Fiji continues to boost growth

THE Fiji government has moved to un erpm economic growt with aging be taxation review and lifting of restrictions on wage increases, while more money is to be made available to the Fiji Development Bank. The European Community is to provide F$ 13 million (US$9.l "v o . million) tor a new tax free zone (TFZ) at g uva These moves come against a background of fears that the country’s trade deficit is growing and discontent at the Re giona Trade and Econom c gionai iraae and Economic Co-

operation Agreement (SPARTECA),

under which Fiji gains access to the Australian and New Zealand markets.

The new TFZ a. Suva will include a customs office and factories employing about 2000 people. The zones provide a 10 tQV Li;I j c 1 j-year-tax holiday and exemption from r • , excises for companies which export more than 95 per cent of their output The agreement with the EC is in the form of a grant of F 59.67 million, and a 30-year loan of Fs3 72 million Finance Minister Josevata Kamikamica said the new TFZ would be completed within three years, and will include the purchase of 33 hectares of land, the construction of 10,000 square metres of factory space, and manage-

ment training.

f ijians wanting to set themselves up in business will get further help with the

decision by the interim government to make another Fss million available to thC F f I Dw fT ,U Ban K “ f n ' d ‘° an n e “ ra ' sed *°™ F W°°o to F 5200,000, and it was hoped to S et more Fi J ians participating in

retailing and manufacturing industries.

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Other measures to help Fnians m- . . elude: research by the Fijian Affairs B° ar d to determine how Fijians have done in bLlsiness > Allocating Fs2o mil,ion to the board so that Fijians can bu V more shares in local enterprises, Co b “«'"g Fijian involvement in the Uni ° ust of Fiji, programmes to help Fijians set up businesses from natural resources whlch the y ow "> and a daily newspaper to be owned by Fijians. The minister warned that it would take time for these businesses to make profits and that much patience would be needed in 7 patience would oe needed m the earlv stages tiic cdiiy stages.

Thls plan coincided with daims that overseas investors have tried to exploit their Fl j lan J oint venture P a «ners. Viti Chamber of Commerce president Koto Vakarewakobau said many joint ventures were dominated by foreign partners even if they owned as little as 10 or 15 per cent of the company. She urged foreign partners to share their expertise with indigenous Fijian partners, as a commercial way of life was foreign to her

people

But life for all business people operating in Fiji should be made easier if the

interim government proceeds with its taxation plans. Prime Minister Ratu Sir Kamisese Mara told the third joint meeting of the Fiji-Australia and Australia-Fiji business councils that his administration was considering the tax breaks, and gradual lifting of wage restrictions. He said it was hoped the statutory limits on wages would soon end, but if the government completely withdrew wage determination it was feared an incomes explosion would result.

Turning to trade, the Prime Minister urged the business people at the meeting to work to reduce the trade gap between Fiji and Australia. He said the heavy trade imbalance persisted even with SPARTECA helping Fiji gain a share of the Australian domestic market. The president of the Fiji-Australia Business Council, Ikbal Jannif, went further: he called for a complete overhaul of SPARTECA now that Australia is set on a course of lowering tariffs across the board. The fear of losing its comparative advantage in this event has been pre occupying minds in Fiji and other South Pacific countries.

Meanwhile, the Reserve Bank of Fiji has expressed concern at the country’s increasing trade deficit, which is ex pected to hit the F 5344 million mark this year. The bank’s deputy governor, Hari Pal Singh, told the business council meeting that while Fiji’s exports were expected to increase by 20 per cent to F 5637 million, imports had been esti mated to top FS 1.11 billion and this gap had to be bridged with the nation’s foreign exchange reserves. □