2019 Index of Economic Freedom

Fiji

overall score62.2
world rank81
Rule of Law

Property Rights67.3

Government Integrity23.4

Judicial Effectiveness42.9

Government Size

Government Spending71.7

Tax Burden81.1

Fiscal Health82.4

Regulatory Efficiency

Business Freedom63.0

Labor Freedom72.9

Monetary Freedom73.5

Open Markets

Trade Freedom62.8

Investment Freedom55.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.9 million
  • GDP (PPP):
    • $8.7 billion
    • 3.8% growth
    • 3.7% 5-year compound annual growth
    • $9,777 per capita
  • Unemployment:
    • 6.3%
  • Inflation (CPI):
    • 3.4%
  • FDI Inflow:
    • $299.0 million

Fiji’s economic freedom score is 62.2, making its economy the 81st freest in the 2019 Index. Its overall score has increased by 0.2 point, with a spike in fiscal health exceeding a sharp drop for government integrity and a lower score for trade freedom. Fiji is ranked 18th among 43 countries in the Asia–Pacific region, and its overall score is just above the regional and world averages.

After a series of cyclones in the past few years that caused widespread damage to housing, infrastructure, and crops, the government’s goal is to develop Fiji’s physical infrastructure both to improve resilience to tropical storms and to support economic growth. The cost of reconstruction has weighed heavily on public finances. Recovery is further hampered by underperforming institutions, structural and policy weaknesses, and weak rule of law. To enhance regulatory efficiency, the government has implemented a series of pro-business reforms.

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Background

The former British colony of Fiji gained independence in 1970. Military strongman Commodore Frank Bainimarama has ruled the Pacific island nation for more than a decade, and his FijiFirst party retained its parliamentary majority in November 2018 elections. 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. The sanctions were lifted after Bainimarama was elected prime minister in 2014. Fiji’s economy relies heavily on tourism, remittances, and the sugar industry.

Rule of LawView Methodology

Property Rights 67.3 Create a Graph using this measurement

Government Integrity 23.4 Create a Graph using this measurement

Judicial Effectiveness 42.9 Create a Graph using this measurement

Protection of property is highly uncertain. Obtaining land titles is difficult and time-consuming. Constitutional provisions meant to improve the quality and protection of land leases have unintentionally weakened the legal structure surrounding leases. The judiciary is constitutionally independent but subject to executive influence, and the constitution restricts the jurisdiction of the courts. Enforcement of anticorruption statutes is ineffective.

Government SizeView Methodology

The top individual income tax rate is 29 percent, and the top corporate tax rate is 20 percent. Other taxes include value-added and land sales taxes. The overall tax burden equals 25.5 percent of total domestic income. Over the past three years, government spending has amounted to 30.7 percent of the country’s output (GDP), and budget deficits have averaged 2.9 percent of GDP. Public debt is equivalent to 46.6 percent of GDP.

Regulatory EfficiencyView Methodology

Despite some progress, procedures for establishing and running a private enterprise are still time-consuming and costly. Businesses in Fiji must cope with increasing bureaucratic interference and a complex land ownership system. Labor regulations remain rigid, and an efficient labor market has not been developed. The government has increased sugarcane subsidies and launched a program to subsidize electronic transactions.

Open MarketsView Methodology

The combined value of exports and imports is equal to 78.0 percent of GDP. The average applied tariff rate is 11.1 percent. Foreign investment is screened, and investment in land is restricted. State-owned enterprises distort the economy. The government of Fiji has withdrawn from commercial banking, and foreign participation is significant. Foreign exchange controls have been eased.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong90.20.0
2Singapore89.40.6
3New Zealand84.40.2
4Australia80.90.0
5Taiwan77.30.7
6Malaysia 74-0.5
7South Korea72.3-1.5
8Japan72.1-0.2
9Macau710.1
10Thailand 68.31.2
11Indonesia65.81.6
12Kazakhstan65.4-3.7
13Azerbaijan65.41.1
14Brunei Darussalam65.10.9
15Philippines63.8-1.2
16Bhutan62.91.1
17Kyrgyz Republic 62.3-0.5
18Fiji62.20.2
19Samoa62.20.7
20China58.40.6
21Papua New Guinea58.42.7
22Cambodia57.8-0.9
23Tonga57.7-5.4
24Laos57.43.8
25Sri Lanka56.4-1.4
26Vanuatu56.4-13.1
27Bangladesh 55.60.5
28Tajikistan55.6-2.7
29Mongolia55.4-0.3
30Vietnam55.32.2
31India55.20.7
32Pakistan 550.6
33Solomon Islands54.6-2.9
34Nepal53.8-0.3
35Burma53.6-0.3
36Uzbekistan53.31.8
37Maldives53.22.1
38Micronesia51.9-0.4
39Afghanistan51.50.2
40Turkmenistan48.41.3
41Kiribati47.3-3.5
42Timor-Leste44.2-3.9
43North Korea5.90.1
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