2014 Index of Economic Freedom

Fiji

overall score58.7
world rank99
Rule of Law

Property Rights25.0

Freedom From Corruption20.0

Limited Government

Government Spending76.2

Fiscal Freedom82.3

Regulatory Efficiency

Business Freedom64.9

Labor Freedom73.1

Monetary Freedom75.2

Open Markets

Trade Freedom70.2

Investment Freedom50.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.9 million
  • GDP (PPP):
    • $4.3 billion
    • 2.1% growth
    • 0.8% 5-year compound annual growth
    • $4,786 per capita
  • Unemployment:
    • 7.0%
  • Inflation (CPI):
    • 4.3%
  • FDI Inflow:
    • $267.9 million
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Fiji’s economic freedom score is 58.7, making its economy the 99th freest in the 2014 Index. Its overall score is 1.5 points higher than last year due to improvements in investment freedom, fiscal freedom, trade freedom, and monetary freedom. Fiji is ranked 20th out of 42 countries in the Asia–Pacific region, and its overall score is below the world and regional averages.

Over the 20-year history of the Index, Fiji’s economic freedom score has advanced by nearly 4 points. Improvements have occurred in four of the 10 categories, including notable improvements in fiscal freedom and trade freedom. However, these improvements have been counterbalanced by considerable deteriorations in the rule of law as measured by property rights and freedom from corruption. Fiji had risen to the status of economically “moderately free” from 2007 to 2011 but has fallen back into the ranks of the “mostly unfree” since 2012.

Fiji’s judiciary continues to be vulnerable to political interference. Corruption has become a serious concern, undermining prospects for broad-based long-term economic development.

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Background

The Pacific island nation of Fiji is ruled by military strongman Commodore Frank Bainimarama, who has dominated island politics for a decade. Fiji has long suffered from ethnic tension between the indigenous, mostly Christian population and a large minority of Hindu or Muslim Indo–Fijians. Sanctions were imposed in 2006 by Fiji’s main trading partners, including the European Union and Australia, in reaction to the coup that installed Bainimarama. These sanctions hurt the vital agriculture, clothing, and fishing industries. In September 2009, Fiji was suspended from the Commonwealth of Nations. In July 2012, Australia and New Zealand restored diplomatic ties with Fiji in response to its preparations for democratic elections in 2014. An industrial reform, begun in 2010, has done little to improve Fiji’s slowing economy.

Rule of LawView Methodology

Property Rights 25.0 Create a Graph using this measurement

Freedom From Corruption 20.0 Create a Graph using this measurement

Although the interim government has pledged to eradicate pervasive corruption and improve bureaucratic efficiency, official corruption remains widespread. The suspension of the constitution in 2009 and the related dismissal of judges and their replacement by appointees of the interim government raised serious questions about judicial independence. Protection of property is highly uncertain, and obtaining land titles is difficult.

Limited GovernmentView Methodology

The top individual income tax rate is 29 percent, and the top corporate tax has fallen to 20 percent. Other taxes include a value-added tax (VAT) and a land sales tax. The overall tax burden equals 23 percent of GDP. Government expenditures are 28 percent of total domestic output, and public debt remains slightly larger than half the size of the domestic economy.

Regulatory EfficiencyView Methodology

Establishing a private enterprise takes almost two months, although no minimum capital is required. Obtaining necessary permits takes 16 procedures and 142 days. The recent labor reform consolidated and updated the labor codes, but labor regulations remain rigid. Price controls are imposed on various goods, and the government continues to subsidize electricity for residential customers.

Open MarketsView Methodology

Fiji has a 9.9 percent average tariff rate and few formal non-tariff barriers to trade. Restrictions on foreign exchange have been relaxed somewhat in recent years. The government has withdrawn from commercial banking, and foreign participation is significant. Foreign exchange controls have been eased but still limit repatriation of capital and profits.

Country's Score Over Time

Bar Graph of Fiji Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Fiji to other economic country groups

Regional Ranking

rank country overall change
1Hong Kong90.10.8
2Singapore89.41.4
3Australia82-0.6
4New Zealand81.2-0.2
5Taiwan73.91.2
6Japan72.40.6
7Macau71.3-0.4
8South Korea71.20.9
9Malaysia 69.63.5
10Kazakhstan63.70.7
11Thailand 63.3-0.8
12Azerbaijan61.31.6
13Samoa61.14.0
14Kyrgyz Republic 61.11.5
15The Philippines60.11.9
16Sri Lanka60-0.7
17Vanuatu59.52.9
18Mongolia58.9-2.8
19Fiji58.71.5
20Indonesia58.51.6
21Tonga58.22.2
22Cambodia57.4-1.1
23Bhutan56.71.7
24India55.70.5
25Pakistan 55.20.1
26Bangladesh 54.11.5
27Papua New Guinea53.90.3
28China52.50.6
29Tajikistan52-1.4
30Laos51.21.1
31Maldives512.0
32Vietnam50.8-0.2
33Nepal50.1-0.3
34Micronesia49.8-0.3
35Burma46.57.3
36Uzbekistan46.50.5
37Kiribati46.30.4
38Solomon Islands46.21.2
39Timor-Leste43.2-0.5
40Turkmenistan42.2-0.4
41North Korea1-0.5
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