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Fiji faced a significant economic downturn after international tourism, the backbone of its economy, came to a virtual standstill during COVID-19. But in the short couple of years since travel restrictions were lifted, Fiji has witnessed a phenomenal rebound, with an economic growth rate of 8.6 per cent last year and a current year projection of 8 per cent.

The recovery seems to have gained pace with the change in government earlier this year.

Speaking at the 2023 Business Advantage Papua New Guinea Investment Conference in Brisbane recently, Investment Fiji CEO Kamal Chetty commended the Fiji government’s role in fostering stability and implementing investor-friendly policies.

‘Stability, coupled with initiatives like the economic summit, investment facilitation, and agency transformation, have been crucial in boosting investor confidence,’ he said.

The drive clearly comes from the highest levels of the new coalition government: in recent weeks two of Fiji’s three Deputy Prime Ministers were attending a major Fiji-focused business conference in Australia, while simultaneously, their third colleague was doing the same in New Zealand.

‘The fact that this conference has seen the highest number of attendees ever clearly reflects the interest in the new Fiji… it’s quite overwhelming,’ Deputy Prime Minister Manoa Kamikamica said in Sydney.

Tourism returns

Chetty acknowledges tourism’s pivotal role in Fiji’s economic resurgence.

The country is currently facing high demand for new hotel rooms (any business traveller knows how hard it is to find accommodation in Suva). Plans are afoot to add 5,000 new rooms. The government is also working on developing tourism on the second-largest island of Vanua Levu, which could realise its potential, were requisite tourism infrastructure built. Also on the wish list are medical, wellness and sports tourism.

Meanwhile, Fiji Airways, the country’s flag carrier, has contributed handsomely to the tourist influx. As well as sharp pricing, the airline has brought in a slew of wide-bodied long-haul jets, adding new services and destinations.

This strategy has resulted in Fiji positioning itself as a cost-effective stopover destination, with a mushrooming of budget transit accommodation around Nadi Airport. There has been a surge in numbers of New Zealand flyers transiting Fiji to travel to both the west coast of the United States and Asian destinations. Expanding operations in the Australian market, it has added Canberra, on top of additional flights from other cities.

Diversification

While tourism remains a cornerstone, Fiji is actively exploring opportunities in other sectors. Diversification is a key strategy for Fiji’s economic stability, says Chetty, and agriculture and manufacturing are among the sectors being explored. Chetty adds that there is a notable shift in investment patterns, where businesses are now looking to diversify their supply chains, presenting opportunities for Fiji to participate because of its location and cost-effective labour.

The country is already known as a back-office hub, and the government is working to capitalise on this reputation. It is actively seeking investors to support this growth, focusing on knowledge process outsourcing – which would be a timely move as the threat of artificial intelligence looms.

Fiji has also been in the forefront of adopting measures and policies to combat climate change. Chetty says green energy and technology are two areas that the government is keen to work with investors on.

Chetty also believes Fiji and Papua New Guinea could take a leadership role working together, with innovative institutional financing of projects around the region.

‘The optimism in Fiji is palpable,’ he adds, attributing this optimism to political stability and ‘a government that listens to the private sector.’

First appeared in Business Advantage September 2023
https://www.businessadvantagepng.com/fijis-economic-return-partly-due-to-government-that-listens-to-the-private-sector/