Political uncertainty will deter investment in Fiji

Subject

The economic outlook for Fiji.

Significance

Fiji has returned to political stability and a degree of international legitimacy in recent years, albeit in a context of poor to moderate economic growth. GDP growth of 4.0 % is forecast for 2015, but the outlook for Fiji's main industries (tourism, gold and services) remains stagnant as aggregate regional demand for resources slumps and Fiji's comparative advantage as a regional services hub erodes.

Impacts

• The government will actively promote FDI to boost Fiji's lacklustre economic growth prospects.
• The government will promote agriculture and fisheries to provide opportunities for disadvantaged rural and ethnic populations.
• Foreign investment in tourism will probably increase slowly as demand from Asian countries grows.
• Fiji's dominance in the South Pacific economy will likely diminish as advances in ICT allow it to be bypassed.
• Ways must be found to prevent loss of trained and educated personnel if Fiji is to maintain its central role.