‘Look Beyond Tourism Industry, Manufacturing Can Boost Economy’

Manufacturing can drive a structural change to a balanced economy. This was highlighted in the latest country report survey done by ANZ Bank.

Manufacturing is Fiji’s biggest industry sector, accounting for nearly 12% of GDP, just ahead of Agriculture, Forestry & Fishing, which is 10.1% of GDP, the report says.

It stated that the demand for manufactured goods held up well during the pandemic with output falling by only 10% versus a 22% decline in GDP.

“Importantly, manufacturing has a high exports-to-sales ratio, as most of its sub-sectors are export oriented.

“We believe demand for Fiji’s manufactured goods can grow. “While Fiji may continue to see displacement of domestic goods to cheaper Asian imports, overseas demand for Fiji’s manufactured products can grow.”

Given the disruption of global supply chains and the growth of fair trade and sustainable products, ANZ believes Fiji’s food & beverage, bottled water, woods & paper products and furniture sub-sectors could benefit.

The report stated that it was time the country looked beyond the tourism recovery horizon to secure the future.

“Tourism has been an important part of the Fijian economy and will contribute materially to the country’s future GDP, but it cannot sustain growth forever,” the report said.

It has become increasingly important that Fiji diversifies its revenue sources to balance the economy.

“Policy makers may focus attention on the investment required to underwrite other sectors.

“A rear- guard action to develop non-tourism industries will be important to secure a more balanced economy. Industries such as commercial agriculture, fishing, manufacturing and business services have potential, and a roadmap for these industries will help Fiji secure its future.”

Drawing global capital into processing is the key

downstream

Capital investment by institutions, such as pension funds, sovereign wealth funds, and wealth & endowment funds, is mostly focused on developed markets such as the United States, Canada and Australia.

“However, Fiji has a number of strong features for investors. It is able to develop production that meets ethical and sustainability standards, either as standalone brands or special categories of a primary brand.

“It can also deliver niche and highquality products that take advantage of its diverse environments (for example Fiji water, kava, turmeric and ginger).

“With the right industry policy, there is potential for more downstream processing in commercial agriculture, forestry (timber and furniture) and fishing.”

The report adds such support could take manufacturing sector output to a higher plane.