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Country Report Country Report Fiji September 2006 The Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where the latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 26 Red Lion Square The Economist Building 60/F, Central Plaza London 111 West 57th Street 18 Harbour Road WC1R 4HQ New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7576 8000 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7576 8500 Fax: (1.212) 586 0248 Fax: (852) 2802 7638 E-mail: london@eiu.com E-mail: newyork@eiu.com E-mail: hongkong@eiu.com Website: www.eiu.com Electronic delivery This publication can be viewed by subscribing online at www.store.eiu.com Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, online databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office Copyright © 2006 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it. Symbols for tables "n/a" means not available; "–" means not applicable Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK. Fiji 1 Contents Fiji 2 Summary 3 Political structure 4 Economic structure 4 Annual indicators 5 Quarterly indicators 6 Outlook for 2006-07 7 The political scene 9 Economic policy 11 The domestic economy 12 Foreign trade and payments The region 13 Summary 14 Outlook for 2006-07 15 The political scene 17 Economic policy and the domestic economy List of figures 7 Fiji: gross domestic product 7 Fiji: consumer price inflation Country Report September 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 2 Fiji Fiji September 2006 Summary Outlook for 2006-07 The multi-party government will stagger on for some time, as no one organisation will wish to be seen as the precipitator of a cabinet collapse. Recent ructions within the Fiji Labour Party (FLP) may lead to change in the party!s upper echelons, although the FLP!s leader, Mahendra Chaudhry, still appears to have a firm grip on the situation. The economy will remain in the doldrums for at least the next two years as fiscal policy is overhauled. The Reserve Bank of Fiji (the central bank) forecasts growth of just 2.7% this year. The political scene The new 36-member cabinet has been accused of being too big, particularly in the context of government attempts to cut spending. Operating guidelines for the cabinet will soon be approved. A rift in the FLP has led to a challenge to Mr Chaudhry!s leadership. A revised version of the controversial Unity bill is due to be submitted to parliament. Relations between the military and the government have improved. A corruption scandal has emerged in connection with funding for the South Pacific Games in 2003. Fiji!s human rights commission has condemned the affirmative action programmes of the prime minister, Laisenia Qarase. Economic policy The Ministry of Finance has announced the main targets for a new five-year plan to run from 2007 to 2011. There has been speculation about a possible Fiji dollar devaluation. A number of major changes to public spending are necessary if the economy, currently burdened with debt, is to make any kind of recovery. Moves by the government to privatise Fiji!s water supply have been met with resistance by local non-governmental organisations. The domestic economy The government will be obliged to keep borrowing in order to cover capital expenditure costs, despite already high levels of debt. The telecommunications sector is set to benefit from price cuts, and the UK-based telecoms company, Vodafone, is expanding its network across the islands. The government is looking to engineer a revival in the rice industry in order to ease pressure on the trade deficit. The dangers of emissions from Fiji!s vehicles have been highlighted, as moves are made towards implementing national fuel standards. Foreign trade and payments The Chinese foreign minister, Li Zhaoxing, paid a visit in August and signed a grant worth US$1.26m to further economic co-operation between the two countries, apparently in return for Fiji!s political support for the !one-China! policy. Editors: Graham Richardson (editor); Gerard Walsh (consulting editor) Editorial closing date: August 17th 2006 All queries: Tel: (44.20) 7576 8000 E-mail: london@eiu.com Next report: Full schedule on www.eiu.com/schedule Country Report September 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 Fiji 3 Political structure Official name Republic of Fiji Islands Form of state Parliamentary The executive The president, appointed by the Great Council of Chiefs (Bose Levu Vakaturaga), appoints the prime minister, who selects the cabinet Head of state The president, Ratu Josefa Iloilo National legislature Bicameral parliament comprising an appointed upper house, the Senate (32 members), and an elected lower house, the House of Representatives (71 members). The 1997 constitution prevented the dominance of parliament by indigenous Fijians and abolished the requirement that the prime minister be an indigenous Fijian. There is universal suffrage for citizens aged over 21. Voting is compulsory and preferential Regional government Local administration is on a divisional basis, with separate councils for urban areas. There is a separate local government system for the indigenous Fijian population Legal system Magistrates! courts, High Court and Court of Appeal, presided over by the Supreme Court National elections Held four months early in May 2006; next election due 2011 Main political parties Soqosoqo Duavata ni Lewenivanua (SDL, People!s Unity Party); Fiji Labour Party (FLP); People!s United Party (PUP); Matanitu Vanua (MV, Conservative Alliance); National Labour Unity Party (NLUP); National Federation Party (NFP); United General Party (UGP); National Alliance (NA) National government On May 18th 2006 Laisenia Qarase, the leader of the SDL, was re-appointed prime minister. In an unprecedented move, he expanded the cabinet to include nine FLP members alongside 27 SDL members. Prime minister & minister for sugar & investment Laisenia Qarase Key ministers Agriculture Gyani Nand Commerce & industry Adi Sivia Qoro Education Ro Teimumu Kepa Energy & mineral resources Lekh Ram Vayeshnoi Environment Poseci Bune Fijian affairs, lands & provincial development Ratu Naiqama Lalabalavu Fisheries & forests Itaitia Tuisese Finance & national planning Ratu Jone Kubuabola Foreign affairs & external trade Kaliopate Tavola Home affairs &immigration Josefa Vosanibola Information & communications Isireli Lewenigila Justice Qoriniasi Bale Labour & industrial relations Krishna Datt Local government & urban development Chaitanya Lakshman Multi-ethnic affairs & national reconciliation Ratu Meli Saukuru Public enterprises & public-sector reform Savenaca Draunidalo Public utilities & infrastructure development Robin Irwin Provincial development & disaster management Ted Young To u r i s m & t ra n s p o r t Tomasi Vuetilovani Women, social welfare & poverty alleviation George Shiu Raj Central bank governor Savenaca Narube Country Report September 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 4 Fiji Economic structure Annual indicators 2001a 2002a 2003a 2004a 2005a GDP at current prices (F$ m; at factor cost)b 3,835.8 3969.3 4,396.3 4,674.0 n/a Real GDP growth (av; %)c 2.7 4.3 3.0 4.1 0.7 Consumer price inflation (av; %)c 2.3 1.6 4.2 3.3 2.7 Population (m)d 0.82 0.83 0.83 0.84 n/a Exports fob (US$ m)b 538 546 671 678 691 Imports cif (US$ m)b 794 893 1,168 1,272 1,610 Current-account balance (US$ m)b 16 48 -4 -34 n/a Reserves excl gold (US$ m)d 366.4 358.8 423.6 478.1 314.7 Total external debt (US$ m)b 228 229 246 267 n/a Debt-service ratio, paid (%)b 3.4 3.4 3.1 3.1 n/a Exchange rate (av; F$:US$)d 2.277 2.187 1.896 1.733 1.691 a Actual. b Asian Development Bank. c Reserve Bank of Fiji, Quarterly Review. d IMF, International Financial Statistics. Origins of gross domestic product 2005a % of total Components of gross domestic product 2001b % of total Agriculture, forestry & fishing 15.8 Private consumption 57.0 Mining & quarrying 1.0 Government consumption 17.1 Manufacturing 14.5 Fixed investment 14.5 Construction 6.0 Stockbuilding 1.0 Electricity & water 3.8 Exports of goods & services 55.7 Transport & communications 14.2 Imports of goods & services -60.7 Wholesale & retail trade, restaurants & hotels 17.9 Statistical discrepancy 15.4 Other services 30.5 Principal exports 2005c F$ m Principal imports 2005c F$ m Sugar 217.9 Mineral fuels 784.1 Garments 120.4 Machinery & transport equipment 591.1 Fish 82.9 Manufactured goods 452.2 Gold 59.3 Food 355.5 Timber 9.9 Miscellaneous manufactured articles 264.0 Main destinations of exports 2005c % of total Main origins of imports 2005c % of total Australia 20.3 Singapore 29.9 Singapore 20.3 Australia 24.6 US 15.5 New Zealand 18.0 UK 15.1 Japan 4.2 Pacific Islands 8.6 US 3.8 a Fiji Islands Bureau of Statistics b Asian Development Bank.
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