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World > Oceania > Fiji > Economy (Notes)

Fiji - Economy (Notes)


ECONOMY
Fiji is one of the more developed of the Pacific island economies, although it remains a developing country with a large subsistence agriculture sector. For many years sugar and textile exports drove Fiji's economy. However, neither industry is competing effectively in globalized markets. Fiji's sugar industry suffers from quality concerns, poor administration, and the phasing out of a preferential price agreement with the European Union beginning in 2006/2007. The European Union has promised a large amount of financial aid to assist the ailing sugar industry, but, post-coup, has clarified that the aid will only be forthcoming if Fiji cleans up its human rights situation and moves quickly to democracy.

In 2005, the textile industry in Fiji markedly declined following the end of the quota system under the Agreement on Textiles and Clothing (ATC) and the full integration of textiles into WTO General Agreement on Trade and Tariffs. The income from garments plummeted by 43% in 2005 with the end of the ATC quotas. Garments now account for approximately 12% of Fiji's exports and sugar approximately 24%. Other important export crops include coconuts and ginger, although production levels of both are declining. Fiji has extensive mahogany timber reserves, which are only now being exploited. Fishing is an important export and local food source.

Gold is also exported. However, in December 2006, gold mining ceased when Fiji's biggest mine, the Vatukuola Emperor gold mine, closed. The mine changed ownership in March 2007, and there are some indications that it could be operational again before the end of 2007.

The most important manufacturing activities are the processing of sugar and fish. Since 2000 the export of still mineral water, mainly to the United States, has expanded rapidly. By the end of 2006, water exports totaled around U.S. $52 million per year, an increase of 28% over 2005 and an increase of 775% since 2000.

Recent estimates for 2005 show a GDP growth rate of 1.7%. The estimate for 2007 is minus 2.5%.

In recent years, growth in Fiji has been largely driven by a strong tourism industry. Tourism has expanded rapidly since the early 1980s and is the leading economic activity in the islands. Approximately 550,000 people visited Fiji in 2005. However, the December 2006 coup caused a major drop-off in tourist arrivals. The tourism industry responded by introducing cut-rate packages, but even with the discounts there were only 25,000 tourist arrivals in January 2007 as compared to 40,000 in January 2006. The economic downturn has caused thousands to lose their jobs, especially casual or seasonal workers in the tourist industry.

About one-third of Fiji's visitors come from Australia, with large contingents also coming from New Zealand, the United States, the United Kingdom, and Japan. In 2005, more than 70,000, or around 13%, of the tourists were American, a number that has steadily increased since the start of regularly scheduled nonstop air service from Los Angeles. In 2004, Fiji's gross earnings from tourism were about $418 million, an amount double the revenue from its two largest goods exports (sugar and garments). Gross earnings from tourism continue to be Fiji's major source of foreign currency.

Fiji runs a persistently large trade deficit, F$1.94 billion (U.S. $1.17 billion) for 2006, although tourism revenues yield a services surplus. Australia accounts for between 25% and 35% of Fiji's foods trade, with New Zealand, Singapore, the United States, the United Kingdom, and Japan varying year-by-year between 5% and 20% each. Since the 1960s, Fiji has had a high rate of emigration, particularly of Indo-Fijians in search of better economic opportunities. This has been particularly true of persons with education and skills. The economic and political uncertainties following the coups have added to the outward flow by persons of all ethnic groups. In recent years, indigenous Fijians also have begun to emigrate in large numbers, often to seek employment as home health care workers. Remittances from overseas workers, often undocumented, are second only to tourism as a source of foreign exchange earnings. ''Fiji is also attempting to brand itself as a potential movie-filming site and has been the location of a small number of feature films.


Facts at a Glance: Geography - People - Government - Economy - Communications - Transportation - Military - Climate - Current Time - Ranking Positions - Fiji Dollar Exchange Rates
Notes and Commentary: People - Economy - Government and Political Conditions - Historical Highlights - Foreign Relations - Relations with U.S.



Facts at a Glance
Geography
People
Government
Economy
Communications
Transportation
Military
Climate
Current Time
Ranking Positions
Fiji Dollar Exchange Rates


Notes and Commentary
People
Economy
Government and Political Conditions
Historical Highlights
Foreign Relations
Relations with U.S.





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