Fiji

Politics:

• Analysis

  Fiji politics: Quick View - Charter change creates concern about return to

  Event

  A new decree scrapping the requirement for public consultation on the draft constitution has attracted widespread criticism.

  Analysis

  The independent Constitution Commission, which is responsible for overseeing the process of constitutional reform, has in recent months been conducting public consultations on what should be included in the new constitution. The next stage in the process is the drafting of the new constitution by the commission, following which the document will be debated by a government-appointed Constituent Assembly in the first quarter of 2013.

  However, a decree issued by the government in early November removes the requirement for the Constitution Commission to present the constitution to the public, and instead compels it to hand the document directly to the recently reappointed president, Ratu Epeli Nailatikau. The decree has been condemned by opposition politicians, NGOs, trade unions and civil-society groups. The commission's chairman, Yash Ghai, believes that the amendments represent a significant change to the process and that the government's decision to alter the process at so late a stage is unfair. Meanwhile, the leader of the opposition Fiji Labour Party, Mahendra Chaudhry, a head of government, claims that the change reflects the desire of the prime minister, Commodore Voreqe "Frank" Bainimarama, to end debate on some of the more controversial "non-negotiable" elements that he has insisted must be included in the new charter. These include a provision granting broad immunity from prosecution to those who have participated in coups.

  The new decree also stipulates that the Constitution Commission must henceforth publish in the newspapers a list of its staff and consultants and details of their remuneration. This follows the latest of many spats between the prime minister and Mr Ghai, this time over the commission's employment of a former vice-president, Ratu Joni Madraiwiwi, a high-profile lawyer, who was removed from office by Commodore Bainimarama following the 2006 coup. The prime minister claims that engaging the services of Ratu Madraiwiwi compromises the neutrality of the commission, as he was part of a delegation that made a public submission to the body calling for the institution of a Christian state. (One of the non-negotiable principles that the government has said must be included in the rewritten constitution is that Fiji be a secular state.)

  November 19, 2012

• Background

  Fiji: Key figures

  Voreqe (Frank) Bainimarama

  Interim prime minister and commander of the military, who led the December 2006 coup.

  Laisenia Qarase

  The leader of the Soqosoqo Duavata ni Lewenivanua (United Fiji Party). A former prime minister who was deposed in the 2006 coup.

  Mahendra Chaudhry

  Leader of the Fiji Labour Party. Prime minister from May 1999 until May 2000, when he was deposed in a coup.

  August 27, 2008

• Structure

  Fiji: Political structure

  Official name

  Republic of Fiji Islands

  Form of state

  Parliamentary democracy. However, the constitution was abrogated in April 2009

  The executive

  The president appoints the prime minister, who selects the cabinet

  Head of state

  The president, Ratu Epeli Nailatikau

  National legislature

  Under the 1997 constitution (currently abrogated), a bicameral parliament comprising an appointed upper house, the Senate (with 32 members), and an elected lower house, the House of Representatives (with 71 members). The majority of seats were allocated on the basis of ethnicity. There was universal suffrage for citizens aged over 21

  Regional government

  A total of 14 provincial administrations for indigenous Fijians are overseen by the Fijian Affairs Board. The island of Rotuma also has its own council. Until 2008 cities and towns were run by municipal councils, which were open to members of all races and were overseen by the Ministry of Labour, Industrial Relations, Employment, Local Government, Urban Development and Housing. All councils were dissolved in December 2008, and at present municipalities are run by administrators

  Legal system

  Magistrates courts, High Court and Court of Appeal, presided over by the Supreme Court

  National elections

  Last held in 2006. The current government was appointed in January 2007, following a military coup. The next general election is due to be held in 2014

  Main political parties

  Soqosoqo Duavata ni Lewenivanua/United Fiji Party (SDL); Fiji Labour Party (FLP); National Federation Party (NFP); National Alliance Party of Fiji (NAPF); United People's Party (UPP); Party of National Unity (PANU); Nationalist Vanua Tako Lavo Party (NVTLP)

  National government

  Interim government headed by the prime minister, Voreqe (Frank) Bainimarama. In December 2006 Commodore Bainimarama deposed the government of Laisenia Qarase, which had been elected in May of that year

  Key ministers

  Prime minister, minister for finance & national planning, sugar, public service, charter change, information, provincial affairs, indigenous & multi-ethnic affairs, lands & mineral resources: Voreqe (Frank) Bainimarama

  Attorney-general, minister for justice, electoral reform, public enterprises & anti-corruption, industry, tourism, trade & communications: Aiyaz Sayed-Khaiyum

  Foreign affairs, civil aviation, international co-operation: Inoke Kubuabola

  Primary industries, defence (acting), national security (acting), immigration (acting): Joketani Cokanasiga

  Central bank governor

  Barry Whiteside

  October 10, 2012

Economy:

• Background

  Fiji: Economic background

  Gross domestic product by sector
  (F$ m; current prices)
  	2002	2003	2004	2005	2006
  Agriculture, forestry & fishing	533.7	545.8	579.6	615.9	615.7
  Mining & quarrying	32.3	35.8	46.3	35.1	24.1
  Manufacturing	519.2	511.3	598.7	563.0	656.1
  Electricity & water	102.1	106.2	111.6	113.1	122.3
  Construction	144.3	160.3	170.9	228.6	265.4
  Wholesale & retail trade, restaurants & hotels	590.2	639.3	788.5	846.7	926.9
  Transport & communications	574.4	639.7	625.4	742.3	729.8
  Finance & insurance	443.2	429.6	443.7	461.8	670.7
  Community, social & personal services	661.0	738.3	754.1	820.0	926.7
  Imputed bank service charges	-116.3	-109.4	-129.3	-188.6	-289.8
  Total	3,485.0	3,696.9	3,989.5	4,237.9	4,647.7
  Source: Fiji Islands Bureau of Statistics.

  Download text file (csv format)

  The tourism industry has declined substantially since the 2006 coup. The political repercussions of the coup and associated warnings issued by foreign governments concerning travel to Fiji continue to affect tourist arrivals, and post-coup discounting has meant that recovery in the numbers visiting Fiji's shores does not translate into greatly improved earnings. The garment industry has suffered from the declining value of concessional arrangements. As a result, many foreign-owned garment factories have closed in recent years, and employment in the industry has dropped.

  August 27, 2008

• Structure

  Fiji: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011b	2012b
  GDP at market prices (F$ bn)	5.7	5.6	6.1	6.8	8.1
  GDP (US$ bn)	3.6	2.9	3.2	3.8	4.5
  Real GDP growth (%)	1.2	-1.3	-0.2	2.0	2.3
  Consumer price inflation (av; %)	7.7	3.7	5.5	8.5a	4.7
  Population (m)	0.8	0.9	0.9	0.9	0.9
  Exports of goods fob (US$ m)	871.9	625.9	819.5	901.5	991.6
  Imports of goods fob (US$ m)	-2,056.2	-1,300.9	-1,601.5	-1,761.7	-1,937.8
  Current-account balance (US$ m)	-652.8	-238.2	-416.0	-428.8	-493.4
  Foreign-exchange reserves excl gold (US$ m)	321.5	569.1	719.4	832.2a	1,005.8
  Total external debt (US$ m)	379.5	236.9b	251.1b	259.1	268.0
  Debt-service ratio, paid (%)	14.5	322.0b	8.2b	11.1	12.2
  Exchange rate (av) F$:US$	1.59	1.96	1.92	1.79a	1.79
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2009	% of total	Components of gross domestic product 2009	% of total
  Finance	17.9	Private consumption	73.9
  Trade	17.3	Government consumption	17.8
  Public Administration	16.4	Fixed investment	19.2
  Manufacturing	15.2	Stockbuilding	2.5
  Transport & communications	15.2	Exports of goods & services	48.3
  Agriculture	13.4	Imports of goods & services	61.7
  Principal exports 2007	F$ m	Principal imports 2007	F$ m
  Food, beverages, spirits & tobacco	391.6	Mineral fuels	977.0
  Mineral products	297.4	Machinery & transport equipment	580.5
  Live animals & animal products	115.7	Food	449.7
  Textiles	112.8	Textiles	153.2
  Vegetable products	61.7	Miscellaneous manufactured articles	47.0
  Main destinations of exports 2010	% of total	Main origins of imports 2010	% of total
  US	24.1	Singapore	26.6
  Australia	19.2	Australia	18.9
  Samoa	8.6	New Zealand	14.8
  Tonga	7.5	China	7.4
  Japan	7.3	Thailand	4.1

  Download the numbers in Excel

  Download text file (csv format)

  October 10, 2012

• Outlook

  Fiji: Country outlook

  Fiji: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: More than three years after the abrogation of the democratic constitution by the then president, Josefa Iloilo, Fiji's prime minister, Commodore Voreqe (Frank) Bainimarama, appears as determined as ever to hold on to power. The Economist Intelligence Unit expects Commodore Bainimarama to remain impervious to foreign pressure to hold the long-delayed parliamentary election any earlier than his chosen date of September 2014. Fiji's neighbours, led by Australia and New Zealand, will continue with their new policy of attempting to encourage a return to democracy using the carrot of institutional support rather than the stick of international isolation. Economic growth will remain consistent in the 2013-14 forecast period, at an average of 2.2% a year. The Reserve Bank of Fiji (the central bank) will continue to keep monetary policy very loose in a bid to encourage consumer spending. Policy tightening will not begin until mid-2013 at the earliest. In 2013-14 we expect consumer price inflation to remain at a similar level to its estimated average in 2012 of 4.7%.

  DOMESTIC POLITICS: More than three years have passed since the abrogation of the democratic constitution in 2009 by Mr Iloilo and Commodore Bainimarama appears as determined as ever to hold on to power. Commodore Bainimarama, who deposed the elected prime minister, Laisenia Qarase, in a coup in 2006 before assuming the post himself, has pushed back by five years (to September 2014) the date by which a general election is to be held. After the abrogation of the constitution, emergency regulations were imposed, restricting civil liberties and giving extensive powers to the security forces. These were lifted in early 2012, but were replaced by an updated version of the Public Order Act 1969, which has in effect enshrined the emergency regulations in law. The bureaucracy has been purged of anti-coup figures, and supporters of the prime minister have been appointed as replacements. Commodore Bainimarama has also been successful in taming Fiji's powerful Methodist church and, more recently, the country's trade unions. The reinstatement in June 2012 of the right of civil society groups to hold public meetings is likely to prove little more than a token measure, as the security forces' control over political activity will remain extensive. However, despite the appearance of political stability (owing to the fact that few people are prepared to challenge the prime minister publicly), tensions persist. Commodore Bainimarama's intransigence will remain a continuing feature of Fiji's political scene in the run-up to the planned election in 2014, but outbreaks of serious unrest are unlikely. We believe that Commodore Bainimarama will hold firm to his decision to delay the next election until 2014. There are also doubts about whether the poll, when it happens, will be free and fair.

  INTERNATIONAL RELATIONS: Fiji's relations with its main trading partners and its regional neighbours will be testy in 2013-14. Australia and New Zealand, which have spent years unsuccessfully attempting to exert economic and diplomatic pressure on the government, changed tack in mid-2012 and announced the resumption of full diplomatic relations. The two countries will now hope to influence Fiji's return to democracy by using the carrot of institutional support rather than the stick of international isolation. However, Fiji will remain suspended from the 16-member Pacific Islands Forum (PIF, the region's main political grouping). At the PIF's annual summit in August, the body's members extended Fiji's suspension until after the country has held an election. Fiji will also remain outside the Commonwealth. That organisation has withheld aid and imposed travel bans on Fijian military personnel and people who have accepted appointments under the current regime. The EU has withheld funds intended to facilitate the restructuring of Fiji's sugar industry as it adjusts to the ending of European price subsidies. In June 2012 the foreign minister, Inoke Kubuabola, appealed to the EU and the European Commission to restart support for the industry. A deal was subsequently signed between the EU and the Secretariat of the Pacific Community (of which Fiji is a member) to disburse some assistance, but the funds released do not compare to those lost in recent years.

  POLICY TRENDS: The government has ambitious goals for economic reform, including boosting GDP, carrying out land reform and eliminating the current-account deficit. However, the high level of public debt means that the government is under pressure to reduce the size of the public sector, and only limited progress towards this objective has been made so far. Fiji remains a highly unpredictable destination for foreign investment. Legislation passed in 2010 outlawed ownership of media organisations by foreigners, and a large US-owned producer of mineral water, Fiji Water, was hit by a huge rise in the water resource rent tax in the 2011 budget. We estimate that a hefty fiscal deficit was recorded in 2011 and that the budget will remain in the red this year. The budget for 2012 nevertheless outlined substantial changes to the tax regime that will have an impact on the public finances in 2013-14. Income tax, particularly for those on low rates of pay, has been slashed. The government is financing this measure through increases in a number of indirect taxes, and believes that the industries affected by these tax rises will be able to cope. The budget aims to achieve a substantial reduction in the fiscal deficit, to the equivalent of 1.9% of GDP, despite another rise in spending. We believe that the authorities will fail to achieve this target, particularly as flooding in early 2012 necessitated additional, emergency spending. We estimate the budget deficit this year at the equivalent of 3.9% of GDP, and forecast that the deficit will remain fairly large in 2013-14, at an average of 3.7% of GDP.

  ECONOMIC GROWTH: We estimate that real GDP grew by an estimated 2% in 2011 and that it will expand by 2.3% in 2012. If these growth rates are confirmed, they would represent the Fijian economy's strongest performance since 2006. The economy has shown greater resilience this year: faster growth in private consumption (thanks to tax cuts and low interest rates) and in government spending (owing to post-flood reconstruction) has helped to offset unexpectedly weak growth in tourism owing to damage to tourism areas, the international airport and to infrastructure, as well as agriculture, as a result of flooding earlier in the year. In 2013-14 the economy will be buoyed by the continued development of the mining sector, although the sugar industry will remain in the doldrums. The prices paid for sugar by the EU under its Cotonou Agreement with African, Caribbean and Pacific countries will continue to decline rapidly, and almost all aid that would otherwise have been provided to Fiji by the EU to smooth the transition to lower prices will be withheld because of Commodore Bainimarama's refusal to hold elections. The outlook for the country's tourism industry is more encouraging. Air services have become more frequent, but competition for tourists among Pacific island nations is rising, and the local industry is vulnerable to travel warnings from the Australian and New Zealand governments whenever political instability increases. Continued growth in tourist numbers is nevertheless likely, provided that the political situation remains calm. Persistently high global oil prices, the effects of public-sector pay rises and higher domestic prices resulting from the flooding will keep inflation at 4.7% this year. In 2013-14 inflation will remain around the same level. The country will remain vulnerable to swings in the rate of inflation generated by global movements in commodity prices, as Fiji imports much of its food and fuel. The government recently opened a second large hydroelectric power station, and this is likely to result in a drop in imports of fuel, in turn bringing down imported inflation.

  EXTERNAL ACCOUNT: Despite the government's attempts to eliminate the shortfall on the current account, Fiji will continue to run a large deficit in 2013-14 owing to the substantial deficit on the merchandise trade account. In the first half of 2011 (latest available data) the trade deficit narrowed slightly year on year, to F$918m (US$510m), as export growth easily outpaced that in imports. The support lent to the trade balance by high gold prices in 2011-12 is unlikely to be sustained in 2013-14. We expect gold prices to fall from an estimated average of US$1,682/troy oz in 2012 to US$1,596/troy oz in 2013 and US$1,125/troy oz in 2014, as the global economic recovery will spur investors to explore riskier asset classes. Furthermore, a deterioration in Fiji's overall terms of trade, reflecting lower EU prices for the country's sugar, will continue to weigh on the foreign payments position. External financing difficulties will remain a risk.

  October 11, 2012

View detailed map

Country Briefing

Land area

18,333 sq km

Population

860,623 (2010 World Bank estimate)

Major islands

Viti Levu (10,429 sq km), Vanua Levu (5,556 sq km)

Capital

Suva (population, including Nasinu: 172,948 at 2007 census)

Climate

Tropical

Weather in Suva (altitude 6 metres)

Hottest months January-March, 23-30°C (average daily minimum and maximum); coldest months July-August, 20-26°C; driest month July, 124 mm average rainfall; wettest month March, 368 mm average rainfall

Languages

English, Fijian and Hindi

Measures

Metric

Currency

Fiji dollar (F$); F$1 = 100 cents. Average exchange rate in 2011: F$1.79:US$1

Fiscal year

Calendar year

Time

12 hours ahead of GMT

Public holidays

January 2nd (New Year's Day holiday); February 6th (Prophet Mohammed's Birthday); April 6th (Good Friday); April 7th (Easter Saturday); April 9th (Easter Monday); June 11th (Queen's Birthday); October 10th (Fiji Day); November 13th (Diwali); December 25th (Christmas Day); December 26th (Boxing Day)

July 03, 2012