Location and People
Fiji Islands is located in the southern Pacific Ocean , east of Australia and about 1500 kilometers directly north of New Zealand . Some 110 of the country's 332 islands are inhabited. The two largest islands, Viti Levu and Vanua Levu , account for more than 85% of the country's 18,270 square kilometers of land area. The bigger islands are mostly volcanic, while the smaller ones are largely coral formations rising only a meter or so above sea level. The outer islands and atolls are particularly exposed to extreme climate and weather conditions such as droughts, floods, and hurricanes.
The 831,600 people of the Fiji Islands are from diverse backgrounds. Some 50% of the population belongs to the native Melanesian ethnic group, while around 45% are descendants of Indian contract laborers brought to the islands by the British in the 19th century. The remaining 5% are Europeans, Chinese, and other Pacific islanders.
While Fiji is a middle income country with a per capita income US$2,172 (2004), poverty remains a daily fact of life in Fiji . Although data on the incidence of hardship are mixed, over 25 % of the population has incomes below the basic needs poverty line. Patterns of poverty also differ widely between urban and rural areas. In towns, where incomes are higher, there are pockets of deep poverty among generally more prosperous households. In rural areas, average incomes are substantially lower and poverty is more widespread. Development indicators are highest for the capital of Suva and surrounding provinces, as well as the more remote outer islands that have benefited from relatively high levels of financial support over an extended period. Indicators in general are lower on the second largest island of Vanua Levu compared to the main island of Viti Levu . They are also usually lower in inland areas relative to coastal areas.
TopHistorical Background
After nearly a century of British colonization, Fiji Islands became an independent constitutional democracy in 1970. Democratic rule was disrupted by two military coups in 1987, however, sparked by perceptions that the Indian community was dominating government. A constitution favoring Melanesian control of the country was ratified in 1990.
In 1997, amendments were enacted making the constitution more equitable and paving the way for an elected government led by an Indo-Fijian in 1999. Another coup in May 2000, however, ushered in a period of political turmoil, economic decline, substantial job loss, and migration of skilled and professional workers.
Elections held in August 2001 provided Fiji Islands with a democratically elected government led by Prime Minister Laisenia Qarase.
Socio-Economic Conditions
Fiji Islands is rich in forest, mineral, and fish resources. Although around 70% of the labor force still depends on subsistence agriculture, tourism, sugar, clothing, copra, gold, silver, lumber, and cottage industries make the Fiji Islands economy one of the largest and most developed in the South Pacific. Industries centered on agriculture and natural resources account for about 30% of gross domestic product (GDP) and 70% of national exports.
Sugar cane production and processing utilizes 50% of arable land and accounts for one-third of industrial activity. The sugar industry also employs about 13% of the labor force, contributes directly 9% of GDP, and generates about 30% of exports. Sugar cane production has dropped because of prolonged drought, inefficiencies, and the non-renewal of land leases.
Crops other than sugar contribute only about 8% of GDP and about 11% of agricultural exports. Fisheries and forestry are the other two important natural resource sectors, contributing 4.9% and 2.5% of GDP, respectively.
Key Social and Poverty Indicators
| Indicators | 01 | 02 | 03 | 04 | 05 |
|---|---|---|---|---|---|
| Total population (000) | 815.2 | 825.8 | 832.7 | 838.5 | 846.9 |
| Annual pop. growth rate (%) | 0.6 | 1.3 | 0.8 | 0.7 | 1.0 |
| Pop. below poverty line (%) | | 39.5b | | | |
| Unemployment rate (%) | | 14.1b | | | |
| Maternal mortality rate (per 100,000 live births) | | 35.3 | | | |
| Infant mortality rate (per 1,000 live births) | | 17.8 | | | |
| Life expectancy at birth (years) | 69.7 | 67.3 | | | |
| Adult literacy rate (%) | 93.2 | | | | |
| Human development indexd | 0.754 | 0.758 | | | |
The tourist industry — with 300,000 to 400,000 visitors annually — has become a major source of economic growth and foreign exchange. Tourist arrivals increased sharply in 2004, fueling strong growth in construction and services.
Despite a moderate acceleration of economic growth in recent years, continuing political instability and inadequate investment has led to deterioration in the quality of life. Hardship and poverty have increased significantly, with new pockets of poverty emerging in urban squatter settlements and in rural areas. The ADB-supported participatory assessment of hardship estimated that the proportion of the population with incomes below the poverty line in 2002 stood at 40%, well up from the estimated 25% in 1990/91. The main priorities identified by the poor during the 2002 participatory assessment were access to jobs and income opportunities, and improvements in service delivery and infrastructure — particularly safe drinking water.
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Elderly Fisherman, 70 Years Old I am originally from Qamea Island off Taveuni in Cakaudrove. I am 70 years old and live with my wife and three teenage children in a one-room house at the Veiraisi Squatter Settlement. My brother-in-law, his wife, and a child also live here, as well as a distant relative, his wife, and a grandchild. Three families consisting of 11 members share the house, which has a floor area equivalent to the one room flat at PRB Flats (about 60 square meters or less). There is no water or electricity at the Veiraisi Settlement; we use a well for drinking and washing. None of my co-inhabitants have jobs. Instead, we plant root crops around the compound and go fishing daily. We earn cash by selling fish and marine products at the Nadera Road Junction. I go fishing twice a week and earn about F$20. The money is used to buy essential basic groceries such as sugar, salt, rice, flour, kerosene, and oil, which are often consumed within a day or two because there are many mouths to feed. I hope that the government can assist me with a boat to go out fishing more and also for water for my family. |
Country Outlook
Growth slowed in 2005, reflecting contraction in textile, mining, fishery, and timber sectors. While the sugar and textile industries face substantial adjustment pressures, the economy is likely grow in the medium term supported by the strong performance in tourism sector. Need for broad-based economic restructuring stems from the sizeable fiscal deficits that are causing continued expansion in domestic public debt and the consequent crowding-out of private sector investment and employment growth.
Some significant challenges remain to be tackled. Substantial reform measures are still required to improve the efficiency and performance of the public sector financial management, publicprivate partnerships, and state-owned enterprises; and to enhance productivity of the private sector, particularly through reduction in the cost of doing business. Imminent steps towards liberalization in the telecommunications sector and upgrading of the basic infrastructure would improve the contribution of these sectors to the overall economy. The outlook in the sugar industry is challenging, and to address the issue, the sugar industry targets rehabilitation of the sugar mills and improvement in the productivity of the cane growers operating efficiency, and implementing comprehensive sector reform plans, including transition to alternative sugar-based products, e.g. ethanol The garment industry will face challenges to remain viable and is likely to contract substantially unless niche markets can be developed. A longstanding uncertainty has related to how the Government reform land management and facilitate availability of land for investment, both domestic and foreign, to release the potential of the land in the growth areas, including agriculture and tourism. In the fisheries, license issuance to foreign fleets and over-fishing require an appropriate regulatory framework and efficient agencies with a capacity to facilitate stock management to mitigate adverse environmental and economic impacts. Public sector reform is also needed to lower the civil service wage bill, improve efficiency of public service delivery and eliminating crowding out the private sector in sectors that are attractive to the private sector investment.