2013 Index of Economic Freedom

Fiji

overall score57.2
world rank105
Rule of Law

Property Rights25.0

Freedom From Corruption20.0

Limited Government

Government Spending78.0

Fiscal Freedom78.0

Regulatory Efficiency

Business Freedom65.7

Labor Freedom74.9

Monetary Freedom72.8

Open Markets

Trade Freedom68.0

Investment Freedom40.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.9 million
  • GDP (PPP):
    • $4.1 billion
    • 2.0% growth
    • 0.1% 5-year compound annual growth
    • $4,620 per capita
  • Unemployment:
  • Inflation (CPI):
    • 8.6%
  • FDI Inflow:
    • $204.3 million
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Fiji’s economic freedom score is 57.2, making its economy the 105th freest in the 2013 Index. Its overall score is 0.1 point lower than last year, with declines in six categories of economic freedom outweighing improvements in business freedom and investment freedom. Fiji is ranked 18th out of 41 countries in the Asia–Pacific region, and its overall score is below the world and regional averages.

The lack of business and investment opportunities, exacerbated by regulatory inefficiency and uncertainty, has contributed to extended economic stagnation in Fiji. The state’s presence in the economy is pervasive, and government-controlled sugar, electricity, and transportation enterprises are significant sources of corruption and impediments to fiscal stability. Public debt exceeds 50 percent of GDP and is higher than in neighboring countries. No efforts have been made to overhaul the civil service and public enterprises.

Respect for the rule of law has declined notably, and Fiji still has not developed an independent and effective legal system. The judiciary has become more vulnerable to political interference, and corruption has become a serious concern, undermining prospects for long-term economic development.

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Background

The Pacific island nation of Fiji is ruled by an interim government headed 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 imposed by Fiji’s main trading partners, including the European Union and Aus­tralia, have hurt the vital agriculture, clothing, and fishing industries. In September 2009, Fiji was suspended from the Commonwealth of Nations. The government began to implement industry reform in 2010, but it 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

Protection of property is highly uncertain. Government actions undermine the judiciary’s independence, the backlog of cases is significant, and there is a shortage of prosecutors. Obtaining land titles is difficult, and the enforcement of intellectual property rights is inadequate. Limited accountability for corruption and lack of effective law enforcement pose challenges for entrepreneurs.

Limited GovernmentView Methodology

The top income tax rate is 31 percent, and the top corporate tax rate has been cut to 28 percent. Other taxes include a value-added tax (VAT) and a land sales tax. The overall tax burden is equal to 21.4 percent of total domestic income, and government spending is 27.1 percent of total domestic output. Deficits have narrowed to 3.1 percent of GDP, with public debt amounting to about 55 percent of GDP.

Regulatory EfficiencyView Methodology

Despite some progress, procedures for establishing and running a private enterprise remain time-consuming and costly. Completing licensing requirements takes about 150 days. The recent labor reform consolidated and updated the labor codes, but labor regulations remain rigid, and an efficient labor market has not developed. Inflation has been rising, and price controls are imposed on various goods.

Open MarketsView Methodology

The trade-weighted average tariff rate is quite high at 10.1 percent, and non-tariff barriers further raise the cost of trade. All foreign investment must be approved by the state, and the overall investment environment is poor. 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 Kong89.3-0.6
2Singapore880.5
3Australia82.6-0.5
4New Zealand81.4-0.7
5Taiwan72.70.8
6Japan71.80.2
7Macau71.7-0.1
8South Korea70.30.4
9Malaysia 66.1-0.3
10Thailand 64.1-0.8
11Kazakhstan63-0.6
12Mongolia61.70.2
13Sri Lanka60.72.4
14Azerbaijan59.70.8
15Kyrgyz Republic 59.6-0.6
16Cambodia58.50.9
17The Philippines58.21.1
18Fiji57.2-0.1
19Samoa57.1-3.4
20Indonesia56.90.5
21Vanuatu56.60.0
22Tonga56-1.0
23India55.20.6
24Pakistan 55.10.4
25Bhutan55-1.6
26Papua New Guinea53.6-0.2
27Tajikistan53.40.0
28Bangladesh 52.6-0.6
29China51.90.7
30Vietnam51-0.3
31Nepal50.40.2
32Micronesia50.1-0.6
33Laos50.10.1
34Maldives49-0.2
35Uzbekistan460.2
36Kiribati45.9-1.0
37Solomon Islands45-1.2
38Timor-Leste43.70.4
39Turkmenistan42.6-1.2
40Burma39.20.5
41North Korea1.50.5
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