Positive sign for future conditions
DEMAND for Fiji’s non-tourism operators – mainly service providers improved over the December quarter of last year with fewer firms reporting deterioration in sales or profitability in the second half of the year.
ANZ Research report on Pacific Economic Outlook with focus on Fiji said several factors helped prevent a deeper downturn such as government income support payments, early access to superannuation savings, record money transfers from abroad, financial help for small and medium enterprises and a pivot to construction projects, in particular a boost to first home owner grants.
One of the authors of the report Dr Kishti Sen said in a positive sign for future conditions, fewer businesses in the non-tourism economy reported a pessimistic view of the next 12 months, and sentiment around employment and investment improved, no doubt buoyed by vaccine developments.
He said further, steps towards digitalisation of business registration process, bringing tax registrations online and plans to digitalise the building permits process was helping improve business sentiment and investment intentions.
“I think the development partner support, particularly from the World Bank Group has been immense in shoring up the economy amidst the collapse of the key international tourism industry.
“Quick disbursement of funds have helped the Fijian Government execute its programs in line with the budget.
“Further, some of the development finance is aimed at making the private sector the engine of growth over the medium to longterm.
“Let’s face it, one thing the current pandemic has taught us is that we can’t be reliant on a few industries for GDP and jobs growth,” said Dr Sen.
“We need a more balanced economy where several industries contribute to economic growth.
“And this is where the private sector can come in and take Fiji’s manufacturing, commercial agriculture, fishing, tertiary and vocational education services, company back office support services, supply chain management, health and utility services to the next level.”
Dr Sen said there was always hopes for improvements so that the private sector could be more engaged in the economic development of Fiji.
“With development partner support and the government’s ongoing commitment to create a more business friendly climate, I think we can look forward to a more balanced economy in the future.”
Meanwhile he said the construction sector was also expected to do well, driven by building construction, both new dwellings and non-dwelling buildings.
In the report, Dr Sen said despite a tough operating environment in 2020, the value of building permits issued rivalled that of more normal years.
“Fast-tracked and streamlined approval process for obtaining a construction permit for commercial and industrial buildings through the Building Permits Evaluation Committee appears to be supportive of new developments.”