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Fiji Islands *Fiji’s military regime was suspended from the Councils of the Commonwealth on 8th December 2006 - Economy

KEY FACTS 2006

  • GNI: US$2.8bn
  • GNI pc: US$3,300
  • GDP growth: 3.3% p.a. 2002–06
  • Inflation: 2.7% p.a. 2002–06
  • Aid: 2.4% of GNI (2005)
  • External debt: US$231m (2005)

Overview: The Fijian economy is largely agricultural, and the main cash crop and export is sugar cane. Tourism is the largest foreign-exchange earner and clothing exports grew rapidly from the late 1980s. Other significant activities are gold-mining, fishing and timber production.

More than 80% of land is owned by ethnic Fijians, mainly by the local clans, or mataqali, and ownership by outsiders was prohibited from the late 19th century. Indo-Fijians were able to farm sugar cane under land lease arrangements. However, from the late 1990s, as leases came up for renewal, many landlords would only offer short leases at higher rents and many Indo-Fijian farmers have had to return the farms they have worked for many years to the owners.

Both sugar and tourism are vulnerable to the climate; hurricanes are relatively frequent and droughts can also cause problems, for example severe drought in 1997–98 was followed by cyclones and extensive flooding, and the islands were again devastated by Cyclone Ami in January 2003. Moreover tourists can be deterred by political instability.

Thus, economic growth has been uneven, with strong growth in years such as 1999 when the harvest is good and negative growth in years such as 2000 when the government was overthrown, some hotels were closed and tourist numbers fell sharply. After 2000, however, there were four years of good growth (4.1% in 2004), before a decline in clothing exports (due to ending of US market quotas at end 2004) caused much slower growth of 0.7% in 2005. This was exacerbated by the coup of 2006 where the tourism industry, a top revenue earner, experienced a similar decline – a 70% drop in visitors – to the period following the 2000 coup.

Trade: Main exports are clothing, sugar, fish products, gold and timber. Main imports are manufactured goods, machinery, vehicles, fuels and food. Main export partners are Australia, the USA and the UK. Main import partners are Australia and New Zealand.