2017 Index of Economic Freedom

Fiji

overall score63.4
world rank71
Rule of Law

Property Rights67.7

Government Integrity32.7

Judicial Effectiveness41.9

Government Size

Government Spending72.5

Tax Burden80.7

Fiscal Health84.1

Regulatory Efficiency

Business Freedom61.3

Labor Freedom70.5

Monetary Freedom75.5

Open Markets

Trade Freedom68.8

Investment Freedom55.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.9 million
  • GDP (PPP):
    • $8.0 billion
    • 4.3% growth
    • 3.7% 5-year compound annual growth
    • $9,044 per capita
  • Unemployment:
    • 7.7%
  • Inflation (CPI):
    • 2.8%
  • FDI Inflow:
    • $332.4 million
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Fiji’s record in reforming underperforming institutions has been uneven, and economic growth is limited by lingering structural and policy weaknesses that constrain economic freedom. The rule of law is not strongly supported by the judicial system, particularly because of growing corruption. Inefficient and high public spending has resulted in a considerable fiscal burden imposed on the population.

The government has implemented a series of pro-business reforms, including simplification of the business start-up process, in an effort to enhance regulatory efficiency. However, the pace of reform has slowed in recent years, and policies to open markets further have not been advanced.

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Background

Military strongman Commodore Frank Bainimarama has ruled the Pacific island nation of Fiji for a decade. There is a long history of ethnic tension between the indigenous, mostly Christian population and a large minority of Hindu and Muslim Indo–Fijians. Sanctions imposed in 2006 by Fiji’s main trading partners, including the European Union and Australia, in reaction to the coup that installed Bainimarama hurt vital agriculture, apparel, and fishing industries. In September 2014, in Fiji’s first election since 2006, Bainimarama was elected prime minister. Soon after the election, Australia and the United States lifted their sanctions. Fiji’s economy relies heavily on tourism, remittances, and the sugar industry.

Rule of LawView Methodology

Property Rights 67.7 Create a Graph using this measurement

Government Integrity 32.7 Create a Graph using this measurement

Judicial Effectiveness 41.9 Create a Graph using this measurement

Protection of property rights is highly uncertain. Obtaining land titles is difficult. Only 8 percent of land is freehold; the rest is indigenous and government land and can only be leased. The judiciary is constitutionally independent but subject to executive influence. The parliamentary opposition is pushing for more transparent administration, but the government’s heavy-handed tactics seriously undermine democratic accountability.

Government SizeView Methodology

The top individual income tax rate is 29 percent, and the top corporate tax rate is 20 percent. Other taxes include a value-added tax and a land sales tax. The overall tax burden equals 26.3 percent of total domestic income. Government spending has amounted to 30.3 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.7 percent of GDP. Public debt is equivalent to 46.1 percent of GDP.

Regulatory EfficiencyView Methodology

Despite some progress, procedures for establishing and running a private enterprise are still time-consuming and costly. Labor regulations remain rigid, and an efficient labor market has not been developed. The government’s budget for fiscal year 2016–2017 contained subsidies on imported building materials for post-cyclone rebuilding of roads, bridges, water supplies, sanitation, and rural electrification.

Open MarketsView Methodology

Trade is extremely important to Fiji’s economy; the value of exports and imports taken together equals 137 percent of GDP. The average applied tariff rate is 10.6 percent. Foreign investment is screened, and investment in land is restricted. State-owned enterprises distort the economy. The government has withdrawn from commercial banking, and foreign participation is significant. Controls on foreign exchange have been eased.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong89.81.2
2Singapore88.60.8
3New Zealand83.72.1
4Australia810.7
5Taiwan76.51.8
6South Korea74.32.6
7Malaysia 73.82.3
8Macau70.70.6
9Brunei Darussalam69.82.5
10Japan69.6-3.5
11Kazakhstan695.4
12Vanuatu67.46.6
13Thailand 66.22.3
14Philippines65.62.5
15Azerbaijan63.63.4
16Fiji63.44.6
17Tonga633.4
18Indonesia61.92.5
19Kyrgyz Republic 61.11.5
20Cambodia59.51.6
21Bhutan58.4-1.1
22Samoa58.4-5.1
23Tajikistan58.26.9
24China57.45.4
25Sri Lanka57.4-2.5
26Nepal55.14.2
27Solomon Islands558.0
28Bangladesh 551.7
29Mongolia54.8-4.6
30Micronesia54.12.3
31Laos544.2
32Pakistan 52.8-3.1
33India52.6-3.6
34Burma52.53.8
35Vietnam52.4-1.6
36Uzbekistan52.36.3
37Papua New Guinea50.9-2.3
38Kiribati50.94.7
39Maldives50.3-3.6
40Afghanistan48.9N/A
41Turkmenistan47.45.5
42Timor-Leste46.30.5
43North Korea4.92.6
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