SUNBIZ

‘More Potential in Manufacturing’

“We don’t want GDP driver to be just tourism, we want other industry sectors to contribute. Things like business services, information, communication and technology, construction and manufacturing,” he said.
02 Sep 2022 06:00
‘More Potential in Manufacturing’
From left: ANZ Fiji Country Head Rabih Yezbek with International Economist Kishti Sen on August 31, 2022. Photo: Selita Rabuku

While Fiji’s economy is progressively doing well, an international economist has warned that we should not get carried away.

ANZ’s Kishti Sen said the shift to diversify the economy hasn’t happened and it needs to happen quickly.

Mr Sen said the economy was doing better than what the official forecast suggests and was in line with their expectations.

 

“Our expectations towards the end of last year was that the tourism recovery would be strong, strong in-bound demand for travellers and we have seen that.”

“The tourism recovery is entrenched and our belief is that all the demand or expenditure that was lost at the height of the pandemic in 2020 and 2021, we will recover most of that this year or early next year.

“When we do that, where we end up is a place similar to 2019. Where we go from there is the question that policy makers should really be asking,” he said.

 

Mr Sen said the shift to a more broad-based economy was what Fiji needs and that’s what policy makers would have to grapple with.

“We need to think about how we can get more of the industry sectors contributing to GDP growth in the future.

“We don’t want GDP driver to be just tourism, we want other industry sectors to contribute. Things like business services, information, communication and technology, construction and manufacturing,” he said.

 

He added that there was big potential in manufacturing since it was the single largest industry sector for Fiji.

However if we look across the region, Ms Sen said Papua New Guinea has the largest economy with nine million population.

He added, at the moment with PNG’s massive investment (US$47b) in the pipeline it would provide jobs and a source of income to the people so there’s spending power.

“Fiji can capitalize on that by producing some of the goods here and exporting it to PNG. Already we are exporting biscuits into PNG but there’s an opportunity to produce more.”

 

“Companies here can establish joint venture partnership with PNG and set up a business there to take advantage of that, it would last for at least a decade.”

“So manufacturing has potential and we can do more there.”

He said Fiji can expand on commercial farming, Food, beverage, garment, clothing and Agriculture sector.

“This is some of the opportunities that exist and I think people responsible for making decisions should act on them.”

 

Tourism:

ANZ Fiji Country Head Rabih Yezbek said at the rate Fiji was going, we could break the all-time tourist arrival in the next few months.

He said there were possibilities to get 100,000 visitors a month between now and Christmas.

“The dynamics of international travel now are so much more different to 2019. There’s huge demand for travel and travel patterns are different to previous years.

 

“We’ve got many Australian families holidaying here outside of the school holiday. It didn’t happen in the past to pull your children out of school and bring them to Fiji.”

He said for the next six months the typical peak and trough for tourism will be a little bit different.

“November is usually a quiet month, now bookings are looking really strong, January is usually tied up, I wouldn’t be surprised if we have a strong January next year.”

 

Cost Of Living

At the press conference, Mr Sen questioned whether the Government’s $60m inflation mitigation package was enough? He claims inflation in Fiji was at least twice the official estimate of five per cent.

This means that the compensation should be more because the amount of money that households were spending on essential items was high, Mr Sen said.

“I think more support should be provided to the low income earners,” he said.

 

“I don’t think the Government should be running the economy like a department of finance where there is a single minded focus on the smallest budget deficit or surplus, because if we did that, there will be too much emphasis on large tax increases or drastic expenditure cuts.”

“The Government is the insurer of last resort for many great things.”

“Running the economy like a department of finance is not ideal, the Government should really think about providing a little bit more assistance to households given the price increase is more than what the official estimates says.”

 

Meanwhile the $60 million inflation mitigation package was announced during the 2022-2023 National Budget announcement where every child up to Year 13 in households with a combined income of less than $50,000 would receive $1 a day for six months.

Funds have been issued starting yesterday.

 

Feedback: selita.bolanavanua@fijisun.com.fj



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