Export-led growth:

the way forward

WITH the opening up of the Pacific region to other island countries as part of creating a “Pacific trade zone”, the importance of gearing your business to competitive export standards cannot be underesti mated.

Creating a vibrant private sector has always been the goal of many successive governments in Fiji and many other Pacific Island countries. This helps create jobs, increase Gross Domestic Product, and increase standards of living.

But, the private sector has to be ready for

the changes that opening up markets will certainly cause.

One of the big concerns is the slow ero sion of privileges under agreements such as SPARTECA and the Lome Convention.

Fiji’s High Commissioner to Australia, Mr Isikeli Mataitoga says there are many options for when such changes come about.

Using the example of the future of the Fiji Textile, Clothing and Footwear indus try, he said Rules of Origin (ROO’s) under SPARTECA will soon be irrelevant.

“In discussing what the future may hold for ROO’s - let us not forget by year 2010, the tariff reductions in Australia in almost

■ Fiji-Made Products For Export

all tradable goods coming off-shore will be zero tariff.

“When that position materialises, the rate of ROO would be irrelevant because other similar TCP products would enter the Australian market cheaply from Asia.

“What Fiji TCP should be looking at is to see ROO’s relaxation now that is condi tional to achieving certain outcomes.

These outcomes, when delivered, will reposition Fiji TCP with a competitive edge in markets, other than Australia, on the global environment.

“The changes within Fiji TCP that needs to take place have started taking place in some of the TCP companies; what is needed is for the whole industry to move to implement the changes,” he said.

Clearly, Pacific Island countries, Fiji included, cannot keep holding out for spe cial treatment. If there was ever a time to gear companies for export in competitive markets, it is now.

With most of Fiji’s big markets, such as Australia and New Zealand, moving towards implementing their World Trade Organisation commitments, anything that looks like a subsidy will soon be ancient

history.

There is no doubt, that agreements such as SPARTECA have given Pacific Island companies a chance to improve their posi tion and to gear themselves towards effi cient and quality operations.

Even some Australian companies have benefited through the Import Credit Scheme that was part of a larger package of tariff and other reforms.

“In practice the ICS created an incen

tive to export, by effectively subsidising

overseas purchases of Australian TCP products. This was not the aim of the scheme, rather its aim was to achieve a closer integration with the global industry by making the industry more trade-orient ed and capable of taking advantage of overseas opportunities,” Mr Mataitoga says.

Australian Leather Holdings says the ICS had: “... allowed ALH to accelerate investment in state-of-the-art technology e.g. computer controlled drums, automated water and chemical dosing systems, high technology waste water treatment and laser cutting machines for auto components...”

By providing more viable access to

export markets, the ICS had enabled small er companies to achieve scale economies.

As Bradmill Undare stated: "our ability to export is contingent on the existence of the ICS... without a strong viable export com ponent, our business will decrease, leading to increased costs, leading to fewer orders...”

The Australian Chamber of Manufacturers stated; “Over 80 per cent of firms surveyed stated that they support the continuation of the scheme. These firms either anticipate using the scheme in the near future, see the relevance of it to their future priorities and benefit from trading in credits”.

Norman Richie agreed that: “The Import Credit Scheme is a success and it has created jobs and export earnings.

It achieved its aim in encouraging export of our TCP products. Our TCP industry is now more outward looking and export driven”.

Under the scheme, TCP companies were able to cover marketing costs for export markets, invest in new technology and in product development.

Mr Mataitoga says, “the interaction of

the ICS and SPARTECA schemes, along with investment incentives offered by the Fiji government, have encouraged the development of the TCF industry in Fiji as we see today”.

The Fiji government agrees, saying: “The import credit scheme enabled manu facturers in Fiji to use Australian fabrics and leather at internationally competitive prices.

This scheme combined with duty free access into Australia enabled Fiji TCF manufacturers a genuine preference into Australia”.

However, the boom in exports has been brought about, there is one reality for post 2000 - markets will be opening up and to survive, let alone compete, Pacific compa nies will have to gear themselves to global standards.

There are already many companies in Fiji that can confidently say that they will not have a problem post 2000.

If Fiji, or any other Pacific Island coun try, is to progress, then it is these compa nies that will certainly lead the way with their exports. ■