Fiji's economy slips and slides
SUVA, Fiji (CNN) -- Fiji's economy is continuing to weaken in the wake of last year's political turmoil, according to the latest survey by the Reserve Bank of Fiji.
In its latest quarterly review, the bank said the economy was contracting at a rate of 8.2 percent a year.
The review said lower sugar output meant there could be more revisions downward. Gold earnings were also down in the December quarter.
Fiji's economy is based largely on sugar exports, textile and garment manufacturing, mining and tourism. In 1999 it grew by almost 8 percent, but went into rapid decline after the political crisis that began in May 2000 with the attempted coup by George Speight and his supporters.
Fijians of Indian descent, who make up about 44 percent of the country's population of 830,000, control much of the commercial activity. Envy of their economic success by indigenous Fijians was a prime factor in Speight's push for power.
The tourism industry was hit hard by the images of violence and looting in Suva during the political crisis. The attempted mutiny in November by rebel soldiers at Suva's main army barracks was an extra blow.
However, tourism is starting to show signs of recovery following a marketing campaign.
Fiji's economy is worth about $6 billion, with the biggest contributor being services at 58 percent, followed by agriculture (16 percent), manufacturing (15 percent) and other industry (11 percent). Most of the labor force works in subsistence agriculture.
Almost all of Fiji's sugar is exported to the European Union.
The garment industry, which represents about a third of the manufacturing sector, also faces a difficult time as competition from low-cost producers such as China takes its toll.
The industry fears that big buyers of Fijian textiles, such as Australia and New Zealand, may turn to China and other alternative suppliers for reasons of cost and reliability of supply.
The Reserve Bank said the retail sector was also expected to contract. It said the indications for investment "continue to confirm the persistent low levels of investment in the economy".
Fiji's main export destinations are Australia, the EU, the U.S., Japan, New Zealand and other Pacific island countries. Australia and New Zealand supply most of its imports.
The Fiji dollar is worth about U.S.45 cents.
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