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Fiji’s return to democracy expected to bring investment opportunities

Foreign investment in the Fiji economy is expected to return, following the first democratic election since the 2006 coup this week. Tourism, infrastructure and natural resources are three sectors expected to benefit, but economists and business leaders say that will depend on political and policy stability, as Kevin McQuillan reports.

Fiji’s economic growth since its 2006 coup has been a mixed bag. Each of the four coups in Fiji has seen a drop in GDP of approximately five per cent in their immediate aftermath, according to Satish Chand, Finance Professor at the University of New South Wales. But since 2010, the economy has been returning to growth, averaging three per cent annum.

Tourism has rebounded, he says, mainly from Australia, but so has infrastructure spending, with the interim government pouring 25 per cent of GDP into roads, transport, jetties, wharves, and sewerage plants. And, according to Investment Fiji executive chairman, Bradley Truman, 152 foreign investment project proposals were received between January and July this year, valued at F$1.3 billion (K1.7 billon; US$600,000), employing potentially 4,921.


‘A lot of the growth that has been occurring in Fiji more recently—and it’s actually quite vibrant and optimistic there at the moment—a lot of that is driven by domestic demand and a lot of the investment is by locally-based businesses,’ Greg Pawson, President of the Australia-Fiji Business Council, tells Business Advantage PNG. ‘Post elections, Fiji will be a different story,’ the ANZ Bank’s Vishnu Mohan told us recently.

‘From a business council point of view the feedback that we’re getting is that they are looking for stability.’

‘I think there’ll be a lot of investment coming in. I know a lot of potential investors are waiting to see the elections happen and then to see a stable government coming in. Then, they will start building infrastructure and taking the country forward.’

BSP’s Robin Fleming agrees more investment is likely. ‘I get over there quite regularly, and the general mood of business is positive,’ he told Business Advantage PNG.


‘Firstly, they want a democratic government, but also policies that will encourage foreign investors to go back in there, and also we’d like to see continuous consultation with business groups such as ourselves.’

‘The reception from the business community to the interim government has been quite positive, but with that comes potential volatility, particularly in policy, that perhaps that is not as apparent with a democratically elected government.’

Chand agrees: ‘The signal the election will hopefully send is that of confidence, that there will be political stability and policy certainty.’

Key sectors

The sectors likely to attract more foreign investment are tourism, resources, infrastructure and ICT. ‘Resorts,’ suggests Pawson. ‘Quite a broad spectrum and quite a number of the larger multinational operators are probably holding back to see what eventuates and then you’ve got at the end of the scale is the smaller operators that are actually just sitting back to see what happens as well.’

A good example of that, he says, was the re-opening of the recent opening of the Grand Pacific Hotel, in which Lamana Developments of Papua New Guinea has a 25 per cent shareholding. Chand says China is likely to increase its mining activities, particularly in bauxite on the island of Vanu Levu, and says at least two more water bottling plants are in the pipeline.


Chand and Pawson point out recent infrastructure investment, which will assist business development, includes the resealing of roads in and around Suva’s CBD (which will significantly improve getting around Suva), the building of a dual carriageway project from Suva airport to the township, and the sealing of the ring road around the island of Viti Levu.

‘They’ve outsourced the running of the port and, from all accounts, the running of the port has improved quite significantly,’ says Greg Pawson. ‘And then, of course, the proposed refurbishment of Nadi International Airport. I think Nausori will be a beneficiary of that now there are direct flights to Auckland and Sydney out of Suva.’

Funds to drive investment

Pawson believes much of the potential investment in Fiji is likely to come from regional superannuation funds. ‘In Fiji and some of the smaller jurisdictions, like Solomon Islands and Vanuatu, there comes a stage when they are strapped to find good local opportunities, which therefore forces them to look beyond their jurisdiction and other parts of the region and I think that’s a positive thing.’