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- GDP (PPP):
- $4.5 billion
- 3.0% growth
- 1.8% 5-year compound annual growth
- $5,085 per capita
- Inflation (CPI):
- FDI Inflow:
Fiji’s economic freedom score is 59.0, making its economy the 98th freest in the 2015 Index. Its overall score is 0.3 point higher than last year, with improvements in monetary freedom, freedom from corruption, and labor freedom partially offset by a combined decline in business freedom, the control of government spending, and fiscal freedom. Fiji is ranked 20th out of 42 countries in the Asia–Pacific region, and its overall score is about average, both for the world and the region.
Over the past five years, Fiji’s economic freedom has declined by 1.4 points, a trend that has pushed the economy into the “mostly unfree” category. Led by score declines in freedom from corruption, financial freedom, and government spending, economic freedom in Fiji has fallen in half of the 10 categories measured.
Reflecting the lack of progress in structural and institutional reforms, Fiji continues to underperform in many policy areas critical to economic freedom. The autocratic and centralized government undercuts the effective development of an independent judiciary. Government spending has been growing, with subsidies and price controls undermining overall monetary stability and fiscal soundness.
The Pacific island nation of Fiji is ruled by military strongman Commodore Frank Bainimarama, who has dominated island politics 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 the vital agriculture, apparel, and fishing industries. In September 2009, Fiji was suspended from the Commonwealth of Nations. In July 2012, Australia and New Zealand restored diplomatic ties in response to Fiji’s preparations for democratic elections in 2014. A reform of the industrial sector has done little to boost growth.
Since seizing power in 2006, the military government has suspended the constitution, neutralized political opponents, and crippled democratic institutions. Official corruption is widespread, and government decision-making is not transparent. Eight percent of the land is freehold; the rest (indigenous and government land) can only be leased. Protection of property is highly uncertain, and obtaining land titles is difficult.
Fiji’s top individual income tax rate is 29 percent, and its top corporate tax rate is 20 percent. Other taxes include a value-added tax and a land sales tax. The overall tax burden is 25 percent of domestic income. Government spending equals 29.1 percent of domestic output, and public debt equals 52 percent of gross domestic product.
Incorporating a business has become less time-consuming, but other regulatory requirements increase the overall cost of conducting business. The minimum capital requirement for starting a business has been eliminated. The underdeveloped labor market traps much of the labor force in informal economic activity. The government maintains price controls on various goods and continues to subsidize electricity for residential customers.
Fiji has a 9.9 percent average tariff rate. There are few formal non-tariff barriers. Most land is owned by the government. The financial sector, dominated by commercial banks, is relatively well developed and stable. The central bank has relaxed several foreign exchange controls in recent years. The capital market remains underdeveloped, with 18 companies listed in the stock exchange as of 2014.