2018 Index of Economic Freedom

Fiji

overall score62.0
world rank84
Rule of Law

Property Rights68.3

Government Integrity34.8

Judicial Effectiveness47.1

Government Size

Government Spending68.2

Tax Burden81.4

Fiscal Health63.0

Regulatory Efficiency

Business Freedom62.8

Labor Freedom70.8

Monetary Freedom74.1

Open Markets

Trade Freedom68.8

Investment Freedom55.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.9 million
  • GDP (PPP):
    • $8.3 billion
    • 4.3% growth
    • 3.5% 5-year compound annual growth
    • $9,268 per capita
  • Unemployment:
    • 7.9%
  • Inflation (CPI):
    • 3.9%
  • FDI Inflow:
    • $269.5 million
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Fiji’s economic freedom score is 62.0, making its economy the 84th freest in the 2018 Index. Its overall score has decreased by 1.4 points, with a plunging score for fiscal health and declines in the government spending and monetary freedom indicators overwhelming improvements in judicial effectiveness and government integrity. Fiji is ranked 19th among 43 countries in the Asia–Pacific region, and its overall score is just above the regional and world averages.

A devastating cyclone early in 2016 caused widespread damage to housing, infrastructure, and crops, and the cost of rebuilding weighs heavily on public finances. Recovery is further hampered by underperforming institutions, structural and policy weaknesses, and weak rule of law. In an effort to enhance regulatory efficiency, the government implemented a series of pro-business reforms, including simplification of the business start-up process, but the pace of reform had slowed even before the storm.

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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. 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 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 68.3 Create a Graph using this measurement

Government Integrity 34.8 Create a Graph using this measurement

Judicial Effectiveness 47.1 Create a Graph using this measurement

Protection of property is highly uncertain. Obtaining land titles is difficult: Only 8 percent is freehold; the rest, indigenous and government land, can only be leased. The constitutionally independent judiciary is subject to executive influence. The law provides criminal penalties for corruption by officials, but the government does not enforce the law effectively, and officials sometimes engage in corrupt practices with impunity.

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 24.8 percent of total domestic income. Over the past three years, government spending has amounted to 32.6 percent of total output (GDP), and budget deficits have averaged 4.5 percent of GDP. Public debt is equivalent to 49.6 percent of GDP.

Regulatory EfficiencyView Methodology

Fiji’s credit bureau suspended operations in 2016, making it harder to obtain credit, but the process for starting a business was made less costly and time-consuming. Labor regulations remain rigid, and an efficient labor market has not been developed. The government continues to fund subsidies for the rebuilding of roads, bridges, water supplies, and sanitation damaged by the 2016 cyclone, as well as for rural electrification.

Open MarketsView Methodology

Trade is extremely important to Fiji’s economy; the combined value of exports and imports equals 110 percent of GDP. The average applied tariff rate is 10.6 percent. Nontariff barriers impede some trade. Government openness to foreign investment is below average. The government has withdrawn from commercial banking, and foreign participation is significant. Foreign exchange controls have been eased, but they still limit repatriation of capital and profits.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong90.20.4
2Singapore88.80.2
3New Zealand84.20.5
4Australia80.9-0.1
5Taiwan76.60.1
6Malaysia 74.50.7
7South Korea73.8-0.5
8Japan72.32.7
9Macau70.90.2
10Vanuatu69.52.1
11Kazakhstan69.10.1
12Thailand 67.10.9
13Philippines65-0.6
14Azerbaijan64.30.7
15Indonesia64.22.3
16Brunei Darussalam64.2-5.6
17Tonga63.10.1
18Kyrgyz Republic 62.81.7
19Fiji62-1.4
20Bhutan61.83.4
21Samoa61.53.1
22Cambodia58.7-0.8
23Tajikistan58.30.1
24China57.80.4
25Sri Lanka57.80.4
26Solomon Islands57.52.5
27Mongolia55.70.9
28Papua New Guinea55.74.8
29Bangladesh 55.10.1
30India54.51.9
31Pakistan 54.41.6
32Nepal54.1-1.0
33Burma53.91.4
34Laos53.6-0.4
35Vietnam53.10.7
36Micronesia52.3-1.8
37Uzbekistan51.5-0.8
38Afghanistan51.32.4
39Maldives51.10.8
40Kiribati50.8-0.1
41Timor-Leste48.11.8
42Turkmenistan47.1-0.3
43North Korea5.80.9
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