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Opinion

Fiji’s economic future looks bright

Of all the economies impacted by the COVID-19 pandemic, Fiji was among the hardest hit.

The tourism market, which accounts for about 40 per cent of Fiji’s economy, was decimated as the steady influx of international travellers dried up overnight.

It really feels like the country is open for business again and we are seeing proof among our resort customers. Many are expecting occupancy for the peak period until October of about 90 per cent and that’s hugely encouraging.

Of all the economies impacted by the COVID-19 pandemic, Fiji was among the hardest hit. Picture: Shutterstock

“Having a stable and prosperous Fiji is critical to the stability of the region, given its economic importance and geographical location”.

Fiji is expecting about 60,000 international visitors this month which is roughly two thirds of normal peak months prior to the pandemic.

Restaurants are full again and the vast majority of retail banking customers who paused their loans during the pandemic have now resumed repayments.

The economic recovery means many Fijians impacted by COVID closures are employed again or have had their hours increased. But while the economy is no longer paralysed, the recovery is a slightly uneven story.

The challenges Fiji faces are not unlike other markets globally where supply chain interruptions and price inflation are affecting most people and businesses. The country also faces a brain drain as some of its brightest move away for employment opportunities elsewhere.

New horizons

I took on my new role in Fiji almost 12 months ago but had to spend the first six months of the job working remotely from Australia due to border restrictions as a result of COVID-19.

Of all the economies impacted by the COVID-19 pandemic, Fiji was among the hardest hit. Picture: Shutterstock

Since arriving in January, I’ve had the chance to visit many of our staff and customers. Listening to them, I have been inspired by their passion and commitment to help Fiji recover. They are also hungry for fresh ideas and new ways of doing things.

At ANZ Fiji our team of almost 700 people who service the country and ANZ operations across the Pacific are ready to help. Having a stable and prosperous Fiji is critical to the stability of the region given its economic importance and geographical location.

From ANZ’s perspective, we see three major economic opportunities for Fiji. The first is what we call the “trade up” currently taking place in the economy.

The trade up refers to us supporting our customers as they recover from the pandemic, for example funding resort operators as they rehire and retrain staff, freshen up premises and restock their bars. Meanwhile for our domestically focussed business clients the trade-up is affected by global supply chain issues so there is a need to finance holdings of larger stock levels due and to build additional warehouse capacity.

The rising activity levels have been crimped slightly by skilled workforce limitations, particularly in certain trades where workers are in short supply. This has knock-on effects well beyond the construction and infrastructure industries and is something the government is trying to address.

Supply chain issues have also made it difficult for businesses to source enough stock. In many cases businesses have spent working capital to buy excess stock to ensure they don’t run short on supplies. We must help our customers navigate this tricky time.

Of all the economies impacted by the COVID-19 pandemic, Fiji was among the hardest hit. Picture: Wikimedia Commons

The second opportunity is diversification. Most people in Fiji accept the country needs to diversify away from the tourism sector. It needs to branch out by supporting other export markets.

The country has several strategic advantages which historically have not been fully realised. One is its central location and ability to service other South Pacific economies as a regional hub.

Regional hub

Fiji has reliable and sophisticated telecommunications infrastructure; a young, educated population which speaks English; an attractive time zone that straddles the U.S. and Europe and opportunities to develop sectors such as commercial agriculture and manufacturing.

One source of diversification would be to expand the country’s existing capability as a business services hub. ANZ has demonstrated this can work for 22 years.

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We have our operations hub for 11 countries based in Suva providing shared business services to our operations across the region.

For new service exporters, ANZ is offering support for companies looking to hire and skill-up large new workforces for their own outsourcing or shared service centres.

Another potential source of diversification is to expand commercial agriculture. Traditionally Fiji was dependent on sugar cane production but increasingly the country is becoming known for other products including ginger, turmeric and kava.

Of all the economies impacted by the COVID-19 pandemic, Fiji was among the hardest hit. Picture: Fiji Travel

Moving along the value chain in the fishing industry will also deliver diversification benefits. Currently most fish is frozen and exported to countries including China and Japan.

However, more value can be captured if local fishing businesses expand into filleting, packaging, smoking or canning product before export.

This is evolution, not revolution. It’s looking at what Fiji already does well and building on that. For example, the export value of bottled water is double that of fisheries – mainly because that product is bottled, labelled and packed locally before export.

The third opportunity for Fiji’s recovery post-pandemic is infrastructure. The country requires major investments in hospitals, roads, bridges, renewable energy and affordable housing.

ANZ is in a good position to assist with many of these growth opportunities through direct lending facilities and, importantly, through collaboration with multi-lateral organisations such as the World Bank.

I’ve loved getting to know our staff and their customers and hearing their perspectives on doing business in Fiji.

And I had some sound advice before I left Australia: to be successful you have to listen and get granular. If you only operate at a high level you won’t get much done and you won’t know what to focus on. It’s a matter of getting your hands dirty so you know what needs to be addressed.

The good thing is that Fiji is well on the way to capturing opportunities and the future looks very bright.

Rabih Yazbek is Country Head for Fiji at ANZ.

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