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GDP (2001): $2.3 billion.
GDP per capita (nominal): $2,490.
GDP per capita (purchasing power parity): $7,800.
GDP composition by sector: Services 58%, industry 25.5%, agriculture 16.5%.
Industry: Types--tourism, sugar, garments.
Trade: Exports--$494.5 million; sugar, garments, gold, timber, fish. Major markets--Australia, New Zealand, Japan, U.S., U.K. Imports--$721 million; basic manufactures, machinery and transport equipment. Major sources--Australia, New Zealand, U.S. ($91.8 million).
External debt (2001): $283 million.
Fiji is one of the most developed of the Pacific island economies, although it remains a developing country with a large subsistence agriculture sector. The effects of the Asian financial crisis contributed to substantial drops in GDP in 1997 and 1998, with a return to positive growth in 1999 aided by a 20% devaluation of the Fijian dollar. According to the Asian Development Bank, the economy contracted by 4.7% in 2000, but recovered quickly and grew by an estimated 5.1% in 2001. The Government of Fiji reported that growth was driven by a recovery in the tourism industry as well as by improved performance in mining, the harvesting and processing of mahogany, and fresh fish exports.
Tourism has expanded rapidly since the early 1980s and is the leading economic activity in the islands. Nearly 400,000 people visited Fiji in 2002, excluding cruise ship passengers. About one-third came from Australia, with large contingents also coming from New Zealand, the United States, the United Kingdom, and Japan. More than 58,000 of the tourists were American, a number that has steadily increased since the start of regularly scheduled nonstop air service from Los Angeles. The number of U.S. tourists declined somewhat in the wake of September 11, but Fiji experienced a record number of visitors in February 2002. In 2002, Fiji's gross earnings from tourism were about $330 million, an amount exceeding the revenue from its two largest goods exports (sugar and garments). Gross earnings from tourism continue to be Fiji's major source of foreign currency.
Fiji runs a persistently large trade deficit, although its tourism revenue yields a services surplus, which keeps the current account of its balance of payments roughly in balance. Australia accounts for between 35% and 45% of Fiji's trade, with New Zealand, the United States, the United Kingdom, and Japan varying year-by-year between 5% and 15% each. Fiji's two largest exports are sugar and garments, which each accounted for about one-quarter of export revenue in 2002--roughly $130 million each. The potential collapse of Fiji's sugar industry, due to quality concerns, poor administration, and the phasing out of a preferential price agreement with the European Union in 2007, also poses a major threat to Fiji's already uncertain economic well-being. The Fijian garment industry has developed rapidly since the introduction of tax exemptions in 1988. The industry's output has increased nearly ten-fold since that time, but the lower labor costs of Chinese competitors and the softening of a trade preference agreement with Australia have resulted in largescale closures of garment factories in the country.
Other important export crops include coconuts and ginger, although production levels of both are declining. Fiji has extensive timber reserves, but forestry has become important as an export trade only since the mid-1980s. Fishing is important as an export sector and for domestic consumption. In the mining and manufacturing sectors, gold and silver are exported. A major expansion of production at the Emperor Mine at Uatakoula is planned for 2004. The most important manufacturing activities are the processing of sugar and fish. Since 2000 the export of still mineral water, mainly to the United States, has expanded rapidly. By mid-2003, it was more than $40 million per year.
Since the 1960s, Fiji has had a high rate of emigration, particularly of Indo-Fijians in search of better economic opportunities. This has been particularly true of persons with education and skills. The economic and political uncertainty following the 1987 and 2000 coups added to the outward flow by persons of all ethnic groups. In recent years, indigenous Fijians also have begun to emigrate in large numbers, often to seek employment as home health care workers. Unemployment is high, and wages are very low. Advertised white-collar job openings often attract hundreds of applicants, many of whom are well-qualified. More than 200,000 people, about 25% of the total population, participated in the U.S. 2002 Diversity Visa program, which awards U.S. immigrant visas through a lottery draw system.
Other long-term economic problems include low investment rates and uncertain property rights. Investment laws are being reviewed to make them more business-friendly, including a relaxation of work permit requirements. Investor confidence in Fiji dropped significantly due to the recurrence of political instability in 2000. However, in April 2002, Moody's Investor's Service upgraded its Ba2 sovereign rating of Fiji from negative to stable, noting that despite continuing domestic political uncertainties, the country's external financial position had weathered the past 2 year's volatility without significant deterioration. External liquidity remained adequate.