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Annual Report 2002 : Pacific

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Fiji Islands

Economic performance

GDP growth in the Fiji Islands in 2002 was 4.4%, the second consecutive year of growth. Most sectors performed well, except for the sugar industry. Tourist arrivals grew by 12.9%, compared with the 18.3% growth in 2001.

Inflation averaged 0.9% in 2002. Merchandise exports increased in US dollar terms by 3.6% and imports by 9.8%. The overall balance of payments was in deficit.

The Government pursued an expansionary fiscal policy to stimulate economic growth. A net budget deficit of 7% of GDP was recorded in 2002. Total government debt:GDP ratio increased to 46%. Foreign reserves covered about 3.4 months of imports of goods and nonfactor services.

ADB operations

Operational strategy: ADB’s strategy is aimed at fostering good governance in the delivery of essential public services, by ensuring that appropriate institutional arrangements, tariffs, and regulatory framework are in place; by providing alternative livelihoods; and by resolving land issues. The strategy also aims at strengthening local capacity to formulate policies and implement reforms to increase accountability and responsiveness in key government departments, creating an enabling environment for private sector participation, and developing public-private partnerships in revenue-generating projects.

Policy dialogue: In 2002, policy dialogue with the Government focused on good governance; policy reforms pertaining to the sugar industry; cost recovery; and operation and maintenance in key sectors including transport and water and sanitation.

Loans and technical assistance: One loan of $16.8 million was approved in 2002 for port development. Four technical assistance of nearly $2 million were approved (see tables 1, 6, 24, and 25 in the Statistical Annex).

Project implementation: Since joining ADB in 1970, the Fiji Islands has received 14 loans totaling $177.9 million, of which 2 were active at the end of 2002. Contract awards during the year totaled $7.6 million, bringing cumulative contract awards to $146.4 million. The contract awards ratio for 2002 was 31.1%—higher than the ADB-wide average of 22.6%. Disbursements in 2002 totaled $4.5 million, bringing cumulative disbursements to $128.1 million. The disbursement ratio was 9.6%—lower than the ADB-wide average of 22.2% (see tables 14–23 in the Statistical Annex).

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