INVESTMENT AND THE GROWTH OF THE AUDIO-VISUAL SECTOR ARE CONTRIBUTORS TO EMPLOYMENT AND ECONOMIC ACTIVITIES
THE RESERVE BANK OF FIJI’S ECONOMIC REVIEW STATES THAT INVESTMENT HAS REMAINED UPBEAT IN 2017 Most investments in Fiji have been focused on the primary industries; services, such as finance, hotel and tourism related activities, and telecommunications; an
Iwish to reiterate the point made earlier, that the Fijian economy has been experiencing eight consecutive years of unprecedented levels of economic growth.
Madam Speaker, this feat has never been achieved ever before.
Over the past five years we have experienced an average growth of 4.5 per cent, with 5.6 per cent in 2014 being the highest recorded for decades.
The upward trajectory is forecasted to continue in the years to come.
Investments in Fiji
One of the key contributor to this sustained economic growth is investments.
Investments have remained very positive, contributing over 25 per cent to the GDP, and most importantly private sector investments have contributed approximately 15 per cent. Furthermore, the Reserve Bank of Fiji’s economic review states that investment has remained upbeat in 2017. New lending by commercial banks for investments increased by an average of 23 per cent in 2017.
In terms of foreign direct investments, we have seen an upward trend for the past decade. According to the World Bank Group/ IFC, the average annual inflow of foreign direct investment (FDI) in the country has reached US$320 million (FJ$ 651 million).
This increased trend in flows has enabled a continuously increase in FDI stock-to-GDP ratio, which averaged 87.2 per cent for the 2013-2015 period. This, Madam Speaker, is way above the East Asian and Pacific region average of 38.6 per cent.
Madam Speaker, for the same period, the FDI inflows to GDP in Fiji has been around 7.2 per cent, which is higher than the East Asia and Pacific regional average of 4.3 per cent.
Most investments in Fiji have been focused on the primary industries; services, such as finance, hotel and tourism related activities, and telecommunications; and manufacturing industries, such as food and beverages. It has also been noted that key investment source markets for Fiji have traditional been Australia and New Zealand with China showing an emerging trend.
This is also attributed to the in-roads that the Ministry has been able to make into these countries through the effective marketing and promotion undertaken by our Trade Commissions in these countries.
I am also pleased to inform the August House that after an absence of over two decades, Fiji once again has a Trade Commission in New Zealand. The Office is now operational and is supporting potential investors to consider Fiji as a business destination, and assisting Fijian exporters to tap into opportunities in New Zealand. This is a major accomplishment for the Fijian Government and is reflective of the importance we place in positioning Fiji as a hub for trade and investment in the region, as well as strengthening our economic relations with New Zealand.
The strong growth of investments has been made possible by the long term, forward-thinking and pro-growth policies of the FijiFirst Government. In addition, the Government has continued to develop infrastructure that is vital for trade and investment.
The 2017-2018 national budget continued the commitment of the Government in providing the enabling environment to investors and businesses. The recently undertaken analysis of investment inflows by the World Bank Group/IFC has identified opportunities for Fiji in attracting efficiencyseeking investment.
Efficiency-seeking investments is determined to be the leading contributor to a country’s productive capacity and portfolio diversification.
In addition, in order to capitalise on our hub status and get the best economic results from investments, and achieve structural transformation, we need to focus on attracting investors that are export-oriented.
Continuing and new initiatives
The 2017-2018 budget provides for a number of continuing and new initiatives that focus on building the manufacturing, services and ICT sectors and encouraging investments in the production of high-quality finished goods.
One such initiative is the Wairebetia Economic Zone.
The Zone will target investments from leading ICT, manufacturing, supply-chain management and other medium-to-large-scale firms.
There will be tailor-made incentives for the investments in the Zone. The implementation of the Wairebetia Economic Zone is well underway, with the project being steered by an inter-agency task force. Consultants have also been recruited in the areas of project management, master planning and design of the Zone.
Protection of the environment
We will ensure that a rigorous environmental impact assessment is undertaken to ensure a balance between protection of the environment and achievement of national development objectives, such as creation of employment, uplifting of livelihood of people, supporting micro, small and medium enterprises as part of supply chain and spurring on overall economic activity in the West.
It is anticipated that once the design phase is completed, development of the site will begin later this year.
We have already received significant interest from international investors and financiers to partner with the Fijian Government on this critical project.
Audio-visual industry
I wish to draw the attention of this August House to the audio-visual industry, which has shown significant growth in the past few years.
The past three years has seen this industry grow exponentially.
And there are strong signs that the industry will continue its growth trajectory
The audio-visual industry, has been an industry that has not been the focus of discussions or debates over the years.
The previous Governments have not given the audio-visual industry the due credit or attention it needed. The Fijian audio-visual industry was given a boost in 2012 by increasing the Film Tax Rebate to 47 per cent. This, Madam Speaker, is the best film incentive in the world and has gained the attention of the film-making world andthe producers from the United States of America, India,Australia and Europe.
Foreign production activity
The growth of this emerging industry relies on foreign production activity to fuel it.
Hence, the more foreign productions come into the country, the more economic activities are generated by this industry.
The Fijian audio-visual sector is forging its way to becoming a fully-fledged local industry that supplies sustainable employment and sustainable returns for investment.
In terms of numbers, the industry, in the last three years, has shown exceptional performance.
In 2015, there were 42 productions with a budgetary value of $9.9 million. This value increased to $308 million, in terms of total budgetary value of all the production in Fiji, in 2017. The number of productions also increased by 76.2 per cent in 2017.
It is worth noting that in 2015, the local spend by the productions was valued $5.8 million, which increased by $119.2 million or by 2,055 per cent in 2017, to $125 million.
The economic activity created by the audio-visual productions in 2017 is approximately $350 million, which is an increase of $333.8 million compared to 2015.
Madam Speaker, these productions spend large amounts of money, typically over a three to four-month period.
Few industries can match the injection of foreign income into Fiji at the pace that foreign film productions can. For example, a large production will spend $15million over three months directly into the Fijian economy.
The increase in large film productions has led to increased employment of local talent. Furthermore, local vendors are engaged to supply products and services to the productions.
These include:
• hotel accommodation
• land, air and sea transportation
• catering
• hardware and building materials
• equipment hire
• financial, insurance and professional services
There is also investment by locals into new areas of businesses that can provide technical support to the industry, for example, set and prop designs.
There is also investment by locals into new areas of businesses that can
Fiji once again has a Trade Commission in New Zealand. The Office is now operational and is supporting potential investors to consider Fiji as a business destination, and assisting Fijian exporters to tap into opportunities in New Zealand.
provide technical support to the industry, for example, set and prop designs.
In addition, Madam Speaker, the benefits are not limited to just employment and businesses but includes payment of location fees to landowners where the production is located.
Most productions have been undertaken in maritime zones and smaller townships.
Benefits to community
I wish to highlight an example of the benefits to the local community from audio-visual productions. Example of Benefits to the Local Community Pacific Line Productions Pte Ltd – Koh Lanta, Robinson, Survivor (French, Polish and Swedish versions of Survivor) have spent in Yasawa (See Table 1)
I wish to emphasise that the $2.8 million direct benefit to the local community of Yasawa Islands would not have been realised if the film production had not taken place there.
Large productions have also undertaken development and upgrade of infrastructure, such as roads and jetties in remote location to facilitate their access to certain filming locations that have generated widespread benefits for the locals residing in those areas.
Some of the major productions that have been undertaken in the past three years, include (See Table 2) Television shows such as Survivor US, which is one of the largest television productions in the world is viewed by over nine million people per episode and has a global audience of 120 million viewers.
KohLantaFidji is France’s most popular reality television show and is viewed by 5.1 million viewers per episode.
Film tourism
As we can see the benefits from the audio-visual sector is far-reaching as it puts on display to a global audience what Fiji has to offer not only as a filming destination but also as a tourism destination.
Studies show that wherever a successful film has been shot, that location has experienced a growth of 54 percent in tourism arrivals in the four years following the productions – many examples of films increasing tourism, include: (See Table 3)
Film tourism is a growing phenomenon worldwide, which Governments around the worldhave started paying attention to it and are providing the relevant resources for the development of their audio-visual industries.
In this regard, with the support of the Ministry of Economy, the Ministry has been able to provide the relevant resources to Film Fiji.
Since 2015, Film Fiji’s budget has increased by 133 percent to over $2 million.
This is primarily to support Film Fiji’s marketing and promotion activities in key markets, such as US (Hollywood), India (Bollywood), China, to name a few.
The five-year and 20year National Development Plan (NDP) provides a clear link between tourism promotion and the development of the audio-visual sector.
In addition, the NDP also states that to improve prospects for the audio-visual industry and filmmaking there needs to be partnership with the private sector.
This will include the development of large production studios, enhanced availability of specialised equipment and nurturing of local talent.
The Fijian Government will continue to provide the relevant resources for the marketing and development of the audio-visual sector and provide an enabling environment to encourage investment into related infrastructure.
I thank you for allowing me this opportunity to take the floor and provide an update to this August House on the audio-visual industry and the contribution to the GDP. VinakaVakalevu.
The Fijian Government will continue to provide the relevant resources for the marketing and development of the audio-visual sector and provide an enabling environment to encourage investment into related infrastructure.