Catalog

Private Sector Assessment for Fiji Islands

Political and economic uncertainties in Fiji have created an environment of little business confidence. The economy is not growing at a rate sufficient to generate jobs and reduce poverty. Fiji is challenged by a difficult phase of structural change. The Fiji Government has committed to implement private sector friendly policies and structural reforms, as reflected in Government’s medium term Strategic Development Plan 2003-2005 (SDP). Based on a survey of businesses in Fiji, and a review of the existing private sector environment, ADB’s Private Sector Assessment for Fiji emphasizes the central role of the private sector in promoting the rapid economic growth that Fiji needs to create employment and prosperity. Specifically, the Report recommends priority areas for a private sector development agenda for Fiji, as follows:

• improve access to finance and further developing the domestic financial market
• accelerate State-owned enterprise (SOE) reform
• enhance infrastructure service provision through public-private partnerships
• modernize the commercial legal and regulatory framework
• address property rights issues, including the simplification of procedures to unlock land for productive and economic uses within a traditional landownership framework
• improve the tax and incentive system

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Contents

1. Executive Summary
1. Incentive and Tax Issues
2. State Owned Enterprises and Infrastructure
3. Land Issues
4. Legal and Regulatory Issues
5. Financial Market Issues
6. Reform Implementation
2. Introduction
3. Costs of Conducting Business In Fiji
1. Introduction
2. Fiji's Costly Business Environment
1. The Costs of Business Start-Up
2. The Costs of Running A Business
3. Incentive Issues
1. Introduction
2. Investment Incentives In Fiji
3. The Impact of Incentives On Investment
4. Other Incentive Distortions
4. Communication Between The Government and The Private Sector
5. Conclusions
4. State Ownership of Enterprise In Fiji
1. Introduction
2. SOE Characteristics
1. Poor SOE Performance
2. SOE Governance Issues
3. The Costs of State Ownership
4. What Is The Appropriate Role of The State In Ownership?
5. Options For Reform
6. Conclusions and Recommendations
5. Property Issues and Private Sector Development In Fiji Introduction
1. Property Rights and Private Sector Development
2. Property Rights Issues In Real Estate In Fiji
1. Different Property Rights and Interests In Real Estate In Fiji
2. Elements of Property Rights In Real Estate
6. Reform Recommendations
1. Undertake An Economic Assessment of The Laws and Regulations
2. Evaluate The Need For A Small Land Claims Procedures Law
3. Streamline Nltb Procedures
4. Introduce Court Reporting
5. Support Private Operation of Land Registries
6. Reform Alta
7. The Legal Framework For Business In Fiji
1. Introduction
2. An Overview of Legal Issues In Fiji
3. Pervasive Non-Legal Institutions In Fiji
4. Problems In Business Entry and Operation
1. Business Registration
2. Other Business Operation Licensing Requirements
5. Enforcement of Business Transactions
1. Arbitration
2. Enforcing Agreements Without Collateral
3. Enforcement of Claims With No Business Agreement
4. Bankruptcy
6. Consumer Protection
7. Reform Recommendations
1. Establish A Single Source Project For Business Registration and Licensing
2. Establish An Electronic Transactions Act
3. Support Arbitration
4. Enforce Awards Automatically Or Privately
5. Amend The Bankruptcy Law
6. Establish A Parliamentary Budget Authority
8. Summary of Legal Issues
8. Financial Markets
1. Introduction
2. Financial Sector Issues
3. Financial Market Institutions
1. The Fiji National Provident Fund (FNPF)
2. The Fiji Development Bank (FDB)
3. Fiji Investment Corporation (FIC)
4. Capital Market Development Authority (CMDA)
4. The Financial Market and Collateral Issues
1. The Need For Private Finance
2. The Benefits of An Appropriate Legal Framework For Debt Collection
3. The Economic Elements of A Sound Collateral Framework
4. Problems With Fiji's Collateral Framework
5. Unsecured Loans
5. Conclusions
9. Conclusions and Policy Recommendations
1. Incentive and Tax Issues
2. State Owned Enterprises and The Government's Role In The Economy
3. Land Issues
4. Legal and Regulatory Issues
5. Financial Market Issues
6. Reform Implementation
10. Summary Strategy For Implementing A PSD Agenda
11. Bibliography

Appendix A: Fiji Licensing Laws

Appendix B: Fiji's State-Owned Enterprises

Figures

Figure 1. Gdp Growth, Annual Percentage, 1970 - 2002

Figure 2. Comparative Gdp Per Capita, 2003

Figure 3. Comparative Data On The Number of Days To Start A Business

Figure 4. Comparative Cost To Start A Business

Figure 5. Gross Capital Formation (Annual % Growth)

Figure 6. Time To Enforce A Contract (Days)

Figure 7. Cost To Enforce A Contract (% of P.Income)

Figure 8. Time To Go Through Insolvency (Years)

Figure 9. Creditor Rights In Bankruptcy (Index, Scale 0 - 4)

Figure 10. Comparative Interest Rate Spreads

Figure 11. Comparative Domestic Credit To The Private Sector

Figure 12. Comparative Gross Capital Formation

Figure 13. Regional Comparison of Foreign Direct Investment

Figure 14. Market Capitalization of Listed Companies

Tables

Table 1. Telephone Costs

Table 2. Electricity Tariff Comparison Rates

Boxes

Box 1. A Flat Tax - Some Examples From Around The World

Box 2. Exchange Controls and Exchange Rate Policy