Economic Growth, Investment, Confidence and Poverty Reduction in Fiji: Semi-Rational Exuberance?

Abstract

The Fijian economy seems to be have made a sustained recovery since 2011 after the impact of the economic fallout from the December 2006 coup. However, the recovery may not be as great as is being forecast by the Reserve Bank of Fiji. Higher growth rates have mostly remained elusive, despite the well-intended policies of the government post-2006. The positive growth rates of 2011, 2012 and 2013 seem to be showing signs of an economy maintaining a path toward sustaining positive growth in the short to medium term, but a lot hinges on the political situation leading-up to the national elections in 2014. Credible national elections and a stable political climate will be important for Fiji’s future economic performance and for sustaining growth in the long term. Of equal importance will be a significant improvement in the performance of the civil service, greater macroeconomic stability and an enhanced business environment. Finally, the government should continue with structural reforms and should not deviate from the overall thrust of its economic policy, which emphasizes an export-oriented growth strategy.

Keywords: Fiji, Economic growth, investment, employment, poverty reduction

JEL Classification: E24, I30, O40