Stronger business investment is being highlighted as crucial to overcoming the challenges faced by successive governments in Fiji as they aim to implement extensive capital works programs designed to enhance core service delivery. Dr. Kishti Sen, an economist with the ANZ Group Pacific based in Sydney, shared these insights while assessing the national budget’s performance for the current financial year.
Dr. Sen emphasized that governments often lack the resources to fulfill all budgetary promises, particularly in an economic environment where growth has not translated into significant job creation in the formal sector. He noted that challenges arise from balancing past commitments, addressing vested interests, managing deficit implications, and handling expenditures related to recovery after natural disasters.
The economist pointed out that improving business investment is key to transforming the current situation. He expressed optimism that Fiji’s surging space requirements are fostering renewed interest and investment in various sectors, including hotels, office towers, shopping centers, warehouses, and factories. Furthermore, he highlighted Fiji’s evolving role as a regional distribution hub, along with access to financing and increasing foreign investment interest, as significant contributors to the anticipated upturn in commercial and industrial real estate.
Dr. Sen acknowledged that while private construction investment is gradually rising, it remains 24% below its recent peak, indicating a need for acceleration in project commencement rates despite the presence of a robust private investment pipeline. Encouragingly, building approvals data has shown substantial improvement recently, raising hopes that many permitted projects will enter the construction phase in the upcoming year.
He noted that new business investment levels were somewhat disappointing this year, calling for a shift towards a more mixed economy that could better diversify sources of economic growth. Currently, Fiji’s economy continues to heavily rely on international tourism for jobs and investment growth.
In addition, Dr. Sen remarked that overall public demand, which encompasses both operating and capital expenditures, remains robust and is crucial for sustaining jobs during this transitional phase. This sustained demand is, in turn, supporting household consumption, which plays an essential role in bolstering the economy.
With the right strategies and renewed focus on business investment, there is potential for Fiji to achieve a more resilient economic growth trajectory while improving the quality of life for its residents.
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