June 6, 2008

Fiji growth ‘at bottom of HDI pile’

Fiji growth ‘at bottom of HDI pile’
Productivity growth in Fiji has averaged 1 per cent over the ten year period from 1996 to 2006 which when compared to other countries is somewhere at the bottom of the pile, Reserve Bank of Fiji governor Savenaca Narube warned.And he said that with Fiji slipping in world rankings in the United Nation’s Human Development Index (HDI ) (Fiji, at 92, is about halfway on the ladder), in economic performance and in the ease of doing business among other things, he said Fiji has a lot of catching up to do with other countries. He suggested that productivity could contribute to solving Fiji’s problems.Speaking at a Productivity Symposium at the Holiday Inn today, Narube said there was a lot of waiting for Government to do something – “introduce more incentives, set up committees, appoint think tanks, make laws – you name it - before we can do our own thing”. “But if I may boldly tell you this morning - this waiting around is a waste of time and money! “Productivity is one of the few things that we can do something about without any help from anyone. The ball is clearly in our court,” he told about 50 chief executive officers at the symposium organised by the Training and Productivity Authority of Fiji. He said Fiji needed to raise its investment to over 25 per cent of GDP. “We need to support and promote local investment. But this is not enough. We need to attract foreign investment,” Narube said. “Here, we are competing for the same investment dollar with some bigger and richer countries.“Investors look at several things before they invest. They look at the environment – political, economic and social. They look at government policies and regulations and how these are applied. Investors look at the state of the infrastructure. “Finally, investors also look at the quality of labour and their unit cost. The efficiency of capital is a key decision maker. Productivity therefore becomes an important issue for investors,” he added. Narube said exports must drive Fiji’s growth. Exports must be the key driver of economic growth for a country like Fiji, he pointed out. “There is, in my view, no other way to grow the economy in a sustainable manner. When we export either goods or services, we are competing with other countries supplying the same products.”He said Fiji cannot rely on preferential access anymore, something he said was being reduced. Fiji must compete not only in prices but also in quality, he added. “We are competing with many countries which have low-cost structures and high productivity,” Narube said. “Our work is cut out for us. Therefore raising our productivity level must be a priority. If we cannot compete in this integrated world, we perish - simple as that.”But how is Fiji to raise the productivity in its export sector? For Narube, Fiji must change how it does things. “Productivity in the cane fields and the sugar mills are critical to the sugar reform. We must change how we work our agricultural sector,” he said. Narube warned that the existing model was clearly not working. “Our land is fertile. We have the best pawpaw in the world, the tastiest bananas and the sweetest pineapples but alas we are not even supplying enough of these to our hotels and supermarkets,” he said. “Our oceans are large yet the price of local fish keeps rising. Our mahogany forests are mature, yet we are not exporting high valued timber products. Obviously, something is seriously wrong and we need to correct that urgently.”He said there was a tendency to talk a lot about the potential of small businesses to raise growth and provide incomes and employment. “Again, while we continue to talk, we see very little progress in this important area,” Narube said.“Are we following the right model? Where is the bottleneck?Narube said Fiji should acknowledge and accept the significant role that productivity and competitiveness could play in overcoming many of its economic challenges that it faces particularly that of lifting economic growth, attracting investment and supporting exports. “More importantly, we need to do something about this now at all levels, micro as well as macro.”

May inflation drops to 5.8% 05 JUN 2008
Inflation in May fell to 5.8 per cent from 7.6 per cent recorded in April.This compares with an inflation rate of 6.6 per cent in May last year, according to the Reserve Bank of Fiji’s latest Economic Review. For the first time since September 2007 consumer prices declined by 0.1 per cent over the month. The fall in prices were led by lower costs of food items and clothing and footwear. Marginal decreases in charges for preserved meat, fresh and preserved fruits, spices, top dressings, confectionery and some vegetables and rootcrops underpinned lower prices in the food category. Moreover, cheaper costs of men’s and children’s wear underpinned the decline in the clothing and footwear category.Consumer prices in May have weakened partly due to base related effects and some improvement in the supply of primary produce (vegetables and root crops).The removal of value added tax from eggs and fiscal duties from rice, tinned fish and cooking oil - effective since June 1 - and the base related effects will result in annual inflation trending downwards for the next few months.However, a pick up in inflation is expected towards the later part of the year, the RBF said.

Fiji job advertisements up: RBF - 05 JUN 2008
Fiji’s labour market conditions appear to have improved in some sectors including manufacturing and mining, according to the Reserve Bank of Fiji. Cumulative to April, the RBF said the number of jobs advertised rose by around 9.5 per cent when compared with a year ago.“The demand for labour was higher mainly in the manufacturing; electricity and water; mining and quarrying and community, social and personal services related firms.”The RBF said the increase could be attributed to some expected improvement in business confidence and general optimism of economic activity this year coupled with emigration of skilled workers.

Intra-regional travel ‘future of tourism’ - 05 JUN 2008
The future of tourism in the Pacific, particularly in Fiji, lies in intra-regional travel by tourists, says interim Tourism Minister Tom Ricketts.He said Fiji’s tourism industry was faced with a lot of enormous challenges, one of which was that highlighted by the World Tourism Organisation (WTO) – the accelerating changes in the travelling pattern.“With the insecurity of travel, be it perceived or real, there is no doubt that the future of tourism lies in intra-regional travel with a growing preference for short break vacations close to one's home,” Ricketts said. “According to the WTO, about 80 per cent of the international tourist arrivals were short-haul regional holidays,” he said while officially opening the annual Bula Fiji Tourism Exchange (BFTE) at the Warwick Resort in Sigatoka last night. “We must work together to capitalise on this increasing trend night.”He said over the past ten years, the BFTE had gained a formidable reputation as the largest trade show in the South Pacific, continuing to attract tourism organisations and operators from throughout the region with a majority still from within Fiji. “This event gives Fiji and the Pacific region an opportunity to market its products,” he added.Ricketts said success in tourism must also be built on the strengthened partnership between private and public sectors. He said Fiji’s effective tourism revival campaign after the events of 2006 were possible with the close public and private co-operation that the crisis brought about. “Thirdly, WTO reminds us that competition is the key driving force of change. One key development is the use of information technology which has brought ever closer the distance between travellers and a destination,” Ricketts said. “The competition among destinations is intensified and has become globalised.” Ricketts said: “The BFTE brings together the regional tourist operators and the wholesalers from different parts of the world.“We hope that apart from renewing old relationships, new ones will be made and that the end result will be a growth in new business opportunities for both parties.”He reminded all players in the tourism industry that they needed to grow tourism to benefit their people.“Our aim is to exceed the expectation of our visitors,” Ricketts said.“We want to establish Fiji as a unique destination and ensure that the industry is seen as a benefit to all by embracing social and cultural traditions and practices while minimising the impact on our ecology.”

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