Fiji is an open economy generally classified as a middle-income country with a total population of 837,271 (2008 census) and a real gross domestic product (RGDP) per capita of FJ$6,246.22. The Fijian economy adopted policy changes after getting its independence in 1970. Economic policies during the early post-independence period (1970 to late 1980s) were based on import substitution, self-sufficiency, and extensive Government involvement in business.
Strong growth early in this period was followed by over a decade of low average growth. From the late 1980s Fiji switched to a more market-orientated, outward-looking development strategy, with an emphasis on trade liberalisation, deregulation, investment promotion and an increased role for the private sector. The ongoing commitment to the development of a more efficient, outward-looking economy requires the reduction or removal of well-established interventions, including tariffs, tax and customs exemptions, and incentives.
Following periods of low growth and investments hastened with political events in 1987, Fiji embarked on intensive trade liberalisation and adopted export-orientated growth policies aimed at improving operational efficiency and lowering cost for both private and public sectors. Aggressive trade reforms were further embraced in the 1990s following Fiji’s entry into the World Trade Organisation (WTO). Fiji continued to adopt an outward-looking approach to trade by lifting import restrictions and favouring export marketing and promotion. These reforms were being undertaken without a dedicated trade policy to guide Fiji’s trade with the rest of the world.
The Fijian economy is predominantly made up of services (70%), followed by the industry sector constituting 15% and the primary sectors (including agriculture, forestry and fisheries) representing 14%. Since independence in 1970, the Fijian economy has been growing at an average rate of 2.4 per cent until 1999. During the period 2000 to 2009, the economy had an average growth of 1.1%. The economic growth decline was partly caused by the spillover effects of the global slowdown, impacts of natural disasters and other structural impediments. Growth in the past decade was also constrained by external factors such as the reduction in sugar preferential prices and the erosion of tariff margins for textiles and clothing exports.
It is worth noting that the Fijian economy recovered strongly from the economic glooms of the past decade. The medium-term outlook looks very promising, and the economy has remained resilient due to sound government macroeconomic policies coupled with improvement in the general business environment for private sector growth.
As of 2014, the Fijian economy is experiencing one of the best growth cycles since independence and recorded its fifth year of consecutive growth from 2010 to 2014, which averaged around 3%. The growth of 4.6% in 2013 was the highest experienced by the Fijian economy since 2001. The growth rate for 2014 was 4.2% (provisional) against a forecasted growth rate of 3.8%.⁴.
(Source: Fijian Trade Policy Framework 2015-2025)