Hello Fiji

Why PNG com­pa­nies should look at do­ing busi­ness in Fiji

Paradise - - Contents -

In re­cent times, Fi­jian com­pa­nies have been at­tracted to Pa­pua New Guinea be­cause of the size of its mar­ket. There are plenty of rea­sons for PNG com­pa­nies to also look in the other di­rec­tion, as del­e­gates to the 2019 Busi­ness Ad­van­tage Pa­pua New Guinea In­vest­ment Con­fer­ence heard ear­lier this year.

“There are good op­por­tu­ni­ties for PNG com­pa­nies in Fiji. It is a sim­i­lar econ­omy to PNG in many ways,” says Brett Hooker, who spent three years run­ning West­pac’s op­er­a­tions in PNG’s Me­lane­sian neigh­bour be­fore ar­riv­ing this year to run West­pac PNG.

First, Fiji’s econ­omy is trav­el­ling well.

Its gov­ern­ment is fore­cast­ing real GDP growth of 3.4 per cent for 2020. Inflation is com­par­a­tively low by PNG stan­dards: fore­casted at 4.1 per cent this year, fall­ing to 3.5 per cent in 2020.

Sec­ond, Fiji’s cor­po­rate tax rate is at­trac­tive. There is a low cor­po­rate tax rate of 20 per cent and a 10 per cent tax rate for listed com­pa­nies on the South Pa­cific Stock Ex­change.

Fiji has been ex­per­i­ment­ing with tax-free zones on its main is­land of Viti Levu.

“We’ve seen the suc­cess of the tax-free zone in Suva,” notes Ni­tij Pal, a long-serv­ing board mem­ber of the Aus­tralia Fiji Busi­ness Coun­cil.

Hooker says that PNG com­pa­nies will find good in­fra­struc­ture in Fiji. “They have got a world-class in­ter­na­tional air­port (at Nadi),

Fiji’s econ­omy is trav­el­ling well. Its gov­ern­ment is fore­cast­ing real GDP growth of 3.4 per cent for 2020.

very good ac­cess through to Asia, Europe, the Amer­i­cas – they are a hub for the

South Pa­cific as well. Fiji has ex­pe­ri­enced some phe­nom­e­nal growth numbers in re­cent times.”

Work to ex­pand Fiji’s sec­ond air­port, Nau­sori, is ex­pected to start in the next year, fa­cil­i­tat­ing di­rect flights to the cap­i­tal, Suva.

Hooker also points to the first-class ac­cess, cost and re­li­a­bil­ity of data in Fiji.

“This is one of the rea­sons why own­er­ship of smart­phones in Fiji is so high; ev­ery­one’s got at least one and some have two,” he says.

“One of the chal­lenges that we have in the South Pa­cific is we’ve got all these great bank­ing tools to pro­mote the dig­i­tal econ­omy, but we need re­li­able data and re­li­able net­works.”

One is­sue Pal thinks Fiji does need to ad­dress is its for­eign ex­change con­trols – some­thing with which PNG com­pa­nies would be fa­mil­iar.

“Some­times, if head of­fice wants to move money out of Fiji to fund other op­er­a­tions there can be dif­fi­culty. But it’s a small­ish econ­omy ex­posed to nat­u­ral dis­as­ters and in­ter­nal shocks – that’s the rea­son­ing the Re­serve Bank of Fiji has for for­eign ex­change con­trols to main­tain a sta­ble cur­rency.”

Tourism ac­counts for more than two-fifths of Fiji’s econ­omy and it re­mains a ma­jor source of busi­ness op­por­tu­ni­ties.

“We fa­cil­i­tate a lot of busi­ness on the ground in Fiji for both Aus­tralian com­pa­nies and in­ter­na­tional com­pa­nies … what you’re see­ing is a whole combinatio­n of small and medium enterprise­s en­ter­ing the mar­ket, pre­dom­i­nantly in tourism,” says Pal.

Nev­er­the­less, he notes, there are plenty of op­por­tu­ni­ties out­side this sec­tor, es­pe­cially given Fiji’s skilled and ed­u­cated labour force.

“As things start to im­prove in PNG, there’s a lot of op­por­tu­ni­ties both ways for both PNG and Fiji com­pa­nies. Lo­gis­tics man­age­ment is go­ing to be­come a growth area for Fiji, as is data ware­hous­ing and man­age­ment, be­cause they’re build­ing an ecosys­tem around busi­ness process out­sourc­ing.”

West­pac’s Brett Hooker … says Fiji’s cor­po­rate tax rate is ap­peal­ing.

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