Fiji is on the rise but headwinds remain

·5-min read

Fiji is an idea waiting for a dollar.

The Pacific island nation, widely seen as the economic heart of the region, is not short of ideas to build its economy and transform the lives of its people.

Those ideas include television shows that deliver tangible health outcomes.

Community halls that double as marketplaces, emergency shelters and training centres.

A business turning what many nations consider pest fish into a rural tourism and food industry.

Exporting a high-quality version of the traditional drink kava through new manufacturing technology.

But there are many hurdles to the Pacific nation's growth, and ensuring that growth is shared evenly across its 300-plus islands.

Telecommunications is at an advanced level in the cities but hard to access or even non-existent in some remote regions.

Telstra's recent federal government-backed purchase of Digicel Pacific is widely expected to improve this in coming years.

Electricity is considered one of the major opportunities, currently dominated by hydro-power and oil-based generation, with small amounts also coming from wind and solar power, biomass from the timber industry and bagasse from the sugar industry.

Fiji is aiming to be 100 per cent renewables powered by 2036, but solar has been slow on the uptake with about half of all power generated from diesel, largely sourced from Singapore.

Electricity demand has risen by almost 20 per cent in the past four years, according to one study.

The Fiji national budget handed down last week forecast growth of 12.4 per cent this year, the highest on record, on the back of the devastation of COVID-19 and two cyclones Yasa and Ana.

Further growth of 9.2 per cent is expected for 2023, followed by five per cent for 2024.

The resumption of tourism in December 2021, as well as an influx of family reunion visitors, is playing a large part in the optimistic forecasts.

The outlook is predicated on the assumption that visitor arrivals will reach close to 55 per cent of pre-pandemic arrivals this year.

Tourism accounts for roughly 40 per cent of Fiji's gross domestic product, both directly and indirectly.

To June, total visitor arrivals were 205,529 - a 36-fold increase relative to the same period last year, and about 50 per cent of pre-pandemic levels.

Australian visitors have recovered to about 97 per cent of pre-pandemic levels, with more marketing expected to boost numbers in the coming months.

For 2022, tourism earnings are forecast to rebound to $F1.4 billion (about $A920 million), heading to $F2 billion (about $A1.3 billion) in 2023 and $F2.4 billion (about $A1.6 billion) the year after based on larger numbers and bigger spending.

The budget papers show new lending by commercial banks for investment purposes increased by 89.2 per cent cumulative to May.

But the government notes: "The rising costs of labour and construction materials, ongoing global supply disruptions and the general uncertainty associated with international and domestic developments may impede investment activity to some extent."

The Bainimarama government, which faces an election by January, is seeking to diversify the economy by looking at new incentives for foreign investment in sectors such as call centres, agribusiness and medical tourism, and securing new markets for high-potential agriculture exports.

The $A53.5 million joint Australia-New Zealand funded Pacific Horticultural and Agricultural Markets Access Program is supporting businesses such as Green Gold Kava to get its ground kava into the export market.

As well, the Australian Centre for International Agricultural Research is supporting a number of projects to boost food production, make plants more tolerant to a warming climate, and conserve the region's crop and tree genetic resources.

Remittances are also playing a major role in the Fiji economy, with Australia's Pacific labour mobility scheme a popular program.

The high demand for Fijian workers in Australia and NZ is seeing remittances projected to grow by 11 per cent to $F934.7 million (about $A614 million) by year-end.

There are some big challenges ahead for Fiji.

Labor senator Jess Walsh, who took part in an Australian Regional Leadership Initiative visit to Fiji this week, said it was beyond doubt climate change was the biggest challenge facing the country.

"We heard it from day one from the Pacific Islands Forum leadership, and we heard it right through to the end of the trip from local village leaders who were seeing their communities living in tents after Cyclone Yasa (in 2020)", she told AAP.

"And they made it clear to us they were not cyclone refugees - they were climate refugees."

She said women's projects were impressive, boosting women's leadership and economic security.

"We saw real progress on that front here," she said during the Save the Children Australia-backed visit.

Nationals Deputy Leader Perin Davey said she had witnessed "how far a dollar can stretch" in terms of Australia's government and non-government development assistance.

"The return on investment, not in monetary value but in the impact on peoples' lives, is far beyond what people in Australia would even imagine," she said.

She gave the example of one Fijian whose village had been destroyed by Cyclone Yasa in December 2020, but with the help of $A300 from the Australian Humanitarian Partnership set up his own barber shop.

"That's true development - he doesn't need to put his hand out again because he's got a job."

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