subsistence to commercial farming, revitalization of agricultural research and access to technology, improving supply and effectiveness of credit, public investment in critical infrastructure and support for industry organization.

1.9 There is scope for enhancing food security by increasing production of non-sugar crops and commodities. A food and income security programme intended to improve agricultural crop production is planned for implementation in 2008.

1.10 Land and other associated resources must be utilized sustainably in the production or processing stages so that resources of good quality are available to future

78 generations. A rural land use policy guiding land utilization in rural areas will be implemented.

2.0 Strategic Issues

2.1 There are a number of issues relating to the development of this sub sector to allow it to become more competitive, and to take advantage of the comparative advantage that exists. These issues are summarized below:

2.2 Human Resource Development (HRD) HRD is an important component for agricultural development. It is vital that all farmers and community at large are exposed to farming system and appropriate technologies being applied. Apart from normal on-farm training for farmers, emphasis should also be given to the young generation of today to be a competent farmer of tomorrow.

2.3 The Fiji College of Agriculture is the only Government institution providing formal agricultural education to young farmers. A program under ALP (Alternative Livelihood Programme) addresses the problem and ensures strengthening of HRD. Another formal agricultural school (Navuso Agricultural School) previously operated by the Methodist Church of Fiji, has closed. The main objective of the Church was to train young farmers to take farming as a business. The closure of the school will have an adverse effect on agriculture development in Fiji.

3.0 Agro-processing

3.1 In recent years, there has been a significant development of agro-processing industries and considerable opportunities exist for further expansion and diversification in this area to produce value-added products. This will generate employment opportunities in rural areas.

3.2 Some of the major agro-industries include sugar, industrial alcohol and spirits (from molasses), processing of ginger, fruits & rice, coconut (copra and oil), coconut cream and soap manufacture.

3.3 The processing of livestock products remains rudimentary except for milk processing (butter and powdered milk), meat canning and processed sausages.

3.4 There is huge potential for agro-processing of taro, banana and breadfruit into chips. Agro-processing by the private sector is limited except for Punjas and Motibhai going into commercial production.

79 3.5 Establishment of the Agricultural Marketing Authority (AMA) through Government assistance with rural market centres at various localities is anticipated to facilitate marketing of agricultural produce for local and overseas markets. 4.0 Post-harvesting Technology

4.1 Since a large proportion of agricultural produce such as root crops, fruits, vegetables and fish are locally marketed fresh, development of proper post-harvest processing and storage technologies are extremely important. Farmers, extension staff, middlemen and retailers in the local market generally lack information on post-harvesting handling of fresh produce, proper packaging, transportation and storage before sale. There is a need to promote among traders, simple and low- cost technologies, preferably using local resources, for handling and packing fresh produce to reduce damage during transportation and storage.

4.2 For produce for export, post-harvest handling is generally better organized as exporters usually pack the material themselves, or provide packing material and supervise packing. Farmers generally do not use such materials for packing for sale in local markets, as they are relatively expensive. The major problem for export of fresh produce appears to be in meeting quality and quarantine standards. To obtain export quality produce, farmers need to follow proper production and plant protection procedures, in addition to proper handling procedures. 5.0 Tourism and Agriculture 5.1 There is a positive link between tourism and agriculture. Hotels, resorts and restaurants are a ready market for fruits, vegetables and root crops that can provide much needed income to rural communities. Farmers on the Coral Coast, for instance, and the Sigatoka Valley derive considerable income from fresh food supplies to the tourism market. Available figures indicate that about 20-25% of farm production is for hotels and resorts. 5.2 The effect of tourism on traditional food production is variable. Labour for fruit and vegetable production for the tourist trade definitely competes with labour required for production of traditional foods such as root crops. Labour requirements for tourism also compete with farm labour which is much less well paid. In certain areas of the Coral Coast, agriculture is being ignored in favour of wage employment in hotels.

5.3 Existing opportunities for increased agricultural production for the tourist sector are constrained by other factors such as inadequate infrastructure, lack of off- season production of fruits and vegetables. In addition, the lack of credit facilities for small farmers, post-harvest problems and low quality is also a major hindrance. This has contributed to high level of imports which drains foreign exchange.

80 6.0 Land

6.1 Ongoing tripartite discussions on the future nature of leasehold agreements are currently being held between the NLTB (representing the land owners), the tenants, and Government (represented by the ALTA unit in MA). A large portion of existing leases administered under the Agricultural Landlord and Tenant Act (ALTA) is due to expire. However, it is essential that a mutually satisfactory agreement be reached for both landowner and tenant. The productivity of land and the future viability of this key sector depend on this. Government has a leadership role in assuring this happens.

7.0 Quarantine

7.1 The demand on Fiji Quarantine Inspection Service (FQIS) has greatly increased with emphasis now on high value export development. Fiji is now a signatory to the WTO, which places the onus on scientific justification for phytosanitary measures. Yet the service is having difficulty in satisfactorily meeting current requirements, as shown by on going problems of eggplant shipments to New Zealand, and chillie and mango exports to Australia. Increasing numbers of Bilateral Quarantine Agreements (BQAs) will need to be negotiated and enforced. Regulatory supervision of the operations of the HTFA facility is required, and quarantine rules and regulations that minimize risk, facilitate trade and allow farmers access to improved seeds, must be formulated, and implemented. Public awareness must also be done on the need for quarantine.

7.2 To successfully meet these demands, the FQIS will be strengthened under the Ministry of Public Enterprise & Public Sector Reform through corporatization programmes.

8.0 Focusing of research and access to technology

8.1 Access to effective applied research and technology is critical for the sustained development of the sector. Key research and technology areas identified are: disease control & management, quarantine research, food technology, agricultural engineering, organic production systems and capacity to undertake environmental impact studies for the sector.

8.2 The focus in the medium term is on crop improvement through pest and disease surveys to meet export requirements, provision of certified seed and planting materials to meet BQA requirements and improvement to the upgrading the Agricultural Research Station.

81 9.0 Extension: a need for rationalization and a focus on industry needs.

9.1 Government’s advisory support through transfer of improved technologies to farmers, package of practices, post-harvest technologies, marketing and farmer training are the major components provided under the programme.

9.2 With the expiry of ALTA leases in sugarcane and non-sugarcane areas, the ADB/ FIJI funded Alternative Livelihood Programme (ALP) will address production of non-sugar crops as a source of revenue and food security.

9.3 The review of Agricultural Sector Study in 1996 has facilitated the implementation of projects on marketing agricultural produce into niche markets in Australia, NZ, Japan, USA, Canada and other small island nations in the region.

10.0 Credit Constraints on Agricultural Development

10.1 The Fiji financial system comprises six commercial banks, the Fiji Development Bank (FDB), and other non-bank institutions. Outstanding loans and advances to agriculture were about F$200 million in March 1995 (less than 20% of total to all sectors), of which about 1/3 had been provided by the FDB. Over the last decade, the volume of lending to agriculture has increased by 20%, but agriculture now receives proportionally less of total lending than in 1986. Despite the agriculture’s contribution to GDP, foreign exchange earnings and income distribution, it has received relatively modest amounts of credit.

11.0 Air Freight Rates

11.1 Japan potentially offers the most remunerative market for Fiji horticulture (particularly papaya and mango) and floriculture (anthuriums) products. There are currently eight direct flights to Japan a week, which can be expected to increase with growth in tourism. However, shortage of space and excessive freight rates currently limit this opportunity. Air Pacific, with a monopoly position and faced with heavy demand for space from sashimi tuna, has adopted a policy of attracting maximum freight rates. This policy, particularly for a national airline, may not be in the best interest of Fiji or the airline. It would be in the national, and in Air Pacific’s long-term interest, to diversify its exports to the lucrative Japanese market by setting reasonable (not subsidized) freight rates.

82 11.2 The critical role a national airline can play in assisting horticultural export development, is shown by Thailand’s Thai Air and Holland’s KLM. In the past, the Government of Thailand has utilized the ATA regulation allowing for Government Ordered Rates (GOR) to stimulate its horticultural export horticultural export development. The Fiji Government needs to give serious consideration to making similar interventions with respect to Fiji’s national airline.

83

Organization Implementation MPE MA MF Private Sector Necessary Resources Private sector govt funding. ACTION PLAN Key performance Indicator AGRO-BUSINESS Corporatize Quarantine with new strategic and commercial outlook by Qtr [1]2 2007. Improve fruit-fly monitoring in the west Fruit-fly eradication program for Rotuma • • • (Papaya, Kava, Ginger, Dalo & Cassava) (Papaya, Kava, Ginger, Strategy Reducing the incidence of smuggling plant and animal material through increased Expeditious follow up on quarantine market Gaining maximum commercial advantage facility and HTFA from SPRFFP surveillance and education program access agreements. Strengthening of MA Quarantine Dept Strengthening of MA Regular monitoring of fruit fly traps • • • • • Objective 1: Improving export Market Access Objective 1: Improving export Market

84 Organization Implementation MFNP MFAET Industry Council FTIB MA FIRCA Necessary Resources year to rejuvenate the nd Agriculture sector. govt relevant within HR Rationalize govt ministries to fund Trade Reps. Increase Import Duty on all imported food items by 10% to fund export initiatives in Based Agriculture Sector. the on the 2005 statistics food this will import equate to $36 mil p.a. This arrangement is funding to continue for 10 years review 2 every Source funding from central Key performance Indicator 2007. accounting firm. trade by Qtr 4 2006. commitment. issues. MFAET MFAET to update on stakeholders status of trade development Set-up Ag-trade reps in Brussels, Tokyo, Brisbane and Auckland Beijing, Washington, Shanghai, with commercial background and expertise on contract basis in Qtr 1 Establish export fund to promote export through import duty on all food imports by 2007 commencing trust in held be to Funds 2007. 1 Qtr and administered by a reputable to sector Private and Bank Reserve Payment “Export up setting explore Insurance Cover Scheme” Agro for accession WTO update and Review • • • • • Strategy importing countries commercial experience in overseas missions Development of export insurance cover govt to trade negotiations. Proactive approach by Government and private and Government by approach Proactive sector in negotiating trade agreements with markets. key certain to rates freight Subsidized Specialized trade representative with Private sector technical support to participate in internal actively as well as international Agenda Development the improve and Maintain negotiations status. in Doha Round and EPA • • • • • • Objective 2: Safeguarding and commercially exploiting Fiji’s favorable quarantine status Objective 2: Safeguarding and commercially exploiting Fiji’s

85 Organization Organization Implementation Implementation MFNP FTIB MA MFAET MH Industry Councils AMA MFNP MA MEYS ME MJ Industry Councils Necessary Resources Necessary Resources Source govt and aid donor funding to strategy. implement Expedite ALP program of assistance for Commodity/ Industry Councils. Access to and EXIM international Bank funds donor arrangements. through trade Key performance Indicator Key performance Indicator Develop and curriculum integrate into agro-based current primary and Review current programs at FCA, FIT, farm hands-on promote to USP Navuso, secondary school programs by 2008 approach by 2007 each identified commodity by Q4 2006. follow proven local & overseas examples) application of these standards by 2007. Finalise strategic development plan of companies based Agro large three Set-up by 2007 to stimulate and production improve level processing capability and capacity. (not to re-invent the wheel – organisation, quality-auditing food a Set-up affiliated to an internationally recognized body to implement and police or monitor • • • • • Strategy Strategy and enforced quality standards. based companies) quality standards economics and farming best practices. relating to environmental protection. sustainability programs. Support for commodity/industry directed extension efforts. determined industry support to Legislation Strengthen and promote integrated agro supply chain process from to production market (setting up of integrated Agro Strengthen and support to international Concerted educational programs on agro- regulations and laws existing of Enforcement Continual awareness in environmental • • • • • • • Objective 3: Enhancing quality and consistency of supply Objective 4: Ensuring and commercially capitalizing on environmental sustainability

86 Organization Implementation MPUID MA MF MFAET AMA MHAI MCI Organization Implementation MCI MJ MFAET MA FTIB MPEPSR AMA FCCI Necessary Resources ALP & ROI funding. ALP PWD budget Foreign Affairs Commerce and office pursue to Mode International 4 of Agreement Service Necessary Resources from donor agencies. Use available funds other resource and govt Key performance Indicator Key performance Indicator and infrastructure development budget. agriculture production. bilateral agreement in identified countries. PWD to include development and maintenance of maintenance and development include to PWD farm access roads in there 2007 to 2011 capital Align ALP and ROI development to program support linked rural to road commercial Allow qualified specific in capacities technical firms Agrobusiness Agricultural workers commodity areas and identified by MA, through • • • competition by Qtr 4 2006. every three years commencing Qtr 1 2007. local & overseas examples) Resolve situation on private and public sector public and private on situation Resolve Review Investment policies through wider consultations with all relevant stakeholders with a view to GDP growth on regular basis Set-up three large Agro based companies by 2007 to stimulate production level improve and processing capability and capacity. (not to re-invent the wheel – follow proven • • • Strategy Strategy Improvement in roading access traditional foods access to technology specialist expertise for industry Public funding of non-government research areas identified by MA Education in the value of growing and eating Revitalization of agricultural research and Making available food technology and other qualified allow to Agreement Services Review Agricultural workers and Agrobusiness firms technical capacities in specific commodity agricultural sector overseas investors Promotion of the incentives available to Act Implementation of Investment Promotion of horticultural and processing agro- export opportunities to • • • • • • • • • Objective 5: Invest in Agriculture Processing [Agro-Based Industry] Objective 5: Invest in Objective 6: Encourage the transformation of subsistence to commercial farming

87 Organization Implementation Organization RBF MFNP FDB Office PM’s MA MFAET Implementation MA MFNP MPEPSR PSC Necessary Resources RBF approvals. FDB commitment Board take to review proactive of lending criteria to the Agro sector. Necessary Resources Fund (ALP/ROI) Source funding central Govt, and from Donor Key performance Indicator Key performance Indicator Qtr 3 2007. Substantiate new approach to Extension to approach new Substantiate and Research provided with service specific emphasis specific currently on commodity development from • Government to review the existing Sugarcane Funds Sugarcane existing the review to Government Authority and Agriculture convert Bank, into with low to 10% by Qtr 1 2007. Raise the tariff interest rate (<3%) by Qtr 2 2007. Open branch of Exim Bank (China) in Fiji or explore possibility of channelling funds condition FDB reform the Agro lending policy by Qtr through 2 FDB on FDB to establish a special orientated loan agro-enterprises, facility with for a export nominal interest rate (2%/yr) and where the overriding consideration is based on loan serviceability rather than collateral by Qtr 4 2006/Q1 2007. offered 2007. • • • • Strategy Strategy associations and nucleus processors nucleus and associations industry and agro-industry development strategies. and industry strategy development implementation. Supporting and exporters productive extension approach. lending industry at senior levels Facilitate working capital to exporters/processors sector Merge Extension and Research and linked to commodities to linked and Research and Extension Merge commodity with link to Division Research MOA Strengthen An emphasis on on-farm demonstrations and other into Extension ALP Absorb agricultural for policies and outlook review to FDB FDB to be more proactive in discussions with credit informal the of development the for Support Review and increase Food & Agriculture import tariff structure to encourage growth in the local Agro industry. • • • • • • • • • • Objective 7: Rationalizing and focus Research Extension efforts Objective 8: Improving supply and effectiveness of credit

88 Organization Implementation ADB MA MFNP MPUID MFAET FTIB MCI Necessary Resources projects. Rationalize within resource the Ministry, Commerce Foreign Affairs & FTIB strengthening on foreign to support trade office ADB source funds for and ROI projects. ALP Funding for PWD Key performance Indicator Implementation of ALP, ROI and PWD capital Implement by Qtr appointments of Ag Trade reps in Key Markets 1 2007 (in-line with Review with a view to reform all the existing of revitalization govt the lead to organizations agro Agro sector complementing and not competing with the private sector Rewa Rice, AMA, FPL, Batiri, (Rewa Dairy) CIDA, Copra Yaqara, FMIB, programs – Qtr 1 2007. identified in (1)). Millers by Qtr 1 2007. • • • Strategy Improve port facilities services. utilities. services to promote trade with outer-islands. Support for industry organizations organizations and sustainability to be run and operate on commercial basis. Upgrade roading network, airport, jetties and Provision of reliable and timely shipping Facilitate the establishment of industry Legislation to allow industry self management external the expand] to [restructure Reinforced trade department in foreign office Rationalise existing government agro assets • • • • • • • • Objective 9: Public investment in critical infrastructure

89 Organization Implementation MEYS MA MFNP MIC FTIB Necessary Resources Rationalisation alignment of and resources within relevant existing govt agencies and private sectors. Key performance Indicator Review current programs at Navuso, FCA, Tutu to FIT, promote, programs curricular and approach farm hands-on establish Focus on Agricultural sciences (including other and USP in programs technology) food Prioritise Government include scholarship agriculture/food scientist to training program, minimum 5 scholarships per year at reputable overseas universities. MA to PSC to review the terms and offered conditions to scientist working at key govt Utilise media outlets radio, (TV, newspaper, etc) to promote awareness on agriculture Qtr commencing programs related aqua and by 2007. local institutions by Qtr 1 2007. participate commencing Qtr 3/Qtr 4 2006. research institutions by Qtr 1 2007. 4 2006. • • • • • Strategy radio programs As part of existing youth training programs business and farm managers Increase apprentice in farming institutions Utilizing distance education programs through As part of programs to promoting Fijians in A focus of FCA on training commercial farmers • • • • • Objective 10: Promote Farming adaptation as a Business

90 Organization Organization Implementation Implementation ME MA MFNP MIC FTIB MH AMA Necessary Resources Necessary Resources Rationalization alignment and of existing resources relevant Govt agencies within and private sectors. Key performance Indicator Key performance Indicator Complete consolidation framework by Review six legislation by Qtr 4 2007 Qtr 4 2007. 2006. within Govt agencies. billboards. Develop generic brand in consultation with relevant stakeholders by Qtr 4 resources limited of coordination Proper “Support the local farmer; produce” advertisement eat on Fiji roadside • • • • • Strategy Strategy overseas and local markets. Establish presence in key overseas markets. Promote consumption of locally produce products. sites. Review and consolidate all existing legislations under MA. Establish a generic brand name that is vibrant and modern and vibrant is that name brand generic a Establish Agro Sector for produce Fiji that encapsulates the values: pristine & clean, GMO free and healthy produce. quality, Aggressive marketing and awareness programs in key Establish appropriate marketing materials including web Consolidate all existing legislation (e.g. Export/Import Pure License) relating Agri/food trade under Food MA to Act, provide cohesive framework for the development of Agri the sector. • • • • • • • Objective 11: Marketing & Brand development and promotion Objective 11: Objective 12: Enabling Environment

91 GARMENT INDUSTRY

Vision:

To be the regional TCF manufacturing centre

1.0 Overview

1.1 The Garment Industry was Fiji’s fastest g r o w i n g i n d u s t r y following the events of 1987. This rapid growth was largely due to Government support through the introduction of Tax Free Factory/Tax Free Zone legislation in 1987 and favourable trading arrangements under SPARTECA and the bilateral agreement with the US. Fiji has been by and large the only Pacific Island country that has benefited substantially from SPARTECA.

1.2 The Textile Clothing and Footwear (TCF) Industry achieved its peak export level of F$374 million in 1999/2000 but has been on the decline ever since. The negative perception created by the upheavals of 2000 and the events thereafter has been a major hurdle in the TCF Industry reclaiming its status as one of the major export earner in the country.

1.3 The industry has suffered under the pressures of globalization and the emergence of China and other low-cost producers. Fiji’s TCF Industry acknowledges that it is competitively disadvantaged by high costs of production, and distance from the European and US markets and has strategically positioned itself to focus on niche markets particularly in Australian and New Zealand. The newly negotiated arrangement on the extension of the S-TCF Scheme is a positive step, however, the exclusion of wool will continue to limit the Industry realizing its full potential. Government is urged to continue negotiating and lobbying for the inclusion of wool with the current arrangement.

92 1.4 The Industry also recognises the importance of investment in human resources and capital to improve productivity levels to enable it to become more internationally competitive. Necessary structural adjustments for the Industry are being proposed. However, industry players have realised that there are certain “hard core” issues that should be addressed immediately, and remain optimistic of the future of the Industry.

2.0 Strategic Issues

2.1 Employment Employment in the industry was 19,000 at its peak in early 1999/2000 and has been declining since. The TCF Industry currently employs 9,000. The workforce comprises largely of females and school leavers. Over 40 local and overseas companies have closed down over the years and this has translated into massive job losses.

2.2 Capacity Development Factory outlets to be allowed for visitors to Fiji. There is also limited use of advanced technology and world best practices in manufacturing. There is also the need to establish a credible audit and compliance system in Fiji.

2.3 Human Capital Development There is a need for higher level of technical skill for workers and more take up for training under the structural adjustment package and the need to improve warehouse management skills.

2.4 Cost of Doing Business The Employment Relations Bill currently before Parliament must be curtailed in the adding of costs like the proposed maternity, sick pay, redundancy, bereavement and union recognition clauses. To legislate cost increases without gaining any productivity offsets will cause further problems to an industry already under stress.

2.5 Market Access A missing component of the new improved S-TCF scheme was the continued exclusion of wool within the scheme. This exclusion will limit the industry’s full potential ever being fulfilled and Fiji must lobby for the eventual inclusion.

93 Organization Implementation Exporters Club MFNP MFNP MLIR MLIR MFAET TPAF TPAF Necessary Resources On going diplomatic dialogue Additional “user pay” structure Accelerated depreciation on IT Suitable locations. Overseas consultant Overseas consultant Political will On going lobby to MLIR ACTION PLAN GARMENT INDUSTRY Key performance Indicator TPAF offering more TCF courses than more offering TPAF Diplomatic dialogue to be completed by 2008 By 2007 All exporters using IT Factory outlets direct to tourist previous Include Productivity Committees within the Employment Relation Bill Immediate TPAF to include an on going course. TPAF Strategy Improve IT take up Improve IT into the tourist industry Tap in the Curtailing of the ‘maternity clause’ Continue to lobby for wool inclusion under the S-TCF scheme Compliance under rules of origin Strengthen technical skills Continue and strengthen Productivity Employment Relation Bill Strengthen Warehouse skills Strengthen Warehouse Objective: Increase TCF exports

94 MINERAL WATER Vision: The Leading Exporter of Bottled Mineral Water in the Australasia Region 1.0 Overview

1.1 The beverage market the world over is experiencing a major transformation. Consumers are becoming health conscious and are opting to drink bottled water rather than consuming “fizzy” drinks. Giant multinational companies such as Pepsi Co. and Coca-Cola Amatil are purchasing stakes in Natural Mineral Water companies all over the world in a bid to capture a market share of this growing beverage product.

1.2 Fiji must take heed of this thriving industry. The urgency is now to put in place the necessary supporting environment and standards requirements for industry players so that the Industry is competitive enough to operate in an environment compatible with international best practices.

1.3 The strategy is not too comprehensive in its entirety, but aims to safeguard the image of the bottled Fiji Water “brand” as portrayed in our major markets. This will also ensure there is uniformity in compliance of bottled water standards and industry players are accredited to international bottlers association requirements. 2.0 Strategic Issues

2.1 Fulfilling Market Access Requirement The Bottled Water Standards Order 2004 will need to be amended to standardize that all bottlers of water be affiliated to the International Bottling Water Association. This will ensure compatibility to fulfil market access requirements.

2.2 Improving Effective Consultation Mechanism – Private Sector & Government To strengthen the consultative mechanism between the public and the private sector the industry players will need to establish a Mineral Water Industry Association. Members of this Association when invited to the Water Resource Management Committee or other government sponsored forum will represent the interest of all members.

95 2.3 Ensuring the Economic & Sustainable Viability of the Mineral Water Bottling Industry The sustainability and the viability of the Mineral Water Industry is critical for the sector. On-going consultation and co-ordination on common interest must be undertaken. The lack of effective consultation has been a hindrance to respond critically to the needs of the Industry players.

96 , MFAET, MH, Organization Organization Implementation Implementation MCI, MRD MCI MRD, Necessary Resources Necessary Resources Office to facilitate Office Trade Trade Standards & Quality Control issues Re-Orientation of policy initiatives On-going/seek TA from Bi/Lateral partners on standards requirement • • • ACTION PLAN MINERAL WATER MINERAL Key performance Indicator Key performance Indicator 2007 committees by Qtr 4 2007 Establishment of Beverages Industry body by Qtr a 3 National Industry players to represented be invited/ in Government Amendment process to start 2006, draft to in be available by late Industry players to be invited for Consultations standards their for bodies standards with on bottled water. relevant 2006/early 2007; feedback; • • • • • Strategy Strategy Order 2004 to mandate that all bottlers all that mandate to 2004 Order of water to be affiliated to international bottlers water association (IBWA & Government. of machinery policy the in i.e. Water Resource Management ABWI) Association of Fiji Committee Amend the Bottled Water Standard Formation of a represented be to Players Sector Mineral Private Water • • • Objective 2: To improve effective consultation mechanism between Private Sector & Government Objective 2: To Objective 1: To Fulfil Market Access Requirements Fulfil Market Objective 1: To

97 Organization Implementation MCI, MRD, MA, ME, FIRCA, MFNP Necessary Resources Dept of Fair Trading and Consumer and Trading Fair of Dept Affairs (MCI) to spearhead the initiative Strengthened consultative Uniformity in standards compliance requirements among of Compatibility of Budget National Announcement 2006 –Nov & on-going lobbying with & MFNP FIRCA Amend the Water Order 2004 Standards to mandate a one- company/one groundwater mechanisms by Qtr 3 2007 Industry players by Qtr 3 2007 Standards by Qtr 3 2007 source policy by Qtr 3 2007 Key performance Indicator • • • • • Strategy Improve consultative dialogue among Re-enforcement of on standards among compliance the industry standards existing of review On-going to be compatible with International Bottlers to be made aware implication of of water extraction on the the environment. Bottlers to consider Provision of necessary Incentives to Industry the Mineral Water groundwater of Protection Commercial source in the Mineral Water bottling the stakeholders players conventions “water harvesting” industry • • • • • • Objective 3: To Make Water Bottling Economically viable & Sustainable Make Water Objective 3: To

98 TOURISM

Vision:

The Key Aspirational Destination In The Pacific Rim 1.0 Overview

1.1 Tourism is a myriad of partnerships between a diverse range of private sector businesses, the communities and government. Tourism in Fiji has grown steadily over the past few years. After the events of 2000, the tourism industry has recovered from a significant decline with record visitor numbers, significant economic contribution, employment generation and investment in new infrastructure. The tourism industry also contributes significantly to the development and promotion of Fiji’s positive, and endearing image across the globe.

1.2 Our tourism products and services have grown in number, range, quality and complexity. Fiji has emerged as a destination of international quality, attracting increasing numbers of regional and global travellers, business persons, friends and relatives. In spite of the turbulence and global threats to safety and security, the prognosis for tourism is buoyancy and growth.

1.3 Fiji must compete to be included in operators’ portfolio and then compete to be included prominently. Operators compare destinations with expected consumer needs, availability and quality required attractions and facilities, value for money at least equal to competitors, marketing support from national and regional organization to give a clear identity to the destinations: level of social and environmental responsibility.

1.4 Attracting tourists to Fiji depends on the many players cooperatively addressing each of the many tourists needs and these involve every aspect of the economy. So tourism industry can only be as competitive as the economy in which it operates. Fiji’s players include private and public sector producers and service providers - resource owners, farmers resort operators, agribusiness, utility operators, bankers and investors.

99 2.0 Where Does Fiji Tourism Stand Today?

2.1 Tourism has become Fiji’s major foreign exchange earner and employment generator. In 2005 visitor arrivals reached 500,800 giving us a total earning of F$712.8million. While these figures represent the highest ever recorded for Fiji, they are a reflection of Fiji’s potential.

2.2 Fiji’s tourism development model includes the four A’s and one P, namely access, accommodation, amenities, attractions and people. It is a model that embraces the growth of all market segments to their optimal levels. This would necessitate paying attention to all aspects of tourism infrastructure whether access, accommodation, attractions, amenities. However, it is equally important to focus provision of incentives for other aspects like Meetings, Incentives, Conferences & Exhibitions (MICE), shopping, amusement/theme parks, evening entertainment, restaurants, golf courses, eco-tourism, transport, travel agencies and upgrading of manpower. The conference segment is a huge potential waiting to be tapped. Fiji has a very limited ability to tap into this segment due to lack of infrastructure.

2.3 Balancing Supply and Demand As tourism grows, Fiji has a challenge to balance the supply of tourism accommodation with international air capacity. Further, there is a need to balance domestic transport links, mainly domestic aviation with preferred development of the outer island areas. Lastly, there is the need to balance growth in room stock and air capacity with a growth in attractions and experiences. A fundamental issue is the need to match the diversity of tourism product to potential future markets. 3.0 Strategic Issues

3.1 Access to markets and destinations Growth in air capacity in existing markets and new routes, perhaps with new carriers for emerging markets, will drive tourism growth. Air, Land and Sea linkages will spread tourism throughout Fiji for regional prosperity.

3.2 Accommodation Fiji could be expected to have 16,000 rooms in 430 properties by 2014. This is a conservative assumption based on the current known approved projects, some of these will not proceed and others (presently unknown) will eventuate. This estimate depends on a variety of factors in terms of investment conditions, marketing and tourism activity.

100 3.3 Attractions There is a tendency now to be a relative lack of attractions/experiences in Fiji’s tourism product. Tourism is reckoned the key driver of economic growth in Fiji. This growth is dependent on volume of visitor nights (arrivals and length of stay) and visitor expenditure, which provides an important platform for other industry to grow. The money visitors spend in the community is the benefit probably most targeted. It determines the impact of tourism on the local economy in terms of receipts, employment and livelihood.

3.4 Amenities There is a need to capture emerging segments of health tourism, sports tourism and MICE market. Fiji needs to provide the necessary amenities to accommodate this segment.

3.5 Activities A driving force for high tourist arrivals is the range of activities that are available in the host region. Fiji is currently fighting to develop the type, locations and target group to compete on a level playing field with other markets.

3.6 Human Resource A well-trained and appropriately educated workforce is an essential pillar of support for Fiji tourism. Fiji, however, is a country that suffers from both unemployment and underemployment. Some of the consequences of the rapid growth in tourism have included a lack of job-ready entrants for the industry; incongruence between educational courses and the needs of the industry; skill shortages in certain key occupational areas (such as supervisors); dropping service standards; and on- going reliance on expatriate labour.

101 Implementation Organization FIHTA SOFTA ETAF MFALPD MTT FVB FIBA MCI MTT Police Department of Culture • • • • • • • • • • • building structure required Plan Technical Assistance Technical Training for locals on the Funding of Tourism Master Necessary Resources

• • •

TOURISM ACTION PLAN Key Performance Indicator Establish a Fijian Cultural Theme Creation of a unique set of market Keeping the Fijian tourism Character infrastructure and in products in design, product delivery and Increase in Fijian traditional cuisine, Levuka/Ovalau declared a World Heritage Site and in the World park as an anchor attraction in Nadi niches activities handicrafts with authentic label Heritage Listing by 2009 • • • • • Strategy Create Brand Fiji to ensure Fiji as a prime Encourage Development of Fijian character products to create authentic/ unique Improve tourism product such as food, components shopping, new attractions Establish appropriate tourism for area on each social, ecological and economic basis i.e creating specific sub-destinations while maintaining the overall presentation Undertake a scoping study and feasibility assessment for a major cultural attraction aspirational destination market niches and activities of Fiji as one destination in Nadi • • • • • Objective 1: Ensure that Fiji develops a unique product position

102 MTT MPUID MPEPSR Maritime stakeholders MFALPD and Aviation MTT FVB FIBA FIHTA SOFTA ETAF Police MCI, MTT, Department of MFALPD Organization Implementation Implementation Organization • • • • • • • • Culture • • • • • • Technical assistance Technical Funding MTT Budget Master Plan) (Tourism Infrastructure Technical assistance Technical Funding - MTT Budget Master Plan) (Tourism Necessary Resources Necessary Resources • • • • • Established reservation and Linking reservation and booking Established linkages and opportunities livelihood Identified operators system to Bula Fiji website and small micro enterprises booking system for small mechanisms between tourism Key Performance Indicator Key Performance Indicator Growth in long haul market for tourism transport segment Zealand to the North Duty concessions and tax rebates frills no airlines low-cost in Growth airlines out of Australia and New and Efficient cost linkage effective • • • • • • • • Strategy Strategy Provide Training and mentoring in the business of small tourism scale small for mechanism certification a Offering Providing the services of joint marketing and promotion Provide duty concessions that will enable the purchase of purchase the enable will that concessions duty Provide Airline Encourage and support our national Gateway to the North Division needs to be effectively scale tourism businesses and support enterprise operations that meet required standards facility for certified operations Promote E-Fiji on distribution new transport facilities Identify priorities for adequate roads to provide access Encourage code sharing with other airlines Leverage overnight at tourist markets Assist the expansion of fly cruise markets established Encourage faster sea linkages (catamarans). • • • • • • • • • • • • Objective 2: To increase competitiveness on a level of playing field Objective 2: To support and encourage new transport linkages for domestic international markets Objective 3: To

103 FIHTA SOFTA ETAF FAB MTT MTT FIBA MCI PSC Organization Implementation • • • • • • • • • Infrastructure Technical assistance Technical Funding - MTT Budget Master Plan) (Tourism Training Necessary Resources • • • • Meeting tourism training targets in supply of suitably trained and qualified staff Tourism training and education more accessible Improved quality of service Key Performance Indicator

• • • Strategy Encourage investment in education Facilitate a coordinated approach to training and education for the tourism hospitality industries Creating opportunities for up-skilling of existing employees Create pathways for articulation between levels of qualification Implement managed apprenticeship or cadetship in partnership with industry • • • • • Objective 4: To ensure a well trained and appropriately educated workforce to support Objective the 4: To tourism industry

104 AUDIO-VISUAL INDUSTRY

Vision:

A New Era of Great Opportunities

1.0 Overview

1.1 The Audio- Visual Industry has enormous potential for g e n e r a t i n g income and employment in the domestic economy. A F$30million film production alone shot over eight weeks can employ close to 400 locals. Foreign production companies have also contributed positively to improving existing infrastructure and also building new infrastructure while shooting on location. However, despite substantial benefits, a point to note is the amount of money spent externally, that potentially could have been retained. This represent investment opportunities and include film infrastructure, availability of specialised movie related equipment and availability of top class logistics support such as transportation, accommodation and repair infrastructure.

1.2 The lack of expertise limits the capacity for locals to diversify into other service lines available in filmmaking. In establishing the FAVC, Government is aware of the trend of convergent media pointing to the fact that the technologies of telephone, computer, film and television will increasingly converge into a single new media in the digital age. This convergence is in fact now emerging with a new name, the communication information technology (cit) multimedia sector. It is the fastest growing sector in the world today. Already the process of information capture processing and output are increasingly digitized. In the film world the use of Hi definition digital cameras is becoming increasingly prevalent since it is cheaper and easier to use. Training needs would have to be positioned to benefit from this technology.

1.3 On-the job training opportunities with visiting production companies as well as certification programmes for trainees is a priority. There is also a need to develop local expertise for producing films and other art forms that are about the people of Fiji. For aspiring local producers, finance is required to get them started.

105 1.4 As a member of the AFCI which establishes high professional standards, the FAVC has to continuously strive to improve its performance. Therefore the necessary support mechanisms must be encouraged to enable this. Improving the coordination of all agencies involved, (both pre and post production), understanding the relevant legislations, processes and procedures to be followed, and maintaining a seamless working relationship with FIRCA will contribute to reducing the cost of doing business for all stakeholders.

1.5 Finally, there is a need to broaden existing trade/diplomatic missions’ agenda to include the Industry, improve synergy with the Fiji Islands Trade and Investment Bureau (FTIB) and Fiji Visitors Bureau (FVB) on promotion of the industry abroad and conduct visits to specific film schools abroad to promote Fiji as a destination for film shooting.

2.0 Strategic Issues

2.1 Capacity Development The lack of quality production facilities limits the attractiveness of shooting. There is stiff competition from countries with similar climatic conditions but they have that extra edge in being able to provide quality production facilities for location shoot. Two production facilities that are usually the most sought after are sound stages and water tanks.

2.2 Human Capital Development There is a lack of technical and specialized skills to meet the demand of the industry. Important factors that attract film productions include film crew depth of knowledge, availability of general skills such as carpenters for set constructions and electricians to support gaffer, lighting and sound crews. There is also a lack of knowledge of the processes involved in filmmaking, which limits the support given to foreign production companies. Related to this is the lack of accreditation of personnel in the Industry to secure work contracts abroad.

2.3 Trade Finance Co-finance arrangements for local productions and the development of a film fund will assist in getting aspiring local producers to become an integral part of the industry.

2.4 Business Competency Development Competency to start small and micro-enterprises in the Audio-Visual Industry is lacking. This can be enhanced through regular attendance of training courses and exposure to cineposiums, and trade shows run by AFCI.

106 3.0 Strategy Support Network and Services Delivery Network

3.1 A workable Copyright Act is required to have a thriving Industry. The requirement for local content under the proposed Broadcasting Bill can only be realised with the proper financial support for local producers to produce local films on Fiji’s multi-cultural way of life, and which can be showcased to the rest of the world.

3.2 Trade Facilitation The absence of an ATA Carnet, an international customs document that permits duty-free and tax-free temporary import of goods for up to one year, is costly to producers, as they need to use the services provided by local customs clearing companies and it generally takes longer to clear equipment. When issued with an ATA Carnet, sales teams, exhibitors and other business professionals can make advance customs arrangements.

3.3 Market Access The absence of Co-production treaties limits the options available to Fiji to secure favourable arrangements with other countries in film production. Countries which already have double taxation agreements with Fiji could be a good starting point in negotiating Co-production treaties with i.e. tax sparing arrangements combined with double tax treaties especially with film making countries. Also spiralling costs of making movies in the United States (US) has given rise to runaway productions i.e. producers seeking cheaper locations without having to compromise on quality.

107 Organization Organization Implementation Implementation FIT FAVC TPAF USP Foreign Production Companies MFNP FAVC MCI Necessary Resources Necessary Resources FIT personnel FIT personnel TPAF/FAVC USP personnel USP production TPAF/FAVC/Foreign personnel companies’ Land PSIP Application for 2007 PSIP Capital budget of F$1m for Water Capital budget of F$1m for Water and Sound stage Tank Expertise –design, layout, costing Staff and equipment – Film/TV Unit Staff • • • •

• • • • ACTION PLAN AUDIO VISUAL Key performance Indicator Key performance Indicator Increase in visiting productions by 2008 Minimum graduates of 10 per year Minimum enrolment of 50 per year Minimum graduates of 10 per year Minimum of 50 trainees each year Decrease in foreign crew by at least 5% within 3 years Increase in new economic activity by 2008 Increase in local service providers by 2008 At least 5 productions per year • • • • • • • • • Strategy Strategy Continuation of Animation program at Continuation of related technical AV Introduction of TPAF courses at Obtain Government support to build soundstage and water tank facility for shooting Use existing structure such as the Film/ TV Unit so that facilities and services Industry AV to the can be offered FIT Continuation of “above the line” courses” at USP Introduction of trainee programs for film crew with visiting production companies • • • • • • Objective 1: Capacity Development – To promptly develop audio-visual infrastructure Objective 1: Capacity Development – To raise the skills base in Industry Objective 2: Human Capital Development – To

108 Organization Implementation Organization Organization SG’s Office SG’s Police MCI TV One FAVC Assoc. FAVI Implementation Implementation FAVC FAVC FDB Necessary Resources Necessary Resources Necessary Resources FAVC personnel FAVC SG’s Office/Police personnel Office/Police SG’s personnel Office FAVC/FAVCI/SG’s personnel office FAVC/SG’s • • • • Govt. Grant to FAVC of $200,000 Govt. Grant to FAVC Allocation of $100,000 FDB • • Key performance Indicator Key performance Indicator More local programs on TV by 2007 More local programs on Decrease in piracy outlets by 2008 Increase in piracy awareness Increase in local producers by 2007. Key performance Indicator Increase in participation at AFCI Increase in participation at stakeholders by 2007. AV events by Increase in number of local producers by 2007. • • • • • • Strategy Strategy Strategy Ensure full enforcement of the Act Copyright Ensure implementation of the “local content: requirement in new Act Broadcasting Review suitability of “Acts” in the digital age Develop criteria as pre-qualification for grants and loans to potential local producers Develop proposal to FDB co-finance local productions Extend invitation for participation at stakeholders AV AFCI events to • • • • • • Objective 3: Trade Finance - To develop sources of funding for filmmakers and the AV Industry AV develop sources of funding for filmmakers and the Finance - To Objective 3: Trade stakeholders AV raise level of business competency Objective 4: Business Competency – To Industry AV create a business environment conducive to the Objective 5: Legislation – To

109 Organization Organization Implementation Implementation FIRCA FAVC MFAET MFAET FIRCA FAVC Necessary Resources Necessary Resources Foreign Affairs/FIRCA/FAVC Affairs/FIRCA/FAVC Foreign personnel Foreign Affairs/FIRCA/FAVC Affairs/FIRCA/FAVC Foreign personnel • • Key performance Indicator One Co-production treaty signed by 2008 Key performance Indicator Process to be completed by 2008 • • Strategy Strategy Sign up to the international customs carnet Negotiate Co-production treaties with film making countries. • • Objective 7: Market Access – To secure favourable arrangements with other countries in Access – To Objective 7: Market Objective 6: Trade Facilitation – To facilitate simple tax-free import and export of Facilitation – To Objective 6: Trade temporary film equipment film production

110 INFORMATION COMMUNICATION TECHNOLOGY (ICT) Vision:

To be the ICT hub for the Pacific region.

1.0 Overview

1.1 ICT is a totally new sector contributing to the economic development of Fiji. The sector is comprised of three main activities - Business Process outsourcing (BPO), Software development and IT training. There is potential for diversified export activities in this sector which is impeded by the current monopoly status of the telecommunications industry.

1.2 The sector currently cannot compete in export of ICT services with developed countries such as Australia and New Zealand. However, it has the potential to export services to the neighbouring Pacific Island countries. This is due to the advantage Fiji has in its geographical location. For example, Quest is based in Fiji mainly because of its central location and favourable time zones.

1.3 The industry has achieved competence with the Southern Cross Cable Network (SCCN) that provides direct connectivity with Australia, New Zealand and the United States of America. This competence is slowed by the restriction in the volume of data, cost of utilities and line rentals. These factors need to be addressed in order to gain maximum economic benefits from this sector.

2.0 Strategic Issues

2.1 Deregulate the telecommunications industry

More effort should be directed at improving the rate of deregulation. This will lead to a reduction in the cost of utilities and line rentals and will promote growth of businesses and exports in this sector.

111 3.0 Investment in IT Companies

3.1 There is a need to increase the number of Business Process Outsourcing, Software Development and IT Training companies in Fiji. Promotion of the sector will need to be given priority by FTIB. The current tax incentives also need to be reviewed in order to incorporate the different nature of IT companies and one such area is IT training which should be included in the current definition. This will allow other companies such as IT Training Companies to benefit from tax incentives. Duty on portable computer devices should also be reviewed. The lowering of duty rates on hardware will give IT Companies a competitive edge.

4.0 Employment

4.1 Currently, the market is flooded with IT graduates but, to become a computer operator, one need only have skills acquired up to secondary education. These graduates are not able to put into practice the skills acquired through the education system. In consideration of this factor, there is a need to create more IT specific jobs so that these graduates can fill in the positions.

4.2 Brain drain is a major issue affecting the sector. A major contributing factor to this is that locals are offered less remuneration packages by employers than counterparts in countries such as Australia and New Zealand. To retain IT experts, competitive remuneration package, bonus and incentives be given to our locals. Relaxation of policies to permit foreign IT companies to set up locally must be encouraged to provide employment opportunities.

5.0 Infrastructure

5.1 Necessary infrastructure is required to ensure business continuity in the sector such as improved flight services at competitive costs to strategic destinations such as Singapore and India. There is also a need to provide Tele Parks where IT businesses can be set up. Tele Parks should be promoted with global standards provided with reliable digital access nationwide and priced competitively.

6.0 Education

6.1 IT curriculum should be introduced in the education system to impart knowledge from an early age right through to tertiary institutions. This will increase competency

112 level in the sector. Whilst the initiative taken by Government to provide free tuition for Fijian students, it should look at providing lower telecommunication rates for the school to foster IT learning in these schools.

7.0 Research and Development

7.1 Investment in research and development is required to increase the expertise level. Developers of software need to be continuously adhere to international standards in order to compete with its competitors.

8.0 Standards

8.1 Adoption of global standards (ISO/IEC 9066: Information Processing System) will support product and services offered in the export market to be internationally recognised and be competitive. The level of literacy rate for IT must be benchmarked to international standard.

9.0 E-Commerce

9.1 E-commerce should be used to promote ITC adoption as a catalyst for growth and cost reduction. E-commerce can be used by the business sectors and consumers in doing their day-to-day transactions. E-enabling training will need to be offered to promote the sector.

113 FTIB FIRCA Organization

• • Implementation Organization Commerce Commission MIC Implementation

• • Necessary Resources of $0.34 million promotion for activities FTIB’s to be FIRCA personnel (ongoing increased by 10%. budgetary provisions) The current budgetary allocation Necessary Resources

• • Commerce Commission by 20%. Increase the current allocation budgetary of $0.46 million of

• ICT ACTION PLAN Key performance Indicator established in Fiji by 100% 2010. Increase in number of companies Key performance Indicator Increase in export revenue by 30% 2010. Increase in employment by 50% 2010.

• • • Increase telecommunication service provider from three to five providers by 2010

• Strategy Strategy providers Assistance. Promote investment in investment missions locally and Fiji abroad. through Software Outsourcing, Process (Business Companies). Taining Development & IT Review of tax Incentives to include Training. IT Duty review on Personal Digital Deregulate monopolistic service

• • • • Objective 1: Introduce Competition in Telecommunication Sector Objective 1: Introduce Competition in Telecommunication Objective 2: Increase Investment in ICT Companies

114 ATH MTT MIC Organization MFNP (ITC MFNP Department)

Organization Implementation • • • • Implementation outsourced. 40% of ITC contracts services to by provided Government to be Necessary Resources

• Necessary Resources allocation of $1.6 million to be increased by 20% from of Aviation Civil of resources MTT. regulatory unit from MIC. Increase $1.24 of allocation budgetary the million of resources by 20% current for the telecommunication The current budgetary

• • Key performance Indicator Key performance Indicator More direct flights to key destinations Broadband access to urban centres (Except Suva, Lautoka & Labasa) by Tele Parks to meet Global standards by standards Global meet to Parks Tele and increased frequency of flights. Digital access to every village by 2020. 2010. 2015. Establishment of a Tele Park by 2008 Tele Establishment of a

• • • 80 % of Government and corporate clients by 2010 2010 2025 Utilization of locally designed Business solutions by 50% increase in number of new BPO industries by Software developers to reach the 1000 mark by • •

• • • Strategy Strategy Singapore/India. nationwide. Kalabo. Improve transport systems in particular eg. destinations strategic to services flight Provide comprehensive, competitively reliable priced & digital access Establish and promote Tele parks with global standards in the right location e.g. Government to provide local companies contracts. with IT

• • • • Objective 3: Retention of Skilled Labourers Objective 4: Provide Necessary Infrastructure to ensure Business Continuity

115 Exporters MEYS IT Trainers IT MIC MFNP Standards and Quality Control Office MEYS Trade Trade All ICT

Organization

• • Organization • Implementation • • • • Implementation IT Trainers IT Implementation Organization Necessary Resources Necessary Resources Necessary Resources research for the Ministry of Education. Increase the allocation of $1.66 million of resources current and development curriculum for 10% by budgetary Development. Funds of $0.5 million/ year to be raised by Private Sector for Research and

• • against global benchmark. employment. (on-going) Increase the current budgetary allocation $0.067 of million of resources by 10% for Trading Standards of Department of Trade Standards standards global set to Office Control Quality and in ICT. The current budgetary allocation of $0.0055 million of resources to be increased by 20% for the Ministry of literacy IT benchmark to training & development Education for research The private sector to take setting the standards lead for role prerequisite in for IT/BPO

• • • Key performance Indicator Key performance Indicator New and improved products by 2015. IT Curriculum to be reviewed and aligned and reviewed be to Curriculum IT to global standards by 2008. and workforce by 2015. Achieve full IT competency in students products and services by 2015. 50% increase in exports of software Key performance Indicator

• • • • Processing System) by 2015 exercise by 2008. employment. All exporters standards (ISO/IEC 9066 Information to adopt global benchmarking literacy IT undergo to Fiji by met be to standards equivalent Set IT/BPO for prerequisite as candidates

• • • Strategy Strategy Strategy & Development. standards. global benchmark English Skills to global benchmark Private and Public sector (non-financial assistance) to jointly undertake Research Introduction and adoption of Global National “IT” literacy measured against Align Professional Spoken and Written

• • • workforce. • Government to take increase IT competency in schools and the IT proactive role to Objective 5: Review and Increase the ICT curriculum in education system Objective 6: Increase Research & Development Objective 7: Create Global Standards in the IT/BPO Industry

116 Bureau of Statistics

Organization MIC I IT Trainers IT

• Organization Implementation • • Implementation Necessary Resources Necessary Resources Communications. Increase the current budgetary allocation of e-commerce for 30% by resources $6.2 million for the of Ministry of Information and Statistics. The current budgetary allocation of $3.2 million of resources to be of Bureau the for 20% by increased

• • Increase by 50% in e-commerce in 50% by Increase Increase in IT literacy rate by 2011 of data by 2007. Availability activity by 2015. Key performance Indicator Key performance Indicator

• • • Strategy Strategy Data base for ICT Encourage and support e-Commerce Vision Government to implement ICT adoption Offer e-enabling training Offer

• • • • Objective 8: Promote ICT adoption as catalyst for Growth and cost reduction Objective 9: Develop ICT National Statistical Data base

117 FINANCIAL SERVICES INVESTMENT % of GDP Vision 35 30

25 To excel in the facilitation Government and creation of an enabling 20 environment for exports through 15 Private effective services delivery. 10 5 Statutory Bodies & Public Enterprises 1.0 Overview 0 1977 1981 1985 1989 1993 1997 2001 2005(e) 11 Reserve Bank of Fiji Source: FIBOS and RBF Estimates 1.1 Compared to its neighbouring countries in the South Pacific region, excluding Australia and New Zealand, Fiji has quite an extensive financial system. There are opportunities for developing a dynamic financial sector that could support a broad range of activities, from normal banking operations to a vibrant stock exchange market.

1.2 Although the international financial services market is large, and the scope for exporting services is wide, Fiji does not possess the capacity and competency to compete in the international market. However, financial services must be at the forefront of the export strategy, and capacity building within the financial sector should be given priority. Emphasis should NOT be on export alone, but also focused on domestic need, rather than international demand.

1.3 At the moment there are international commercial prospects for financial consulting services due to Fiji’s easy accessibility to its regional markets and the availability of skills and expertise in this area. While there is minimal international commercial opportunity for capital markets, insurance and banking services, the strategy should focus on the capacity of suppliers of these services to meet, and respond to the needs of the local export oriented business community.

2.0 Strategic Issues

2.1 Market Development and Export Opportunities for financial services There are constraints in promoting the international capabilities of the financial service providers. There is a need to identify potential export opportunities for foreign and domestic investment and increase demand for cross-border supply of financial services in which firms are competitive.

118 2.2 Export- Facilitation Role Accessing to export finance is a major challenge to exporters, particularly to enhance their competitiveness. There is a need to create an enabling environment to allow easy accessibility of export finance. It is understood that the Reserve Bank of Fiji is in the process of reviewing its export credit facility.

2.3 Cost of doing business While lending rates are relatively favourable, the interest rate spread is high, ranging from 7-10 percent compared to international acceptable levels. In addition, the cost of borrowing is high in real terms due to additional charges and fees. The high interest margin contributes to the inefficiency of financial markets and this would exert significant inflationary pressures, which further threatens the survival of many companies. The high cost of listing in the stock exchange also has a slight impact on the level of trading in the equity market. High transaction costs have high impacts on the liquidity of the market. Cost of public utilities such as electricity and telecommunication also contribute to the high cost of doing business.

2.4 Retention of staff Staff retention particularly in the banking and capital markets intermediaries is a major constraint. The high turnover rate of industry personnel increases risk of losing tacit knowledge and regulatory experience. This results in the high cost of recruiting, training and up-skilling of employees.

2.5 Low Financial Literacy There is a limited understanding of the importance and attractiveness of the capital markets as an alternative source of investment. There is also a lack of coordinated efforts to market the services offered by the professional financial and corporate advisors. Financial literacy needs to be broadened so that the potential particularly in capital markets and professional services are widely recognized.

119 Organization Organization Implementation Implementation Commercial Banks, RBF FTIB, Exporters USP, Financial Services USP, providers FTIB and financial service providers Finance for promotion – to be Policy met by financial institutions Necessary Resources Necessary Resources $150,000 to be allocated in the by met be to – cost missions Trade representatives providers financial budget. • • • • ACTION PLAN FINANCIAL SERVICES FINANCIAL Review to be completed Information to be posted on publication and by 2006. websites by 2007 Research to be completed by Participation on at least two trade missions per year. 2008 • • Key performance Indicator Key performance Indicator • • Strategy Strategy Review of export finance facility Export finance information be to made readily available to policy exporters Conduct basic research to identify target markets, services and clients Participate in trade missions abroad • • • • Objective 1 – Better information for international (regional) demand financial services Objective 2 - Extend adequate export credit facilities to the Fijian exporters

120 Organization Organization Organization Implementation Implementation Implementation Financial Services institutions Financial Services providers FEA, Telecom Fiji, Telecom FEA, Commerce Commission, MFNP SPSE, CMDA, RBF, Institutions to cater for costs Advertising) (Promotion & Necessary Resources Necessary Resources Necessary Resources • All cost to be met by financial providers Regulations SPSE Listing Rules, CMDA Act & Cabinet Policy paper RBF Policy and guidelines • • • • Awareness Awareness campaigns to reach at least 70% of the business population by 2008 To be finalized by 2007 To • Key performance Indicator Key performance Indicator Commercial cost structure for public utilities to be reviewed by Listing cost to be reviewed by 2007 2007 Review to be finalized by 2007 Key performance Indicator • • • • Strategy Strategy Strategy Conduct extensive educational and public awareness campaigns through various mediums throughout Fiji Review cost of public utilities for Reduce listing cost at the South structure rate interest review to RBF financial for strategy retention Develop commercial customers Pacific Stock Exchange – e.g. overnight lending rate services institutions • • • • • Objective 3 – Minimize cost of doing business Objective 4 – Retention of industry personnel Objective 5 - Broaden educational and public awareness reach

121 Health Services

Vision: To become a regional hub for a comprehensive international standards health care services in the Pacific.

1.0 Overview

1.1 The provision of health services in Fiji is based on the three-tier system of primary, secondary and tertiary care services. Health care services have been considered satisfactory according to WHO standards. No tertiary services exist but attempts are being made to develop these in priority areas that are feasible by the private sector.

1.2 A broad view could be taken in terms of the health services potential contribution to exports. The areas identified are – support for the tourism sector in Fiji, medical tourism (already underway for the Pacific), pharmaceutical & health supplement production and tertiary services (to stem the flow of capital overseas). The relative contribution of the sector to overall earnings is small, but important, and needs to be considered in the longer term.

1.3 The best option for the sector in the short-term is to implement strategies that would support the major income earner in Fiji viz. tourism in order to create a synergistic effect. Considerable work is needed to develop the services required to an international standard. The current public health services are below the expectations of overseas clients.

1.4 However, there are many opportunities, in addition to cosmetic work and renal transplants, all of which can be tapped into if the appropriate skills, facilities and technology are developed. This will require additional investment over and above what has already been available. Other than Suva Private Hospital there are limited facilities that can provide services such as cosmetic surgery. In addition, the credibility of these facilities and service providers is marginal as the standards of care provided does not match those provided by the Suva Private Hospital or overseas providers. The costs of these services are, however, highly competitive and the introduction of tertiary level services such as kidney transplants will enhance the chances of medical tourism in Fiji.

122 1.5 The other areas identified could then be developed in the medium and long-term.

2.0 Strategic Issues

2.1 Retention of Health Personnel Generally, there is still a shortage and unequal distribution of health manpower throughout the country. Thus adversely affecting the quality of service provided. The health services sector faces challenges in retaining staff. The reason for the migration of these trained professionals relates to inadequate remuneration, poor working conditions and lack of opportunities. This is compounded by the extremely restrictive recruiting policies by the public sector. Considerations such as allowing specialist staff to work in the private sector would allow the professional staff to earn additional income and to expand their professional expertise. This is considered a powerful retention tool.

2.2 Resources Constraints The public health system provides a basic but comprehensive range of primary and secondary care services constrained by substandard facilities and gross under-resourcing. The only private hospital in Fiji provides a comprehensive range of secondary care services provided by local and visiting specialists to Fiji and the Pacific Islands but is hamstrung by its lack of profitability. There is a pressing need for the expansion and upgrade to acceptable standards of the facilities available. The very low fees charged (including at the private hospital) constrain the profitability and viability of these facilities restricting any further investment in the development of additional facilities. The current resource constraints and the non-availability of additional funds make it unlikely that there is any room for any diversification that can occur in this area that would be available to support the export strategies identified.

2.3 Maintenance costs Maintenance of technology is, to a great extent, solely dependent on overseas suppliers. Given the high dependency of health care services on quality reliable utility services, they are heavily impacted on by the monopolistic behaviour of providers and the excessive costs of supply. Support and servicing of advanced technology is difficult and expensive due to the geographic dislocation from the suppliers. Equally, freight costs and the unfavourable exchange rates impact significantly on the purchase and operational costs of advanced technology.

123 2.4 Tax incentives for investors The Government has recently included the development of new private hospitals under its tax exemption incentive scheme. This would need to be considered.

2.5 Legislative Support There needs to be a more sustained commitment to the development of the legislative aspects of the health sector. This needs to encompass the development of suitable legislation to underpin the health services and to enforce regulations including licensing and accreditation requirements. The current legislation is out of date and inadequate. This legislative review would also need to encompass the role of the Public Service Commission (PSC) in the employment and management of health staff in the Public Health system.

124 Organization Implementation Tourism Tourism Board Private FHA, operators, and health providers, Resorts, MTT Implementation Organization PSC, MH, FMA, Office SG’s

Necessary Resources Necessary Resources support for tourism in Fiji Attractive price of package Suitably trained providers Suitable facility Engagement and discussions with tourism industry regarding Employment policies Legislative review of PSC plan MH Workforce • • • • • • ACTION PLAN HEALTH SERVICES HEALTH Review of PSC employment professional of emigration Reduce policies to be finalized by 2008 staff by 50% in the next 5 years staff Key performance Indicator Key performance Indicator Policy to be drawn up by 2007 to be completed by year 2008 be made available by 2009 Negotiation process on tourism levy Packages relative to competitors to services health local of utilization Full from tourism operators by 2011. • • • • • • 2 to ensure that training of Doctors and Nurses are aligned with the requirements Strategy Strategy ‘Workforce Plan’ ‘Workforce Plan’ directed to health services providers treatment / resort stay package Booking / Payment pick up etc. – made easy systems relevant bodies e.g. MH, Public Hospital etc. Negotiate a levy from tourism earnings to be Built in with resort stay – cost effective Review of PSC employment policies (Review of work and private and public both in work to professionals pay conditions) eg. Allow Devolve employment of professionals to • • • • • MOH will review the Draft Bill are in preparation to reform Fiji Drug Law; (Refer Douglas Pharmaceuticals recommendation CSI) Objective 1 - Establish strong support for health providers by tourism sector Objective 2 – Retention of professional staff. 2 the health system 3

125 Organization Organization Implementation Implementation MH, Private investors FTIB MFNP, Office, SG’s FSM, FSN, FAB, PSC FSM, FSN, FAB, Qualification authorities, FMA, Unions, MH system Legislation private sector investment $3m increase Government increase $3m public for allocation budget Enabling environment for Necessary Resources Necessary Resources Qualifications authorities. medical licensuring Policy Partnership overseas institutions and with Independent body for allocation by $3m annually Increase scholarship • • • • • • • Key performance Indicator Key performance Indicator by $3m to cater for maintenance finalized by 2007 Increase in annual Budget allocation Negotiation with MH and MFNP on fees and levies record keeping to be 10% increase in investment annually. private sector be completed by 2009 Standardisation or implementation of Licensuring and accreditation review to overseas training standards by 2010. from 70-100 students per year FSN by 50 per year Increase FSM intake for MBBS studies Increase intake for nursing studies at • • • • • • • Strategy Strategy overseas standards licensing process maintenance consolidated accounts Investment in infrastructure Implement overseas standards of training/ standardization of training to match process accreditation and licensure Revise and system – independent body to look at Increase budget allocation for upgrading/ Diversion of funds from and levies services – not fees to be recorded in the Investment in suitable private technology and facilities, services- resourcing and courses Investment in educational facilities and • • • • • • Objective 3 - Training of suitable health professionals to international standards especially specialists Objective 3 - Training Objective 4 – Develop suitable facilities and infrastructure

126 Organization Organization Organization Implementation Implementation Implementation MH, Private heath providers, heath Private MH, Private investors, Fiji Kava Council; FTIB, Private MFAET investors, Manufacturers, FIRCA Exporters Club SG’s office, Pharmaceutical office, SG’s reduction health providers Joint foreign with negotiations ventures Legislation Negotiation on tariff Necessary Resources Necessary Resources Necessary Resources and public sectors Investment in both private • • • . Review to be finalized by 2007 within the next 5-8 years. Tariff review by 2007 Tariff ventures joint 2 least at Establish Key performance Indicator Key performance Indicator doubled in the next 10 years in the next 5-8 years. Number employed in sector to be Investments to increase by 25% Key performance Indicator • • • • • 3 ) Strategy Strategy Strategy to reduce cost of production ventures with overseas health providers Increase in extent of service delivery production Review legislation to support manufacture support to legislation Review products. pharmaceuticals of exports and Act” (“Fiji Pharmacy and Poisons Reduce tariffs on imported raw material /joint alliances strategic of Establishment e.g. operations fields green in Investment pharmaceutical & health supplements • • • • • Objective 5 - Create the enabling environment for pharmaceuticals industry Objective 6 – Ensure financial viability for private health providers Objective 7 – Increase employment opportunities

127 EDUCATION AND TRAINING

Vision: To Become the Hub of Education and Training Excellence in the South Pacific

1.0 Overview

1.1 Education and training is a ‘prerequisite’ and necessary condition for sustainable economic growth and prosperity. A well-trained labour force will support the country’s efforts to build and strengthen Fiji’s human resource capacity. The sector is identified as critical in enhancing the level of productivity for other sectors through training.

1.2 Local training providers also, to some degree, participate in training activities abroad. One such institution providing this service is the Training & Productivity Authority of Fiji (TPAF). There is potential to increase the number of education and training service providers to the region.

1.3 In terms of the provision of education and training locally, the major challenge is the recognition of qualifications gained locally by the leading institutions in Australia and New Zealand. Full recognition of qualifications will attract foreign students, particularly from Asia, choose Fiji as their preferred location to obtain education and training.

1.4 Whilst Teaching English as a Second Language (TESL) is currently being offered, foreign students could be drawn to other areas of study if accreditation to leading institutions is gained. 2.0 Strategic Issues

2.1 Accreditation and Recognition of Qualifications Gained/Obtained To have a marketable workforce, the qualifications gained locally must be recognised in other countries. Currently, most of the local tertiary institutions are not accredited to regional institutions and as a result, most of the qualifications gained locally, are not fully recognised internationally. It is also important to provide education and training in accordance with Australian and New Zealand standards to improve recognition of our courses and qualifications.

128 3.0 Facilitating Role

3.1 Education and training is critical in enhancing the level of productivity and has also been given importance in encouraging trade support network.

3.2 Education and training will play a facilitating role and support the needs of other sectors’ human resource requirements.

129 MFAET – for MFAET All institutions providing education and training MEYS bilateral talks and lobbying for full recognition of qualifications gained Organisation Organisation TPAF Implementation Implementation

• • • • Necessary Resources Necessary Resources Institutional strengthening Ministry of by Education, Youth & assistance government Continued through grants and subsidies to schools and tertiary institutions Sports – ongoing – ongoing TPAF personnel TPAF

• • • ACTION PLAN EDUCATION AND TRAINING EDUCATION programmes designed delivered to other sectors Number of programmes Number of specific training Key Performance Indicator Level of recognition of qualifications and accreditation – institutions Key Performance Indicator

•

• • Strategy Strategy Provision of training in export related export in training of Provision standards and/or joint venture arrangements areas Curriculum and training to be in line with Australian and New Zealand Provision of education and training in collaboration with Australian and partnership institutions; Zealand New

• • • Objective 1: To gain the necessary accreditation for full recognition of qualifications gained, in region Objective 1: To Objective 2: To Enhance Export Capacity of Other Sectors Objective 2: To

130 LABOUR MOBILITY

Vision:

To Become a Major Foreign Exchange Earner

1.0 Overview

1.1 Labour mobility has become a major source of foreign exchange. From its low ebb in the late 80s from approximately $50m annually, it has risen to over $350m in 2005. It is estimated that it will surpass $450m by the end of 2006. The main areas where labour mobility is most vibrant are seasonal employment, nursing/ care giving, peacekeeping, and private security.

2.0 Seasonal Employment

2.1 The focus has been on the export of unskilled workers who are willing to supply their services in the areas of horticulture, particularly in the Australian and New Zealand markets. A bilateral scheme between Fiji and New Zealand existed between early 1960s and 1987, which was suspended as a result of the events of 1987.

2.2 Fiji’s main competitors are other Pacific Islanders and the holidaymakers from Europe and North America who opt for similar jobs in Australia and New Zealand. Fiji nationals are more competitive than other Pacific Islanders and the holidaymakers from Europe and North America due to continuity of services provided and also the reputation gained. There is a ready supply of unskilled labour in Fiji which could be provided with employment, in turn leading to poverty alleviation and contribute towards development of disadvantaged regions. The extent of the spill-overs will depend on the way the scheme is administered.

2.3 A possibility also encompasses the creation of “twin villages” or schemes along such principles. For instance, a village in Fiji could be twinned with a farm in Australia. Only individuals from this particular village would be able to apply for the scheme through this arrangement. People from this particular village would only be allowed to go back for the next season if all the workers in the previous season returned to Fiji. Convivial relations between the hosts in Australia and the workers would need to be ensured as well.

131 2.4 A major issue concerning seasonal employment is overstaying. There is a fear that unskilled labourers would explore ways of staying behind in Australia after their contracts, in quest for a better standard of living and opportunities. At present, the agriculture sector is heavily reliant on documented and undocumented workers to meet seasonal labour market needs. The undocumented workers comprise of unauthorised residents from Pacific Island Countries, and Asia (predominantly China), overseas students working in excess of permitted hours, foreign travellers without work permits and Australians working while receiving benefits. Therefore, establishing the work schemes with appropriate incentives not to overstay will assist in getting rid of the irregularities prevalent within the current arrangements.

2.5 Another concern is that of “black birding”. This is fundamentally different as the workers in Fiji are willing to venture out to Australia to work. It is acknowledged that fruit picking skills may not necessarily be transferable but this is not the aim of this scheme and there are technical and vocational schemes to address skill needs. The work schemes will be mutually beneficial to Australian farm owners and to Fiji nationals.

3.0 Nursing/Caregiving

3.1 There is a shortage of nurses and this has put a considerable amount of strain on the effective delivery of health services.

3.2 Fiji loses many nurses every year to countries such as Australia, New Zealand, the United States of America (USA), and United Kingdom (UK). In most cases, the migrants tend to be the most experienced ones. This is to be expected, as recruiting agencies need to match the skills of the local nurses with those required in the international market where health care services tend to be of higher standards.

3.3 The methods of recruiting nurses for the overseas market include recruiting agencies visiting Fiji, through the internet, and local agencies recruiting on behalf of overseas agencies. It is known that there are several circumstances where nurses have been exploited. For instance, contracts are not sighted even when they can be completely valid in the host jurisdiction, where agents collect deposits and disappear, and details of conditions, accommodation, and cost sharing are ambiguous.

3.4 There are many instances of experienced nurses from Fiji working as caregivers in other countries. In Australia, for example, this situation of ‘under-employment’

132 arises because the nurses do not have the standards and certificates required to work as a fully qualified nurse (recognition of qualifications).

3.5 On the training aspect, the Fiji School of Nursing (FSN) receives around 2000 applications for only 120-140 places every year. Most meet the entry requirements, however, due to limited places being available, not all the candidates are selected.

4.0 Peacekeeping

4.1 Fiji is directly involved in peacekeeping duties through the United Nations Department for Peace Keeping Operations (UNDPKO) which involves the Fiji Police Force and the Republic of Fiji Military Forces. The current policy stipulates that, at any point in time, no more than 100 peacekeepers can be deployed for peacekeeping duties to ensure that law and order in Fiji is not compromised. The peacekeepers from Fiji are highly regarded internationally for their outstanding performance.

4.2 The deployment for peacekeeping duties is based on the demands made by UNDPKO; bilateral pathways for training and equipment will have to be considered as well.

4.3 It is imperative for Fiji to increase its workforce if there is an intention to increase the number of workers in the peacekeeping forces. In light of the current world events, it is anticipated that there will be a sustained demand for peacekeepers. The framework for this industry is regulated by UNDPKO guidelines. Institutional strengthening may be needed should operations be increased by these needs.

5.0 Private Security

5.1 Security workers are recruited by six companies locally to work mainly in Iraq, Afghanistan and other Middle-Eastern countries. The function of the workers is to provide personal security services to individuals who are involved in reconstructing Iraq and other Middle-East Countries.

5.2 The companies only allow those who have received formal training and experience in the army to apply for such postings. The applicants are mainly ex-servicemen. There is a growing demand for security workers. However, this depends on the recruiting agencies winning the contracts, which, in turn, sub-contract local companies to recruit prospective workers locally.

133 6.0 Strategic Issues

6.1 To Enhance Labour Mobility

6.2 To enhance the mobility of labour, it is important to address the issues of market access, capacity diversification, and human resource and capacity development. Market access needs to be negotiated at a bilateral level but the reservations of host countries will have to be adequately addressed. With regard to nursing, full recognition of the qualifications must be pursued.

6.3 Capacity diversification involves unskilled workers (seasonal employment) being employed in the agricultural sector in general, hauling sector or any similar sector experiencing a shortfall in labour in the host countries. With regard to peacekeeping, some of the capacity diversification areas include, handling humanitarian crises, tactical response, disaster response skills, intelligence evaluation/management, and trauma counselling.

6.4 It is also necessary to enhance the levels of human resource and capacity development in order to increase the marketability of the labour force in the international market. With regard to nursing, the training capacity of FSN needs to be expanded and/or outsourcing should be considered for the training of more nurses. This will make nursing courses more competitive as well as marketable (since the curriculum would be updated).

7.0 Regulation and Credibility Checks

7.1 The Labour Department needs to strengthen the policy and regulatory framework to regulate the recruitment activities. This will ensure that individuals working abroad are not exploited. There have been instances of companies/individuals making promises and receiving advances. The Labour Department shall also provide advisory services (e.g. sighting of contracts, explaining terms and conditions) to prospective workers and will be the focal point for complaints.

7.2 Due diligence on recruiting companies from overseas must be ensured at all times. Amongst those involved in the industry, there is a concern that unless there are regulation and credibility checks, there is a possibility of unscrupulous recruiters training terrorists, locally.

134 8.0 Minimising the Social Impacts of Labour Mobility

8.1 Church leaders have raised their concern over the social problems associated with long-term absence. Community leaders are concerned about the implications on gender roles given the absence of men for a prolonged period of time.

8.2 The social impacts need to be mitigated and this requires counselling facilities for workers prior to their deployment and upon return. The families of the workers also require access to these facilities together with family support.

9.0 Increasing the Intake of Trainee Nurses

9.1 To increase the intake of trainee nurses, the current infrastructure needs to be upgraded so that more students can be catered for and trained.

9.2 Another way forward could be to outsource the training of nurses to an institution like the Fiji Institute of Technology (FIT), which is also considering building its own School of Medicine and Nursing. If the operations of FSN are handed over to FIT, government will not have to train nurses itself but probably provide incentives such as scholarships and bonding them so that the nurses, upon graduating, serve the nation for a number of years before they can migrate (if they wish to).

9.3 The training curriculum at FIT will be in line with Australian and/or New Zealand standards in order to increase the attractiveness of its courses, thereby increasing the marketability of the graduating nurses.

135 Organisation MLIR institutions All and education training MFAET Implementation

• • • Necessary Resources multilateral agreements accreditation to achieve the necessary Negotiation of bilateral and programmes Training Negotiation and lobbying

• • • ACTION PLAN LABOUR MOBILITY Key performance Indicator – ongoing engagements countries – ongoing Number of multilateral agreements reached bilateral and/or Diversity of The overseas level qualifications of attained, in other recognition of

• • • Strategy Peacekeeping Missions Capacity Development Bilateral countries other and/or with agreements multilateral Access – Market Lobbying contracts for international such Continuous as training, capacity building, UN and “up-skilling” the of labour force Diversification – Capacity Improved of education programmes; example, and (for expansion institutions training accreditation training of FSN) – Human Resource and

• • • • Objective 1: To Enhance the Mobility of Labour Objective 1: To

136

MFAET FHRC FWCC MWSWH MLIR MFAET Office SG’s Organisation Organisation

Implementation Implementation • • • • • • • Awareness campaigns Awareness Necessary legislation/ programmes’ regulations private requiring companies provide ‘rehabilitation security to “recruitees” awareness Mechanism Alternative Resolution Dispute (ADR) Register of recruiters and recruiters of Register Education and Necessary Resources Necessary Resources

• • • • • Key performance Indicator Key performance Indicator Number of individuals making use of Number of ‘rehabilitation personnel programmes’ return (to be initiated by the security upon entering the counselling facilities companies) Industrial Relations – on-going signed contract Number of recruiters and “recruitees” and recruiters of Number registered by Ministry of Labour & Number of collective Number contracts of contracts completed after enforcement – level successfully involved, parties the of satisfaction of and understanding level of the

• • • • • Strategy Strategy All recruiters and “recruitees” need to be registered with Ministry of Labour Contracts to be negotiated between & Industrial Relations parties Contract enforcement to and upon return from deployment families social life in Fiji again. a ‘rehabilitation programme’ return that upon is carefully designed enable to them to integrate into the Counselling facilities for workers prior workers for facilities Counselling Counselling facilities for the workers’ Private Security – personnel to enter

• • • • • • Objective 2: Regulation and Credibility Checks to Prevent and/or Minimise Exploitation/ Poaching of Minimise the Social Impacts of Labour Mobility Objective 3: To labour

137 Organisation MCHS FIT MLIR Implementation

• • • Necessary Resources by FSN – ongoing necessities of training capacity at FSN – budget request to be made Budget National the in FSN to FSN to FIT guidelines, – agreement, of curricula and updating other Infrastructure for expansion higher A budgetary allocation The official handing over of

• • • Key performance Indicator trainee nurses at FSN through FIT The level of increased intakes of Number of nurses graduating

• • Strategy training capacity of FSN to FIT Expand and/or increase the Outsource the training of nurses

• • Objective 4: To Increase the Intake of Trainee Nurses Increase the Intake of Trainee Objective 4: To

138 CHAPTER 7 STRATEGY MANAGEMENT

1.0 Introduction

1.1 Successful implementation of all strategies identified in Chapter 6 depends very much on how this is managed and monitored. The commitment of all stakeholders is necessary, particularly that of the responsible executing agencies in prioritizing their respective strategies in the budget. One of the major reasons for the unsuccessful implementation of good policy initiatives is the lack of resources, management capacity and monitoring systems.

1.2 This chapter seeks to identify the least costly, but most effective mechanism to implement the export strategy. It is imperative that an assessment of the existing machinery be conducted before considering other available options. 2.0 Existing Government Machinery

2.1 The primary focus for implementing the National Export Strategy lies within the existing delivery mechanism, through the appropriate ministries and agencies and other levels of support. The scope of the Strategy is very broad. It interconnects with Government policies on international trade, agriculture, competition, exchange control, foreign direct investment, infrastructure, information technology, finance, services and incentives. Central agencies and line ministries are allocated necessary resources to implement specific Government policies. There are three general categories for the ministries and agencies. These are:

(i) Central agencies: Aid coordination is the responsibility of three central Government agencies. These are the Ministry of Foreign Affairs & External Trade, the Ministry of Finance and National Planning and the Public Service Commission.

(ii) Policy implementation agencies: These are the line ministries and agencies responsible for implementing sector policies in education, agriculture, tourism, fisheries & forests, public enterprises and public sector reforms, commerce and business, public utilities, the financial system, revenue collection and border management.

139 (iii) Promotional Agencies: Three agencies are involved in promoting Fiji products and services. They are the Fiji Islands Trade & Investment Bureau (FTIB), the Fiji Audio Visual Commission (FAVC); and the Fiji Visitors Bureau (FVB). They are supported by Trade Commissions in Los Angeles, Taipei and Sydney.

2.2 In developing policies, line ministries initiate the formulation of policy papers and project proposals for submission to the Ministry of Finance & National Planning. The office works closely with all line ministries, and may itself initiate development policy papers. Policy and project proposals are scrutinized through several channels of Government decision-making machinery, the first of which is the Development Sub-Committee (DSC). This is a committee of Chief Executive Officers of the line ministries. The DSC is chaired by the Chief Executive Officer of the Ministry of Finance & Nationa Planning, and meets fortnightly to discuss development policy papers. Further refinements are conducted by Cabinet Sub-Committees before submission to Cabinet.

2.3 An aspect of the decision-making machinery relevant here relates to implementation arrangements for the Strategic Development Plan (SDP). The SDP is monitored by the National Economic Development Council (NEDC). The NEDC is made up of Ministers, and is chaired by the Minister for Finance and National Planning. Nine Summit Working Groups (SWGs) meet on a quarterly basis to review the implementation of the SDP. Their members include representatives of the private sector, civil society and trade unions.

Figure 3: Framework of Summit Working Group

Key:

SWG N = Summit Working Groups (9) NPO = National Planning Office NEDC = National Economic Development Council

140 3.0 Private Sector-led Machinery

3.1 The Exporters Club, a private sector organization, was established primarily to administer the Duty Suspension Scheme (DSS). The DSS enables exporters to access inputs without paying duties upfront. The shareholders of the Exporters Club include the Fiji/Australia Business Council, the Fiji/NZ Business Council, the Fiji Employers Federation, the Fiji Chamber of Commerce and Industry, the Fiji/PNG Business Council, the Fiji Indigenous Business Council, the Fiji/USA Business Council and the Textile, Clothing and Footwear Council. FIRCA sits on the board as an ex-officio member. Government subsidizes the operations of the Exporters Club through an annual grant of $35,000, with the balance paid by members through a levy of 0.1% of exports.

3.2 The business councils were established to encourage business and trade relations between Fiji and major trading partners, Australia, NZ, USA, PNG and USA. The membership of these business councils includes Fiji companies and businesses that export to these major markets.

4.0 A new Exporters Council

4.1 Another option for implementing the export strategy would be to set up a dedicated Exporters Council (EC). The Council would be created under an enabling legislation through the Ministry of Commerce and Industry. It would consist of private sector representatives with the appropriate Government ministries included as ex-officio members. Financial and administrative support would be provided by the Ministry of Commerce and Industry. The Council would meet to monitor the progress of the export strategy twice a year.

5.0 An assessment of the Monitoring Mechanisms

5.1 There is much to be said for the existing decision-making machinery within Government as the body responsible. Its people are regularly briefed on national policy developments and initiatives, and collective decisions taken are based on sound analysis and carefully weighed options. The existing state machinery also maintains cooperation and proper coordination among Government ministries and agencies, and offers professional technical resources. Transparency is

141 assured through the active and involved participation of the private sector and non-Government organizations. The National Export Strategy can be included as a new chapter in the SDP, which would include the setting up of a new Summit Working Group to monitor the strategy. Additionally, the Ministry of Commerce and Industry could provide secretariat support to the National Planning Office to service the activities of the new SWG. Against all this are the challenges faced by Government machinery due to competing priorities, the cross cutting nature of issues, the reduction in Government spending, the overlapping or duplication of work and resource constraints.

5.2 Although the Exporters Club is widely represented throughout the private sector, there are limitations on its permitted activities (as outlined in the Customs Amendment Act 2002). The mandate of the Exporters Club would need to be expanded to allow it to implement the export strategy, fulfil an advisory role on Government policies and programmes that affect Fiji’s trade performance and expansion, and act as a forum for discussion on trade related problems. Other considerations include the absence of Government representation and lack of support for the expansion of the organization’s activities.

5.3 The Exporters Council would provide a good mix in terms of public and private sector representation. However, there are certain challenges on resources and the cross cutting nature of the issues which may overlap and duplicate the work of line ministries, agencies and business councils. While the Exporters Council could no doubt effectively implement the export strategy, the notion of it as a ‘one stop shop’ could create confusion within the export community. The concept failed to work for FTIB because the Bureau was not empowered to formulate and implement policies and legislation. There would be similar, or greater, difficulties in delegating such authority to the Exporters Council.

6.0 Review of the Strategy

6.1 To assess its effectiveness in detail, it is vital that a review of the export strategy be undertaken two years after its implementation. Following that review, all elements successfully implemented will be checked off. In the case of those presenting problems, the necessary corrective measures will be applied. Revised and additional strategies to address new challenges in a changing environment will also be discussed in the review. The review process would be repeated on an ongoing basis every two years.

142 7.0 The Way Forward

7.1 In determining the appropriate delivery mechanism for Fiji’s National Export Strategy, Government is mindful of, the need to reduce spending, the pressures on its resources, and the overlapping of activities. Consultations were conducted on implementation arrangements at the National Export Strategy Symposium in August 2006. Consequently, a new Summit Working Group will be established to monitor the implementation of the National Export Strategy, with secretariat support provided by the Ministry of Commerce and Industry. A medium term review would be carried out into 2009 to establish the effectiveness and assess the arrangements and resource requirements of the National Export Strategy.

7.2 In the longer term, an Exporters Council will be established and provided the ppropriate resources to implement and monitor the National Export Strategy, with coordination conducted by the Ministry of Commerce and Industry. It is anticipated that the Council will meet bi-annually to discuss the implementation of the export strategy.

143 CHAPTER 8 RESOURCE MOBILISATION 1.0 Introduction

1.1 Successful implementation of the export strategy, and its future performance, depends to a high degree on the availability of necessary resources, as well as the support of an effective monitoring mechanism. The availability of resources must therefore be given serious early consideration.

1.2 Resource mobilisation involves not only financial resources provided by Government, but human, and other resources, that could be made available by development partners and the private sector.

1.3 With regard to financial resources, a clear road map, proper sequencing, and the prioritization of the strategies to be implemented are equally important. Specific and unique action plans are necessary for all sectors, goods and services.

1.4 Human resource needs will very much depend on requirements identified in each of the strategies. While specialised expertise will be inevitable in certain areas, some tasks will be more generic in nature, and can be carried out during day-to- day operations of responsible agencies.

1.5 A coordinated approach making maximum use of all available resources from all stakeholders, must be encouraged.

1.6 Resources provided through development partners will take many forms, and will come through either bilateral or multilateral arrangements. Assistance via a bilateral arrangement could be in kind, or a cash grant. Multilateral arrangements could provide technical assistance (TA), for example, or a soft loan.

1.7 The effectiveness of development assistance must be determined by the providers, based on comparative advantage and their respective priorities.

1.8 One of the identified major challenges is the capacity of Government to implement some policy initiatives. It is necessary, therefore, that resources from donors be directed to capacity building through training attachments, and making available expertise in problem areas identified.

144 1.9 To achieve our capacity building targets, central agencies must encourage bilateral donor agencies to focus their assistance on areas relating to capacity building. Soft loans and TA through multilateral agencies must be carefully utilised to achieve a maximum return on investment.

2.0 Funding Through the National Budget:

2.1 Although the country’s budgeting system is moving towards being output based, the allocation of resources is still based on programme budgeting, whereby funds are input based and directed to executing agencies through their respective identified programmes.

2.2 Because there is a high degree of overlapping of activities within and among different programmes, it can be very difficult to clearly identify an output with a defined input. Despite this, every effort will be made to match all resources contributed with a specific action plan.

2.3 Since most of the strategies are consistent with those of the Strategic Development Plan, it might be assumed that financial resources will be provided through the normal budgetary process. However, for those priorities not covered under the annual budget allocation, due consideration must be given to prioritising implementation from the responsible agency through a request for additional funding.

3.0 Funding Through Development Partners

3.1 As indicated earlier, cash grants and aid in kind are provided through bilateral and multilateral arrangements. Although the amount is marginal in terms of its percentage to GDP (2%), compared to other countries in the region its developmental impact is quite substantial.

3.2 The bulk of development assistance from bilateral donors is closely governed by their specific foreign aid policies. Most of the assistance provided by Australia and New Zealand (Fiji’s major bilateral donors), is targeted at poverty alleviation and capacity building, to support the restructure of the economy. The assistance is targeted specifically at sectors where they perceive it will have the greatest impact.

145 3.3 Assistance provided by the Japanese, and other bilateral donors, is on an ad-hoc basis. In most cases, it focuses on major development infrastructure.

3.4 On multilateral arrangements, the EU provides assistance through well-targeted sectors pre-determined under EDF 6. Borrowings from multilateral financial institutions are targeted at major national infrastructure development.

3.5 The table below provides details of assistance through bilateral arrangements from our major donor countries since 1999. Assistance from each donor is targeted to a specific area, based on its aid policy, and harmonised with Fiji Government priorities.

Table 6 - Aid from Development Partners, 1999 - 2006

Donor 1999 2000 2001 2002 2003 2004 2005 2006 Actual Actual Actual Actual Actual Actual Prov Budget $m $m $m $m $m $m $m $m Australia 11.40 4.00 4.56 6.80 12.50 12.50 16.90 21.73 Canada 0.00 0.25 0.28 0.25 0.04 0.04 0.27 0.00 China 17.50 2.75 6.25 2.75 0.00 0.00 0.30 10.65 EU 2.30 2.20 3.31 12.84 22.20 22.20 27.82 15.24 France 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Japan 1.10 3.20 4.00 4.80 8.20 8.20 0.75 0.00 Korea 0.00 0.06 0.20 0.20 0.00 0.00 0.00 0.00 New Zealand 2.60 0.09 0.62 0.86 0.40 0.40 1.90 9.55 UNDP 0.10 0.25 2.12 0.25 0.01 0.01 0.10 0.69 Others 0.30 0.80 0.80 1.60 2.59 2.59 2.40 2.12 Total 35.30 13.60 22.14 30.35 45.94 45.94 50.44 59.97 Comprising Cash 1.70 1.10 0.46 0.27 1.97 3.40 4.38 9.67 Aid in Kind 33.60 12.50 21.68 30.08 43.97 42.54 46.06 50.30

Source: MFNP 4.0 Private Sector Funding

4.1 It is very difficult to determine the level of funding that will be directly injected by the private sector into implementing each action plan. Private sector funding will be based on individual initiative, and targeted at making a return on investment. Government will therefore continue to provide the necessary resources to foster the enabling environment for members of the private sector to invest in their own areas of priority.

146 5.0 Quantum of Funding

5.1 The actual quantum of funding required is also very difficult to assess. Most will be provided through the budget to the respective implementing agency.

5.2 Availability of funding to implement strategies will very much depend on priorities given by the executing agencies, based on their annual corporate plans.

5.3 At the operational level, the implementation of strategies will either be undertaken within the existing budgetary provision, or additional resources will be requested.

5.4 On all major capital expenditures, each of the executing agencies is required to submit a request through the Public Sector Investment Programme, currently coordinated by the National Planning Office.

5.5 Funding for implementation of the export strategies should not be looked at in isolation, but considered along with the priorities outlined in the Strategic Development Plan for 2007 – 2011.

5.6 Generally, most of the export strategies have very strong links to policies for achieving sustainable economic growth and prosperity. The strategies are also aligned to the public sector reforms programme currently being implemented through Public Service, Public Enterprise and Financial Management Reforms.

5.7 Although some strategies have indicative figures, these have to be finalised by the executing agency.

6.0 Classification of Resource Required

6.1 In order to appreciate the level of funding required for the successful implementation of all the export strategies in the document, effort has been made to group them into four broad categories: financial, institutional, human resource, and export specific.

6.2 In the case of financial resources, this could be provided through the budget, by the private sector, and possibly by development partners.

6.3 Financial resources will be specifically targeted to programmes or activities earmarked for implementation by executing agencies.

147 6.4 Projects involving institutional assets will involve the re-engineering or restructuring of existing institutions in order to implement some of the strategies effectively. This will involve policy reorientation and/or re-prioritisation.

6.5 With regard to human resource development, the emphasis is to build up existing capacity to a strength capable of implementing strategies effectively.

6.6 Export specific programmes will involve issues such as incentives relating to export finance, and changes to be made to the fiscal regime.

Annex 6 is the summary of Classification of resource required.

148 Annex 1

NATIONAL EXPORT STRATEGY DESIGN TEAM

National Core Team

Mr. Isireli Koyamaibole (Chair) Ministry of Commerce & Industry Mr. Grahame Thorpe Balthan International (Fiji) Ltd Mr. Sam Foy Waisali Farm Produce Ms. Jan Partridge Modern Furniture Dr. Jonacani Tuisuva Fiji Mahogany Trust Ms. Luisa Tamanilo Fiji Investment Corporation Ltd Mr. Humphrey Chang Fiji Chamber of Commerce & Industry Mr. Chandar Yenkanna Exporters Club Mr. Joe Singh Fiji Islands Trade & Investment Bureau Ms. Lailun Khan Fiji Islands Trade & Investment Bureau Mr. Sunia Baikeirewa Fiji Islands Trade & Investment Bureau Mr. Filimone Waqabaca Reserve Bank of Fiji Mr. Ken Roberts Fiji Employers Federation Mr. Des Whiteside Fiji Manufacturers Association Mr. Jone Usamate Training & Productivity Authority of Fiji Prof. Jeffrey Born University of the South Pacific Mr. Edrian Hazelman Fiji Hardwood Corporation Ltd Mr. Mike Terry Williams & Goslings Dr. Tim Smart Suva Private Hospital Mr. Viliame Savou Fiji Sugar Marketing Co. Ltd Mr. Mark Halabe Mark One Apparel Mr. Esaroma Ledua Waikava Marine Industries Ltd Mr. Apolosi Kaloumaira ITS (Fiji) Ltd Mr. Ian Lincolne Natural Waters of Viti Ltd Mr. Joe Kanaenabogi Fiji Indigenous Business Council Mr. Joe Taoi Fiji Indigenous Business Council Ms. Florence Swamy Fiji Audio-Visual Commission Ms. Saipora Mataikabara Prime Ministerʼs Office Mr. Isikeli Mataitoga Ministry of Foreign Affairs & External Trade Mr. Jone Draunimasi Ministry of Foreign Affairs & External Trade Ms. Anju Keetharuth Ministry of Foreign Affairs & External Trade Mr. Peni Sikivou Ministry of Finance & National Planning Mr. Pita Wise Ministry of Commerce & Industry Ms. Sovaia Marawa Ministry of Commerce & Industry Ms. Mereseini Waibuta Ministry of Commerce & Industry Mr. Sekove Tamanitoakula Ministry of Commerce & Industry Ms. Shabana Bashir Ministry of Commerce & Industry

149 Mr. Azeem Khan Ministry of Commerce & Industry Mr. Navitalai Tuivuniwai Ministry of Commerce & Industry Mr. Paula Cirikiyasawa (National Navigator) Ministry of Commerce & Industry

Technical Experts Mr. Brian Barclay International Trade Centre, Geneva Mr. Isaac Njoroge Commonwealth Secretariat

Sugar Mr. Viliame Savou (Navigator) Fiji Sugar Marketing Co. Ltd Mr. Jagannath Sami Sugar Cane Growers Council Mr. Deo Saran Fiji Sugar Corporation Mr. Daya Ram Sugar Commission of Fiji Mr. Mohammed Habib Sugar Commission of Fiji

Agro-Business Mr. Grahame Thorpe (Navigator) Balthan International (Fiji) Ltd Mr. Sam Foy Waisali Farm Produce Mr. Epi Tulele Fiji Agro-Marketing Mr. Humphrey Chang Fiji Islands Chamber of Commerce & Industry Mr. Sunia Baikeirewa Fiji Islands Trade & Investment Bureau Mr. Luke Ratuvuki Ministry of Agriculture Mr. Paula Waqainabete Ministry of Agriculture

Marine Product Mr. Esaroma Ledua (Navigator) Waikava Marine Industries Ltd Mr. Grahame Southwick Fiji Fish Marketing ltd Mr. David Lucas Solander (Pacific) Ltd Mr. X. J. Du Golden Ocean Mr. Tai Hancock Ocean 2000 Mr. Justin Hunter Taylor Shellfish (Fiji) Ltd Mr. Toru Nakano Tosa Bussan (Fiji) Ltd Mr. Walt Smith Walt Smith International (Fiji) Ltd Mr. Peni Kunatuba Weiya (Fiji) Ltd Mr. Lote Rasiga Rel Fisheries Ltd Ms. Una Kolitagane Blue & Green Marine Ltd Mr. Josateki Tagi Fiji Islands Maritime & Safety Administration Ms. Lavinia Kaumaitotoya Fiji Ports Corporation Ltd Mr. S. Tuilaucala Ministry of Fisheries & Forests Ms. Alice Leewai Ministry of Fisheries & Forests

150 Forestry

Ms. Jan Partridge (Navigator) Modern Furniture Mr. Truman Bradley Modern Furniture Mr. Michael Geitz Mahogany Industries Dr. Jonacani Tuisuva Fiji Mahogany Trust Mr. Edrian Hazelman Fiji Hardwood Corporation Ltd Mr. Paul Evers Future Forests (Fiji) Limited Mr. Sairusi Bulai Secretariat of the Pacific Community Mr. Colin Marly Sustainable Forest Industries Ms. Susana Tuisese Ministry of Fisheries & Forests Mr. Samuela Lagataki Ministry of Fisheries & Forests Mr. Jared Morris Pacific Islands Forum Secretariat Mr. George Vuki Fiji Pine Limited Mr. Esaka Nakalevu Fiji Pine Trust

Garments Mr. Mark Halabe (Navigator) Mark One Apparel Mr. Ben Ralogaivau Lyndhurst Fiji Mr. Nilesh Jamnadas Danam Mr. Kalpesh Solanki Ranjit Garments

Mineral Water Mr. Warwick Pleass (Navigator) Pleass Beverage & Packaging Mr. Ian Lincolne Natural Waters of Viti Ltd Dr. Peter Mario Unit Trust of Fiji Mr. Jay Dayal Island Chill Fiji Ltd Mr. Mala Finau Mineral Resources Department Mr. A. Vadei Department of Fair Trading & Consumer Affairs Ms. Seema Sharma Department of Fair Trading & Consumer Affairs Tourism Mr Dan Costello Snr (Navigator) Beachcomber Cruises & Resorts Mr. Andrew Brown Beachhouse Mr. Anasa Leiwere Heavens Edge Ms. Angela Ricketts Marriott Corp (Momi Bay) Ms. Anne Wade Hideaway Fiji Resort Ms. Leba Pareti Nomads Skylodge Mr. Vili Koyamaibole Tourism Consultant Mr. Mereani Korovavala Fiji Islands Hotel & Tourism Association Adi Banuve Kaumaitotoya Ministry of Tourism Ms. Paulini Tokaduadua Ministry of Tourism

151 ICT Mr. Apolosi Kaloumaira (Navigator) ITS Services (Fiji) Ltd Mr. Semi Tukana Software Factory Ltd Ms. Luisa Tamanilo Fiji Investment Corporation Ltd Mr. Rejeev Gandhi Fiji Investment Corporation Ltd Mr. Johnson Gani Affiliated Computer Services (Fiji) Ltd Mr. Jim Tora Affiliated Computer Services (Fiji) Ltd Mr. Darryl Duke Stepstone Pacific Ltd Mr. Sachin Avikash Training & Productivity Authority of Fiji Ms. Bridget Johnson Quest Mr. Eremasi Tamanisau Sentinez Communications Mr. Anthony Ah Koy Datec (Fiji) Ltd Mr. Akuila Yabaki Datec (Fiji) Ltd Mr. Ateen Kumar Vodafone (Fiji) Ltd Mr. Joe Turaganivalu Department of Communications Mr. Sailasa Taganesia Information, Technology & Computing Services Audio-Visual Mr. Mike Terry (Navigator) Williams & Goslings Ms. Florence Swamy Fiji Audio Visual Commission Ms. Vani Tamanitoakula Fiji Audio Visual Commission Mr.Leo Richmond Sunlight Film Services Mr. Mike McLean Location Scout

Financial Services: Mr Filimone Waqabaca (Navigator) Reserve Bank of Fiji Mr Suren Kumar Capital Markets Development Authority Ms Jinita Prasad South Pacific Stock Exchange Mr Laurie Mellsop Colonial Group (Fiji) Ltd Mr David Evans Westpac Banking Corporation Dr Nur Bano Ali BDO Zarin Ali Mr Gilbert Veisamasama Gilbert & Samuels Ltd Mr Bruce Sutton KPMG Mr Pradeep Patel G. Lal + Co Ltd Mr Dinesh Shankar Venture Capital Partners (Fiji) Ltd Mr Semi Leiwere Edge Consultants Limited

Health Services: Dr Tim Smart (Navigator) Suva Private Hospital Mr Ajay Raniga Budget Pharmacy Dr Jonacani Tuisuva Fiji School of Medicine Dr Joji Malani Fiji School of Medicine Dr Temo Waqanivalu World Health Organisation Ms Rusieli Taukei Ministry of Health

152 Education/Training Mr. Jone Usamate (Navigator) Training & Productivity Authority of Fiji Mr. Josua Mataika Fiji Institute of Technology Ms. Taufa Vakatale The University of Southern Queensland Mr. Josefa Natau Ministry of Education, Youth Employment Opportunities & Sports

Labour Mobility Mr. Isikeli Mataitoga (Navigator) Ministry of Foreign Affairs & External Trade Major Ned Taito Republic of Fiji Military Forces Mr. Sada Nand Fiji Police Force Mr. Josateki Labadoi Homeland Security Services Ltd Ms. Ilisapeci Koroi Caregivers Services International (Fiji) Ltd Ms. Kuini Lutua Fiji Nursing Association Mr. Tevita Kunatuba Ministry of Labour & Industrial Relations Mr. Marika Ravula Department of Immigration Mr. Amena Yauvoli Ministry of Foreign Affairs & External Trade Ms. Anju Keetharuth Ministry of Foreign Affairs & External Trade

153 Annex 2 Annex 2

The National Trade Support Network Prime Minister’s Office Ministry of Foreign Affairs & External Trade Ministry of Finance & National Planning

Ministry of Foreign Affairs & External Trade Ministry of Fisheries & Forests

Ministry of Commerce & Industry Ministry of Agriculture

Ministry of Public Utilities & Ministry of Tourism & Transport Infrastructure Development

Reserve Bank of Fiji Ministry of Information & Export Strategy Communications Support Network Fiji Islands Chamber of Commerce Fiji Islands Revenue & Customs & Industry Authority Fiji Employers Federation Fiji Manufacturers Association Fiji Islands Bureau of Statistics Fiji Indigenous Business Council Exporters Club Ministry of Labour & Industrial Relations

Fiji Institute of Accountants Industry Associations Trade Standards & Quality Control Office Commercial Banks, - ANZ, B o r d e r - I n Colonial & Westpac Training Productivity Authority of Fiji Capital Markets Development Authority Fiji Institute of Technology University of the South Pacific Fiji Freight Forwarders Association Ministry of Women, Social Welfare S e r v i c e s B o r d e r Fiji Islands Customs Service & Housing Delivery Networ Ministry of Fijian Affairs, Lands& Immigration Department Provincial Development D e v e l o p m e n t Quarantine Department National Centre for Small & Insurance companies Micro Enterprise Development Fiji Investment Corporation Ltd Fiji Islands Trade & Investment Bureau B o r d e r - O u t Fiji Development Bank Fiji Islands Visitors Bureau NGO’s Fiji Audio-Visual Commission Pacific Islands Forum Secretariat Trade & High Commission and Embassies abroad/Foreign Missions

154 Annex 3 Export Incentives

A. DIRECTLY TARGETTING EXPORTERS

1.0 EXPORT INCOME DEDUCTION

1.1 The export income deduction was introduced as part of the 2001 Investment package. It provides tax deduction up till 2008. Available to all exporters and is not available in relation to re-exports.

Table 8: Export Income Deduction

Year Percentage of export of assessment income to be deducted 2001 and 2002 100% 2003 and 2004 75% 2005 and 2006 50% 2007 and 2008 25% 2009 and every year thereafter 0%

1.2 This measure was introduced to cushion the effect of the repeal of the TFF incentives with effect from 2001.

2.0 DUTY SUSPENSION SCHEME

2.1 Enables exporters to have access to inputs without having to pay for duties upfront.

2.2 Imported goods are conditionally relieved from payment of fiscal duty and VAT on the basis that such goods will be substantially transformed through manufacturing or processing and subsequent exportation.

2.3 The Scheme would entitle exporters to import duty free an amount equal to the proportion of approved imported inputs required to produce exports. This is called entitled Proportion (EP).

2.4 Administered by the Exporters Club, which is a private sector led organization.

155 3.0 VANUA LEVU EXPORT INCOME DEDUCTION

3.1 100% Export Income Deductions from 2005 to 2008 available for all exports. To ensure that this policy is WTO compliant, it is important that exportable commodities are substantially transformed. This means that the raw materials being used must be significantly converted into the exportable commodity.

3.2 Available to both new and existing businesses in selected targeted industries of information communication and technology, agriculture, forestry, mining, manufacturing, textile, clothing and footwear, timber manufacturing, fishery manufacturing or ship building

B. OTHER INCENTIVES (AVAILABLE TO ALL TAXPAYERS IF THEY QUALIFY)

1.0 40 PERCENT INVESTMENT ALLOWANCE

1.1 40% deduction for investment allowance can be claimed between 2001 and 2008 (both years inclusive) in respect of qualifying expenditure relating to the following investment activities: - 1. an agricultural, forestry or marine resources business; 2. an information technology business; or 3. a rural manufacturing business.

1.2 “Qualifying expenditure” means expenditure of at least $50,000 on the acquisition of capital assets excluding land or building, a passenger vehicle or trading stock.

2.0 SMALL AND MICRO ENTERPRISES (SMES)

2.1 To support the SMEʼs industry. Income Tax exemption to be applicable to selected sectors with maximum turnover threshold of $200,000. The selected sectors include: 2.1.1 Agriculture and Fishing (Sugarcane Farmers; Coconuts; Rice; Ginger; Yaqona; Fishing; Raising livestock; vegetable farming and Bee keeping) 2.1.2 Tourism (Sea Cruise and River tour operators; Sea Tour Operators; 2.1.3 Community and Social Services (Amusement, recreation services; traditional handicraft producers (not “middlemen” or “agents”)

156 3.0 ICT INCENTIVES

3.1 Incentives includes: 80% income tax exemption for businesses employing more than 101employees; 60% exemption for those that employ between 60 to 100 employees and 40% deduction for those employing 10 to 59 employees.

3.2 The incentive will be available from 1/1/2006 to 31/12/2012 (7 years). The incentive will be available for new ICT business as well as existing if there is significant increase in capacity and the number of employees.

3.3 Approved ICT industries include: Software development, Call centers.

3.4 150 percent tax deduction allowable in respect of costs incurred for the development of Information Communication Technology business, including software development, call centres or Internet services by any taxpayer employing 500 or more employees.

4.0 AGRICULTURAL INCENTIVES

4.1 To assist the agriculture and fisheries sector, the following incentives will be made available from 1/1/06. There is 200% deduction on capital expenditure.

4.2 The activity under this assistance will include listed items under Paragraph 32 of PART V of the Depreciation Schedule. It includes amongst others the purchase of farm implements and plant & machinery used on the farm as well as cost of irrigation. The incentive will be available to all taxpayers not enjoying other concessions under the Income Tax Act. The concession will be available for 5 years effective from 1/1/06.

5.0 INCENTIVES FOR NEW INVESTMENT OR RE-INVESTMENT FOR FOOD PROCESSING AS WELL AS FORESTRY.

5.1 100% of the amount of investment as a deduction. Re-investment will also be allowed for expansion purposes. In order to qualify, the investor should utilise 50% of local produce in its production process.

C. EXPORT INCENTIVES NO LONGER VALID BUT CLAIMED BY TAXPEYERS HOLDING ONTO THE TFF LICENCE

1.0 TAX FREE FACTORIES INCENTIVES 1.1 This incentive was discontinued in 2001 in line with WTO issues. However, there are several taxpayers who are still claiming these incentives since they

157 still hold on to the TFF licence. The TFF incentive entails the following:- • 13 year tax holiday on all the export profits • Exemption on dividends derived by a resident shareholder • Exemption of withholding taxes levied on income under the Income Tax Act • Import Duty Exemption on machinery and equipment in so far as they are required for the establishment and factory operation of the trade, business or manufacture to be carried out in the Tax Free Zone.

2.0 3rd, 5th and 7th SCHEDULE OF INCOME TAX ACT

2.1 5th Schedule to the Income Tax Act – this schedule provided 13 year tax exemption on export profits subject to certain conditions. Together with the 5th Schedule, the 3rd and 7th Schedules were also discontinued with effect from 2001. 2.2 7th Schedule to the Income Tax Act – this schedule generally exempted profits derived from Agricultural incentives subject to certain conditions. 2.3 3rd Schedule of the Income Tax Act – this schedule provided 5 year tax exemption (up to certain extent) to approved enterprises;

3.0 EXPORT PROMOTION INCENTIVES

3.1 The 150% tax deduction on export promotion activities was allowed in line with the 5th Schedule.

158 Annex 4

Trade Support Network – Assessment Trade Support Organization: Ministry of Finance & National Planning Mandate: To provide sound social, economic and financial advice & effectively manage the Governmentʼs Budget system and balance sheet Performance (Y/N): High Acceptable Requires Improvement Yes Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial n/a No Scarcity of resources is due to the to narrow-revenue base of Government. b)Institutional Assets n/a n/a c) Programmes n/a n/a d) Personnel n/a n/a Overall Commentary: The Ministry of Finance & National Planning is to effectively co-ordinate the funding initiatives identified and prioritized relative to the revenue-generating potential of sectors generally. Trade Support Organization: Ministry of Commerce & Industry Mandate: To formulate and implement policies and strategies to facilitate Private Sector Development and Economic Growth. Performance (Y/N): High Acceptable Requires Improvement No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial No Yes Budgetary allocation is inadequate to effectively carry out export-development initiatives. b)Institutional Assets No No trade data base for exporters to access regarding market information. c) Programmes No No n/a d) Personnel No No Staff establishment is a priority to consider. Overall Commentary: The Ministry of Commerce & Industry to effectively consider co-ordination and maintaining good/sustainable working relations with other line Government agencies to fully implement Export development initiatives identified in the National Export Strategy. Trade Support Organization: Ministry of Foreign Affairs & External Trade Mandate: To provide policy advice to the Government regarding the formulation and implementation of its foreign trade policies. Performance (Y/N): High Acceptable Requires Improvement No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial No Yes Budgetary constraints are a hindrance to fulfill the mandate of the Ministry. b)Institutional Assets No No Trade Database currently been developed with FTIB. c) Programmes n/a n/a n/a d) Personnel No No Staff establishment is a necessity and the need to mandate that only officers with trade-related qualifications to man our overseas high commissions/ embassies

Overall Commentary: The Ministry of Foreign Affairs & External Trade to effectively co-ordinate its working relations with the line agencies involved in export development to facilitate foreign trade policy development.

159 Trade Support Organization: Ministry of Agriculture (AgTrade Section) Mandate: Revitalizing the Agro-Sector for Sustained Foreign Exchange Earnings Performance (Y/N): High Acceptable Requires Improvement No No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial No Yes This has been a common problem, however the inability to prioritize resources within the Ministry is a concern. b)Institutional Assets No No Information related to Ag-Trade is not readily available to the export fraternity and the public at large. c) Programmes No No The Alternative Livelihood Programme (ALA) is currently in place for displaced farmers from the Sugar Industry and other potential export farmers. Other subsidies are in place. Eg. transporting, etc. d) Personnel No No Lack of capacity in the Research & Development area, thus unable to compete with well-established Agro- based economies. Overall Commentary: Government to focus on developing this Industry and ensuring that the Ministry of Agriculture (Ag- Trade) is well-resourced to fully implement its mandated functions and resource allocation is focused to the needs of the Industry. Trade Support Organization: Ministry of Tourism & Transport Mandate: To formulate & implement Tourism-related Policies & Administer Affirmative Action Plans Performance (Y/N): High Acceptable Requires Improvement Yes Yes Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial Yes Mo About FJD 13 million is allocated to the Fiji Visitors Bureau for Tourism Marketing purposes. b)Institutional Assets No No Data base computation capacity to be strengthened & not to rely on consultants for useful reliable data for economic projection purposes. c) Programmes No No Full-Slip & Half Slip provision issues will have to be effectively managed to prevent double-dipping by prospective applicants. d) Personnel Ministry personnel to undergo some form of Industry-Training accreditation for effective service delivery to its stakeholders. Overall Commentary: The Ministry to work closely with the Ministry of Agriculture on how best to reduce the leakage in the imports of foodstuffs for hotels and create synergies with the marketing efforts of FVB with FTIB, FAVC and other members of the export fraternity. Trade Support Network Trade Support Organization: Ministry of Fisheries & Forests Mandate: Responsible for the Sustainable Development & Management of the Fisheries and Forest Resources and the Industry it manages. Performance (Y/N): High Acceptable Requires Improvement No No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial No Yes Budgetary constraints to implement policy initiatives, however priorities are not staggered against the needs of the Industry. 160 b)Institutional Assets No Yes Data base, training aspects on readily available on fisheries & forestry related issues are not readily available. c) Programmes No Yes SCARF Fisheries & Forestry programmes are administered by the Ministry. d) Personnel No No Personnel lacking in all facets and a need to build up capacity & competency in both Fisheries & Forestry sectors. Overall Commentary: Institutional strengthening is a necessity to allow the Ministry to be more focused in resource management and timely assistance to the needs of stakeholders. Trade Support Organization: Ministry of Labour & Industrial Relations Mandate: To promote Productivity Improvement Performance (Y/N): High Acceptable Requires Improvement No Yes Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial N0 Yes Budgetary constraints is a hindering factor to achieving its policy initiatives. b)Institutional Assets No Yes c) Programmes No Yes d) Personnel No Capacity building is required and integrate Industry needs with the TPAF course curriculum.

Overall Commentary: The Ministry of Labour & Industrial Relations to carry out an effective awareness campaign on the Productivity rationale of the Employment Relations Bill and the need for high efficiency and productivity in the workplace to boost export performance.

Trade Support Organization: Ministry of Information, Media & Communications Mandate: To Provide support services to the Minister in respect of the duties and responsibilities of the Minister under the relevant provisions in the Posts and Telecommunications Decree 1989 (the P&T Decree 1989) on matters relating to posts and telecommunications. Performance (Y/N): High Acceptable Requires Improvement

No No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial No No Budgetary considerations for effective delivery of service in the major transformation besetting the ICT Industry. b)Institutional Assets No Yes Regulatory environment issues on the ICT Industry to be made available to the export fraternity & the public at large. c) Programmes No Yes Hasten deregulation policy initiative in the ICT Industry. d) Personnel No Yes Capacity building is required to effective serve the needs if the ICT stakeholders. Overall Commentary: The Ministry of Information, Communication & Media Relations to facilitate the implementation of the ICT deregulation policy initiative as a precursor to reducing the cost of doing business in Fiji for the export fraternity, the business community and the public at large.

161 Trade Support Organization: Reserve Bank of Fiji

Mandate: To regulate the issue of currency, and the supply, availability and international exchange of money; promote monetary stability & a sound financial structure; and foster credit and exchange conditions conducive to the orderly and balanced economic development of the country (Section 4 Part II Reserve Bank Act 1983. Performance (Y/N): High Acceptable Requires Improvement No No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial yes No b)Institutional Assets No Yes Export figures & information are not readily available c) Programmes Yes No The Export Credit Facility is available with the RBF, however the export fraternity is unaware of its existence. More awareness needs to be done on the available facility. d) Personnel No Yes An export facilitation section, staff establishment to link up with the various Trade Support Network Agencies. Timely & critical decisive actions are to be taken to effect export development policy initiatives. Overall Commentary: The Reserve Bank of Fiji to strengthen its data computation methods to capture the ranges of economic activity undertaken in the economy. Concerns have been expressed by Industry players on the under-reported aspects of the export-earnings of certain sectors. On the other end, the Fiji Islands Bureau of Statistics (FIBOS) to also improve on the method of data capturing. This is imperative since such data will be used as the basis of making future economic projections for growth, and so forth. On the Export Credit Facility, RBF to work closely with the various Banks on the working guidelines to enable the export fraternity to access available at a low-interest rate. Service Support Network – Resource Assessment Service Support Organization: Fiji Audio Visual Commission Mandate: To Develop & promote the Audio-Visual Industry in Fiji into a flourishing, culturally diverse, competitive and commercially viable. Performance (Y/N): High Acceptable Requires Improvement Yes Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial No No Budgetary constraints is an impediment to the development of its policy initiatives. b)Institutional Assets No No Need to set-up training attachments with film-making crew coming to shoot films in Fiji. c) Programmes Yes No F1 & F2 Type Incentives for Audio Visual Type Incentives for Audio Visual Production. d) Personnel No Yes Capacity building is necessity to allow the FAVC to meet/respond better to the needs of the stakeholders. Overall Commentary: Government to consider increasing the Budgetary allocation for FAVC –marketing purposes, however FAVC to focus more on capacity in the training of film-making crew & equipment handling training. Service Support Organization: Fiji Islands Trade & Investment Board Mandate: To actively promote investments and export of goods and services Performance (Y/N): High Acceptable Requires Improvement

Resource Level (Y/N): Adequate Inadequate Comment a) Financial No Yes Budgetary constraints is a hindrance to its Investment & Promotion initiatives.

162 b)Institutional Assets No Yes Information on Export Data is not readily available to the export fraternity and the public at large. c) Programmes d) Personnel Need to focus on market intelligence and more on export analysis. Overall Commentary: Government to consider increasing its Budgetary allocation and the FTIB to re-prioritize its policy initiatives to focus on market intelligence on export development analysis.

Service Support Organization: Trade Commissions Office – LA & Taiwan Mandate: To Attract Productive Foreign Direct Investment to Fiji Performance (Y/N): High Acceptable Requires Improvement No No Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial Yes No b)Institutional Assets c) Programmes d) Personnel The Ministry to consider appointing the appropriate person with the relevant trade-related qualification to spearhead targeted Investment initiatives overseas.

Overall Commentary: Effective co-ordination between the Strategy support players is critical to the overall attainment of Investment & export development initiatives. Service Support Organization: Fiji Visitors Bureau

Mandate: To Effectively Market Fiji as an Ideal Tourist Destination abroad Performance (Y/N): High Acceptable Requires Improvement No Yes Yes Resource Level (Y/N): Adequate Inadequate Comment a) Financial Yes No Budgetary allocation of FJD 13 million b)Institutional Assets Yes No Trade information data is readily available. c) Programmes Yes No d) Personnel Yes No Marketing efforts to concentrate on attracting the Bali Market Segment. Overall Commentary: The FVB to synergize with FTIB, FAVC on its marketing campaign since the other two agencies can piggy-back on such initiatives organized by the FVB.

163 Annex 5

CROSS CUTTING MATRIX

OBJECTIVE 1: TO IMPROVE MARKET ACCESS FOR FIJI PRODUCTS OVERSEAS

Key performance Necessary Implementation Strategy Indicators Resources Organization • Negotiate bilateral /regional • Bilateral Agreements • Policy support • MFNP trade and economic with New Caledonia and • MCI cooperation agreements Tahiti finalized by 2008 • MFAET with friendly countries • FTIB • PICTA Implementation • MA • Conduct stock take and difficulties sorted out by review of agreements for 2008 improved market access under SPARTECA to Australia and NZ • Increase in trade to Australia and NZ • Enhance/speed up with markets Australian government on S-TCF outstanding issues

• Negotiate with NZ government for improved market access under • Increase trade and SPARTECA for garment investment opportunities exports with countries identified under the ʻLook North • Enhance economic Policy” for broader cooperation with countries market base identified under the ʻLook North Policy”

• Establish a public-private sector trade negotiating committee

164 OBJECTIVE 2: TO IMPROVE ACCESS TO FINANCE

Key performance Implementation Strategy Necessary Resources Indicators Organization

• Review loan criteria and • Criteria review for • Existing Resources • MFNP interest rate loans by 2007 • RBF • Commercial • Review security /collateral • Increase in number Banks requirements for FDB and and value of loans for • NCSMED. other lending institutions export related activities and commercial banks up to 50% by 2011

• Review Export Finance • Export Finance Facility Facility coverage on reviewed by 2006 export potential sectors • Financial currently excluded Resources • Increase in the loan • Set up an Export portfolio to the export Development Grant sectors and in the number of lending agencies.

• Introduction of an export • Increase in effective credit insurance facility protection of collateral for exporters • Additional funding resources funding to be • NCSMED budgetary made available to micro allocation increased finance institutions by 20%

• Disseminate information • Information on access on loan and criteria much to export finance be more widely readily available on the internet and brochures

• Assist exporters in • Increase in number of developing business plans exporters assisted with business plans

165 OBJECTIVE 3: TO PROVIDE EXPORTERS WITH MARKET INFORMATION

Key performance Necessary Implementation Strategy Indicators Resources Organization • Conduct market research • Detailed database on all • Existing • MFNP export markets by 2008 resources • FTIB on a user pay basis • Exporters Club • Develop a buyers directory • Buyers directory • MCI published by 2008 • MFAET • Conduct workshops and • MA seminars to update exporters • Increase in number of on market and logistical exporters assisted requirements

• Establish a Market Intelligence Unit for export development and promotion

• Wider dissemination of market information to all stakeholders

Objective 4: To source raw materials at a competitive price

Key performance Necessary Implementation Strategy Indicators Resources Organization

• Seek alternative sources of • Reduction in the cost of • Existing • FTIB raw material raw material imported resources • MA by 2010 • MFAET/ Overseas Missions • Exporters Club

166 Objective 5: To reduce transportation costs

Key performance Necessary Implementation Strategy Indicators Resources Organization

• Subsidize freight and port • Reduce freight costs by • Existing • MTT charges 25% by 2011 resources • MPEPSR • MTT • Increase export volumes • MPUID • Increase the number by 30% by 2008 • MFNP and frequency of freight carriers and create • Increased freight capacity competition by 30% by 2008 and 10% annually up to 2011

• Port charges by shipping companies removed immediately • Review documentation and processes to facilitate • Documentation and speedy clearance clearance procedures and processing of reviewed to achieve a 24 documentation - hour time frame

OBJECTIVE 6: TO CAPITALIZE ON FIJI AS THE “ENTRE PORT-HUB” OF THE PACIFIC

Key performance Necessary Implementation Strategy Indicators Resources Organization

• Develop new areas/ • A new “Export Zone” • Financial • MFNP zones/industrial parks for developed by 2009 with resources packaging/ re packaging, appropriate tax incentives • FPCL bulk buying and consolidation activities • A new industrial zone developed by 2009 with appropriate tax incentives

• Upgrade technology to be • Increase in efficiency in more productive in bulk handling of goods handling • Reduction in damaged bulk products reduced by 25% annually

167 Objective 7: To provide incentives to exporters

Necessary Implementation Strategy Key performance Indicators Resources Organization

• Streamline the VAT refund • 100% of VAT refunds are None • FIRCA process made within the statutory • MFNP limits (30 days)

• Impose high duty rate on • Increase in use of locally goods that can be sourced available resources locally • Increase in new exports • Duty free on all raw materials and capital goods imported • Percentage of export that are not locally available income deduction to be increased to 100% until Review incentive package to 2011 win new investors

Objective 8: To maintain stable exchange rate

Strategy Key performance Indicators Necessary Implementation Resources Organization

• Prevent domestic resources • Reduce the Trade Deficit to Policy • RBF from being over valued 10% of GDP by 2011 support • MFNP • FIRCA • Formulate a right policy mix of export orientation and import substitution replacement strategy

OBJECTIVE 9: TO IMPROVE FIJI’S PERCEPTION ABROAD

Necessary Implementation Strategy Key performance Indicators Resources Organization

• Monitoring press releases • Increase in FDI flows • Existing • FTIB/ Trade resources Offices • Press releases from the • Increase in Tourist arrivals • FVB PMʼs office and testimonials from traditional and non • MIC from investors included traditional markets by 45% • FiCL in government ministries/ 2010 • MFAET agencies websites • Overseas Missions

168 Objective 10: To improve implementation of public sector reform

Necessary Implementing Strategy Key performance Indicator Resources Organisation

• Reform of the organizational • Improvement in the • Existing • MPEPSR culture financial statements of the resources • MFNP • Review the level of reformed enterprises • PSC autonomy given to reformed • MCI organizations • Public sector reforms to be • FTIB • Review of Higher Salaries completed by 2012 Commission • Remove COLA remuneration • Productivity based system system and introduce introduced by 2008 productivity based system

Objective 11: To maintain sustainability of Fiji’s natural resources

Strategy Key performance Necessary Implementation Indicators Resources Organization

• Efficient technical and • Enforcement of the • Existing • ME management of natural resources Environment Management resources • MFF Act • MFALPD • Establish a land utilization • MA group • Increase productivity of • NLTB land utilization by 50% by • AMA 2011 • Fiji • Availability of proper training Agromarketing opportunities for the labor force • Appropriate mechanisms put in place for sustainable use of resources • Set up warehouses for processing of agriculture • Increase in export of produce fresh fruit and vegetables by 50%

169 OBJECTIVE 12: TO PROVIDE ADEQUATE RESOURCES TO INVESTMENT

AND PROMOTION INSTITUTIONS

Key performance Necessary Implementation Strategy Indicators Resources Organization

• Increase in budget • Increase in the level of • Additional • FTIB allocation to investment exports and investments financial • FAVC and marketing institutions resources • AMA • Autonomy of the boards in decision making, budgeting, human resource allocations OBJECTIVE 13: IMPROVE RECOVERY PERIOD AND DOWNTIME RESULTING FROM DISASTERS

Key performance Necessary Implementation Strategy Indicators Resources Organization

• Develop and • Disaster Management • Existing resources • MFALPD Implement recovery Plan implemented by plan focused on each 2008 disaster impact • Appropriate legal • Enact appropriate legal framework enacted by framework to manage 2009 disasters.

170 Objective 14: To improve efficiency of infrastructure provision Strategy Key performance Necessary Implementation Indicators Resources Organization • Introduce commercial • Provision of adequate, • According • MPEPSR disciplines in the Water efficient and cost to budget • MTT and Sewerage sub-sectors effective public utilities allocation • MPUID benchmarked against • MIC international best practices at competitive prices • Improve telecommunication, • Upgrade Nadi, Nausori roads, port and airports Airport and other to facilitate the exporting domestic airports by sector through reforms and 2008 institutional strengthening e.g. PWD, Fiji Ports etc • Upgrade major wharves and outer island jetties by 2010

• Develop and implement an • Maintenance infrastructure maintenance programme to programme international best practice introduced in 2008 and maintained on an ongoing basis such as Mainpac Objective 15: To improve quality and standards of training programs

Key performance Necessary Implementation Strategy Indicators Resources Organization • Review school curriculum • Increase productivity • Existing • MEYS to enhance national level by 50% by 2011 resources • MLIR competitiveness • TPAF • Service charters, KPIs • PSC • Establish better are published and • MFNP networking with performance measured educational institutions and publicly reported to tailor make industry training requirement • Service charters, KPIs are published and • Establish a benchmark to performance measured set a National Productivity and publicly reported Index • Performance pay system • Establish a system of implemented by 2008 performance benchmarks for public service

171 Objective 16: To improve land tenure and qoliqoli system

Key performance Necessary Implementation Strategy Indicators Resources Organization • Effective management of • Implementation of the • Existing • NLTB the Qoliqoli Bill Qoliqoli Bill by 2007 resources • MFALPD

• Review the current land • Changes to administration process to lease conditions ensure speedy availability implemented by 2 of land for development and fair return to landowners

Objective 17: To conduct research and development on Fiji’s products

Key performance Necessary Implementation Strategy Indicators Resources Organization • Establishing a national • National research and • Budgetary • MCI research and development development facility allocation • MA facility setup by 2009 • MFF • MFNP • Recruitment and • MCI • Provide training of proper remuneration qualified personnel of qualified personnel conducted by 2010

• Begin implementation • Implement Technology of the Technology Policy Policy in 2008

Objective 18: To create a Fiji brand

Strategy Key performance Necessary Implementation Indicators Resources Organization • Utilize the positive • A new brand name for • Existing • MFNP image created by sports Fijiʼs exports created resources • MFAET personalities in marketing by 2008 • MTT Fiji as a brand • MCI • Trade • Capitalize on the Commissions good image created internationally by Fiji products such as Fiji Water and Pure Fiji

172 Objective 19: To improve business competitiveness

Key performance Necessary Implementation Strategy Indicators Resources Organization • Reduce bureaucratic • Complete • Existing • MCI procedures for permit, Implementation of resources • FTIB licenses and approvals Cabinet decision 662 to streamline • Revise the Foreign investment approval Investment Act regulations processes to encourage more productive investment • Increase the stock of FDI to 25% of GDP

Objective 20: To improve quality and standards of products and services

Key performance Necessary Implementation Strategy Indicators Resources Organization • Implementation of TQM • Increase in the number • Existing • MCI practices by enterprises of enterprises that Resources • DFTCA become ISO accredited • MCI • MTT • Proper monitoring of quality • Increase in number and standards of products of low quality and sub-standard products ceased at ports • Develop standards for ICT, tourism • Standards approved by Cabinet in 2009

173 Support Agency Support Implementing Trade Trade Implementing MFNP, MFNP, MA, MFAET MFF, MCI, MA MA, Industry players MA, ME MPUID MA, MFNP, players) FTIB, MCI, MFNP MFF, MFAET, MFF, FIMSA, MFAET, TPAF FIT, TCF Council (Industry MFNP MFF, MFNP MFF, Budgetary Considerations Source from existing Budgetary framework & Aid-In Kind from Bi/Multilateral partners seek Funding to be provided by the Private Sector. Source from existing ALP & ROI funding and Budgetary provision for such purposes Budgetary provision for such purposes also from MPUID Budgetary considerations for new factory outlets factory new for considerations Budgetary Budgetary considerations Budgetary considerations for courses development & appropriate fishery for staff curriculum Additional User pay structure TPAF Consultant costing to conduct courses in Investment in IT of existing garment factories establishment Budgetary provision for such purpose Annex 6 Resource Mobilisation Matrix Strategy Objectives Encouraging the transformation of Safeguarding exploiting Fijiʼs favourable and quarantine commercially Ensuring & Commercially Capitalizing Agro Processing Industries Investing in status on Environmental Sustainability subsistence to commercial farming Improving Market Access Improving Market Tapping into Tourism Industry Tourism into Tapping Establishment of a Fish Accreditation Establishment of a Fish Capacity Building –from fishing to Capacity Building –from fishing Compliance under Rules of Origin Improving Fisheries Resource Management processing, management & marketing Scheme the budgets of institutions in public sector that are allocated to export development activities Sector GARMENTS MARINE PRODUCTS AGRO-BUSINESS Financial Resources:

174 Support Agency Support Implementing Trade Trade Implementing MFAET, MA MFAET, EU MFNP, MCI, MFAET, MH, MCI, MFAET, MRD, ME MCI, MRD MCI, MRD, ME, MH TCF MCI, MFAET, Council TCF Council MLIR, PIFS SPC, FFA, MFF, MFF MFAET, MFF MFAET, Institutional Assets Requirements Institutional Re-orientation of policy initiatives & seek TA from Bi/Multilateral partners on standards requirement issues MCI, MRD, to co-ordinate policy initiatives On-going diplomatic dialogue On-going lobbying with MLIR more on resource management in upskilling the training needs of Industry Co-ordination of policy initiatives to Standards Order 2004 amend Water to other PICʼs Lobbying by MFAET Re-orientation of policy initiatives to focus from Bi/Multilateral partners to assist TA Seek Source funding from the existing framework Budgetary and seek Aid-In-Kind from bi/ Multilateral partners EU/Committed budgetary provisions by Govt Strategy Objectives Rationalizing focus Extension efforts research and means of Livelihood Sustaining Cane-Farming as a Viable Fulfilling Market Access Requirements Fulfilling Market Improving Fisheries Resource Continuing lobbying for wool inclusion Improving mechanism effective between Private Sector & consultation Making Water Bottling Economically & Sustainable in Fiji Viable Relations of the Employment Curtailing Bill Access to Fish Facilitating in the EEZʼs of neighbouring Countries (Regional Waters) Capacity Building –from fishing to Government under the S-TCF scheme Management processing, management & marketing Sector Mineral Water Mineral Marine Products SUGAR Garments facilities, plus institutional goodwill. Institutional Assets : Facilities that can be made available to the national export development effort such as data bases, training facilities, testing

175 MH, ME MFF Industry players FIMSA, FIRCA, MFF ME, MH, MFF Quarantine Dept. FIMSA, MFF MFF, Industry players, MFF, MFF MFNP, RBF, FIMSA, FPCL, MFF, Dept. of Immi, MFF, MH, FIMSA, FPCL, MFF, MFF, FAVC, FVB, “Flag for foreign fishing vessels of Convenience” catches in Fiji off-loading consultation with all stakeholders Re-orientation of policy initiatives purposes accredited companies development line agencies Facilitate the subject matter Establishment of policy guideline to that ensure Fish processing companies are HACCP (Hazard Analysis Critical Control Point) Effective co-ordinated checks by the relevant Re-orientation of policy initiatives after due from Bi/Multilateral partners in Seek areas TA of competency development assessment. & Legal delegation of conformity powers from Act 2003 to MFF. Food Safety Industry players to participate in & FVB Investment by FTIB, FAVC missions organized the of possibility the into look to FIMSA Effective co-ordination for timely & effective dissemination for economic projection FPCL to facilitate the Rokobili Port Standardizing fishing facilities to practices domestic & international & Promoting Industry potential via Assessing current discrepancy in the Increasing the range of class 4 fishing Masters by 200 miles to enable fishing Promoting Quality Assurance Schemes Promoting Quality Cutting down on red-tape on clearance of foreign fishing vessels Security of fishing licence tenure (10 years) to satisfy requirements lending institution requirements Adding International Marketing Campaigns Rules of Origin (ROO – Fish Products computation of export data Improving Port Facilities/capacity in high seas Promoting Down-Streaming & Value-

176 Support Agency Support Implementing Trade Trade Implementing MFF, FIRCA MFF, FIRCA MFF, FIRCA, MCI, MFNP FIRCA, MFNP MA, FDB, MFNP MA, Industry players MA, AMA, MFF MFNP, MFF, MFNP, AMA, MA, MCI

nd Export Programme Requirements Export Programme Provision of incentives to Bottled water Re-orientation of Taxation regime (removal/ etc) gear, reduction of duty on fuel, fishing Re-orientation of Taxation regime (removal/ etc) gear, reduction of duty on fuel, fishing companies Accelerated depreciation on IT Increase import duty on all imported food items food imported all on duty import Increase by 10 % to fund export initiatives Agro- in the Business sector. This funding arrangement to continue for 10 years and reviewed every 2 FDB Board commitment to Agro-Sector review of lending criteria to the take proactive year to rejuvenate the Agriculture sector. year to rejuvenate the councils Expediting ALP ALP Expediting to assist Commodity/Industry & private sector & private sector Rationalising and agencies government relevant within resources alignment of existing Rationalising and agencies government relevant within resources alignment of existing Strategy Objectives Making Water Bottling Economically & Sustainable in Fiji Viable Improving IT networks operations in Garment Reducing Cost of Doing Business Adding Fish Processing Access Improving Market Improving Export Credit-Facilitation Promoting Down-Streaming & Value- Marketing & Brand Development & Promoting Farming Adaptation as Business a Promotion Enhancing Quality & Consistency of Supply Initiatives designed to improve competitiveness and export performance, including duty drawback scheme, information dissemination Sector Mineral Water Mineral Garments Agro-Business Marine Product Programmes: credit & insurance schemes, matching grants, national branding programmes, cluster development programmes programmes, export financing, Personnel: Specifi cally the number of persons required to maintain/ improve public sector institutions

177 Agency Support Agency Support Implementing Trade Support Trade Ministry of Education, & Sports Youth Implementing Trade Trade Implementing Ministry of Finance Ministry of Health § education and training All institutions providing MFF, MFF, TPAF, Industry MCI MA, MFAET, MFF, FIMSA, FPCL MFF, players Budgetary Considerations Personnel Requirements annually institutions Increase health budget allocation by $3m Continued government grants assistance and subsidies through to schools and tertiary Focused priorities amongst current Private Sector to provide input in the design of staff by MFF training programmes & finalized Rationalizing HR personnel in relevant govt. improving on focus to Offices Trade Ministries, Agro-based commodities market access of establishment Strategy Objectives Strategy Objectives To gain To the necessary accreditation for full recognition of qualifications upgrading and maintenance gained, in the region marketability and size the increase To of the labour force Increase budget allocation to cater for cater to allocation budget Increase Promoting Down-Streaming & Value- Adding Fish Processing processing workers Access Improving Market Appropriate training Managers, for fishing Resource vessel crew & the budgets of institutions in public sector that are allocated to export development activities SECTOR Sector EDUCATION/TRAINING Marine Product Agro-Business HEALTH SERVICES HEALTH Service Sectors Financial Resources:

178 Ministry of Health Ministry of Education, & Sports Youth (updating of curricula) Ministry of Finance & National Planning Trade Standards Trade MOE, IT Trainers FTIB MFNP & Quality Control Office, MOE MFNP,

• • § • • • • Increase in budgetary allocation for FSN such purposes. benchmark. for such purposes Allocate 10 % of budget FTIBʼs (FJD 0.34 m) Sector. for investment missions abroad –ICT for m 0.16 (FJD budget ITCʼs of % 10 Allocate budget Office Standards Trade of % 10 Allocate (FJD 0.067 m) to set global standards in ICT. Allocate 20 % global against purposes D & R from of m) 0.0055 the MOE budget (FJD Allocate 10% of the MOEʼs budget (1.66 m) graduates Increasing the number of process Outsourcing Software Training Development & IT Companies Retention of skilled labourers – building competency and capacity to meet export market demands Create positive perception and confidence in IT/BPO Industry globally curriculum in the Education system To increase the number of nursing To Review and Increase the ICT

• • • • • LABOUR MOBILITY ICT

179 Com MTT players MFNP MA MICT & MICT Industry ICT IT MICT, Trainers MFNP, MICT, FAVC FDB FAVC, MICT, TFL MICT,

• • • • • • • •

• MPUID, FEA m) for such purposes for such purposes 0.5 million for such purposes for such purposes allocated for E-Commerce such purposes consultant is yet to be determined) productions) Budgetary requirements Allocate 20 % of Com Comʼs budget (FJD 0.46 (FJD budget Comʼs Com of % 20 Allocate Allocate 10 % of MTTʼs budget ( FJD 1.6 m) ICT Industry players & MICT to allocate FJD Allocate 20 % of budget FBOSʼs (FJD 3.2 m) Allocate 40 % of MICTʼs budget (FJD 6.2) Allocate FJD 1 m for construction tanks of water and sound stage facility (Costing of Government grant to FAVC FDB allocation (co-financing local m) from telecommunications regulatory unit Allocate 20 % MPUIDʼs budget (FJD 2.9 m) for roads, airstrips & jetties Allocate 20 % of the MICTʼs budget (FJD 1.24 (FJD budget MICTʼs the of % 20 Allocate Infrastructure –provide necessary infrastructure to ensure business continuity Deregulate the telecommunication service providers Minimize negatives (geographical remoteness) and improve networks efficiency in flight Increase Research & Development Creation of Industry statistical data for Growth & Cost Reduction Capacity Development Developing sources of funding for Industry AV film-makers and the Sourcing Food supplies for Hotel Operators from Local Suppliers Promote ICT adoption as catalyst Promote ICT

• • • • • • • • • : Facilities that can be made available to the national export development effort such as databases, training facilities, training databases, as such effort development export national the to available made be can that Facilities : AUDIO VISUAL AUDIO TOURISM Institutional Assets Institutional testing facilities, plus institutional goodwill.

180 Support Agency Support Implementing Trade Trade Implementing ICT Industry players ICT MTT, MA, ME, MPUID, MTT, Police Tourism MH, MCI MFNP, MFAET, MA, ME, MPUID, MTT, Police Tourism MH, MCI MFNP, MFAET, MA, ME, MPUID, MTT, Police Tourism MH, USP FTIB Financial services providers/institutions PSC Scholarship Unit Board Affairs Fijian Fiji School of Medicine Fiji School of Nursing MA FHCL, FPL, Construction companies Institutional Assets Requirements Institutional $150,000 intake employment Increase in scholarship allocation additional to for medical cater to annually $3m by students Private Sector to take the lead role in setting standards for pre-requisite for Arable IT/BPO land Technology plots, Consistent supply Farm of logs/sawn to Hotel Construction companies FHCL, FPL equipment, timber by for such purposes Co-ordinative efforts for such purposes Co-ordinative efforts for such purposes Co-ordinative efforts Strategy Objectives Sourcing Food supplies for Hotel Strengthening Promoting Institutional Niche products for each Research to identify target markets, Create positive confidence perception in and IT/BPO Industry Encouraging the use of local materials local of use the Encouraging for the construction and decorations Maintaining Environment services and clients Investment in education globally Operators from Local Suppliers of tourism accommodation unit Sustainability Arrangements Region Initiatives designed to improve competitiveness and export performance, including duty drawback scheme, information Sector Tourism Financial Services Health Services ICT Programmes: dissemination programmes, export financing, credit & insurance development programmes schemes, matching grants, national branding programmes, cluster

181 Support Agency Support Support Agency Support Implementing Trade Trade Implementing Implementing Trade Trade Implementing SGʼs Office, Police, FAVC, FAVC, Police, Office, SGʼs MICT FAVCI, FIRCA, FAVC MFAET, FIRCA, FAVC MFAET, FAVC FIT, USP, TPAF, FAVC, Foreign Production companies, personnel FIRCA, MTT, MFNP, FIRCA MCI Personnel Requirements Export Programme Requirements Export Programme across sectors Incentives for local operators Review current incentives and applicability MFAET, FIRCA, FAVC personnel FIRCA, FAVC MFAET, personnel FAVC Personnel from FIT, USP, TPAF, FAVC, Foreign FAVC, TPAF, USP, FIT, from Personnel personnel FAVCI Office, Police, FAVC, SGʼs personnel FIRCA, FAVC MFAET, Production companies, personnel Strategy Objectives Strategy Objectives Facilitating simple tax-free import & equipment export of temporary film Securing favourable arrangements with other countries Raising in stakeholders AV film Competency of Level of Business raise the skills base in Industry the Industry production Legislative Framework to create a Business Environment conducive to Human Capital Development – To Promoting Local business ventures Tourism Participation in Increasing the number Outsourcing of Software process Development Companies Training & IT Sector Sector ICT Audio Visual Audio Personnel: Specifi cally the number of persons required to maintain/ improve public sector institutions

182 MFF, FHCL, FPL, MFF, MFF FIT, TPAF, MTT, MCI, MFAET, MTT, players Industry Players MOE MA, FIT School of MA, FIT Industry Hospitality, contractors & furniture companies management awareness, partner for capacity building purposes Labourers, Technical Expertise Technical Labourers, Personnel in FHCL, FPL, local logging Personnel for Training attachments, resource Technical Assistance from bi/multilateral Developing standards for all Tourism Developing standards for Tourism all Encouraging the use of local materials local of use the Encouraging for the construction and decorations Increasing Resource Owners Sourcing Food supplies for Hotel Operators from Local Suppliers of tourism accommodation units Participation Products Tourism

183