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Economy of Fiji

Fiji is one of the more developed of the Pacific island economies, although it remains a developing country with a large subsistence agriculture sector. In 2010, Fiji's economy grew by 0.1%. For 2011, the government forecasts a 2.7% growth rate. The government’s year-end 2011 inflation forecast is 7.0%. For many years sugar and textile exports drove Fiji's economy. However, neither industry is competing effectively in globalized markets. Fiji's sugar industry suffers from quality concerns, poor administration, and the phasing out of a preferential price agreement with the European Union that led to sugar price reductions of 36%. The European Union promised a large amount of financial aid to assist the ailing sugar industry, but, post-coup, has clarified that the aid will only be forthcoming if Fiji improves its human rights situation and moves quickly toward democracy. In 2010, the Fiji Government began implementing industry reforms, but cane and sugar production levels continue to decline. In 2005, the textile industry in Fiji markedly declined following the end of the quota system under the Agreement on Textiles and Clothing (ATC) and the full integration of textiles into the World Trade Organization (WTO) General Agreement on Tariffs and Trade. The income from garments plummeted by 47% in 2005 with the end of the ATC quotas. Garments now account for around 9% of Fiji's exports and sugar approximately 20.9%. Other important export crops include coconuts and ginger, although production levels of both are declining. Fiji has extensive mahogany timber reserves, which are being exploited. Fishing is an important export and local food source. During January to September 2010, fish was the leading domestic export. Gold from Fiji’s only gold mine is also an important export industry and is expected to continue its positive performance with rising gold prices. The most important manufacturing activities are the processing of sugar and fish. From 2000 the export of still mineral water, mainly to the United States, had expanded rapidly before decreasing in 2009. Water exports in the first three quarters of 2010 (January-September) totaled around U.S. $47.98 million (F$87.3 million). In recent years, growth in Fiji has been largely driven by a strong tourism industry. Tourism has expanded since the early 1980s and is the leading economic activity in the islands. Tourist arrivals grew by 16.3% in 2010. About 45% of Fiji's visitors come from Australia, with large contingents also coming from New Zealand, the United States, the United Kingdom, and the Pacific Islands. In 2010 more than 53,000, or around 8.4%, of the tourists were American. Fiji's gross earnings from tourism from January to November 2010 totaled $399.9 million (F$727.7 million), more than the combined revenues of the country’s top five exports (fish, water, garments, timber, and gold). Gross earnings from tourism continue to be Fiji's major source of foreign currency. Although tourism revenues yield a services surplus, Fiji runs a persistently large trade and current account deficit. The trade deficit in 2010 was expected to decrease by 15% to $738.9 million (F$1.3 billion) compared with 2009. Australia accounts for between 25% and 35% of Fiji's foods trade, with New Zealand, Singapore, the United States, the United Kingdom, and Japan varying year-by-year between 5% and 20% each. Since the 1960s, Fiji has had a high rate of emigration, particularly of Indo-Fijians in search of better economic opportunities. This has been particularly true of persons with education and skills. The economic and political uncertainties following the coups have added to the outward flow by persons of all ethnic groups. Indigenous Fijians also have begun to emigrate in large numbers, often to seek employment as home health care workers. Remittances from overseas workers, which grew 14% from January to May in 2010 compared with the same period in 2009, are second only to tourism as a source of foreign exchange earnings. Economy (all figures in U.S. dollars) GDP (2011 estimate): $3.269 billion. GDP per capita (2011 estimate): $3,773. GDP composition by sector: Services 59.7%, industry 30.4%, agriculture 9.9%. Industry: Types --tourism, sugar, garments. Trade (January-September 2010): Exports --$553.9 million: sugar, garments, gold, fish, mineral water. Major markets --U.K., Australia, U.S., New Zealand, Japan. Imports --$1.174 billion: mineral fuel products, machinery and transport equipment. Major source s--Singapore, Australia, New Zealand, China, U.S. ($43.96 million). Government net debt (2011 est.): $1.898 billion (F$3.481 billion).

Geography of Fiji

Fiji comprises a group of volcanic islands in the South Pacific lying about 4,450 km. (2,775 mi.) southwest of Honolulu and 1,770 km. (1,100 mi.) north of New Zealand. Its 322 islands range in size from the large--Viti Levu (about the size of the "Big Island" of Hawaii, and where Suva and 70% of the population are located) and Vanua Levu--to much smaller islands, of which just over 100 are inhabited. The larger islands contain mountains as high as 1,200 meters (4,000 ft.) rising abruptly from the shore. Heavy rains--up to 304 cm. (120 in.) annually--fall on the windward (southeastern) side, covering these sections of the islands with dense tropical forest. Lowlands on the western portions of each of the main islands are sheltered by the mountains and have a well-marked dry season favorable to crops such as sugarcane. Official Name: Republic of the Fiji Islands Area: 18,376 sq. km (7,056 sq. mi.). Cities: Capital--Suva (pop. 167,000), Lautoka (pop. 30,000), Nadi. Terrain: Mountainous or varied. Climate: Tropical maritime.

Government of Fiji

The 1997 constitution provided for a ceremonial president selected by the Great Council of Chiefs and an elected prime minister and parliament. However, in 2006 the armed forces commander, Commodore Voreqe “Frank” Bainimarama, overthrew the elected government in a bloodless coup d'etat. In January 2007 the interim military government was replaced by a nominally civilian interim government (the "interim government") headed by Bainimarama as prime minister. After the Court of Appeal declared the December 2006 coup and the interim government appointed in January 2007 unlawful, the 1997 constitution was abrogated and a state of emergency imposed on April 10, 2009. Bainimarama and his government established rule by decree after the abrogation. The constitutional Bill of Rights has not been revived, and despite the revival of the Fiji Human Rights Commission (FHRC) by decree, the FHRC is prohibited from investigating the abrogation of the constitution and the actions of the de facto government and security forces. Bainimarama and his Military Council control the security forces. After the abrogation of the constitution by President Iloilo on April 10, 2009, he signed decrees re-establishing the judiciary and his own position as President. Iloilo resigned in July 2009, and the interim cabinet appointed Ratu Epeli Nailatikau as President. Nailatikau is a former RFMF commander, diplomat, and Speaker of the House of Representatives (2001-2006). A decree provides that the Chief Justice is to act in place of the President in his absence, and no vice president has been appointed. Fiji maintains a judiciary consisting of a Supreme Court, Court of Appeal, a High Court, and Magistrate Courts. Since the 2006 coup, a number of High Court and Court of Appeal justices have resigned, claiming interference in judicial affairs. After the abrogation of the constitution on April 10, 2009, all sitting judges and magistrates were terminated, and some were reappointed to a new judiciary re-established by decree in May 2009. The Fiji Government has also drawn new judges and magistrates from Sri Lanka. All cases challenging the actions of the interim government since December 2006, its decrees, and the coup itself were dissolved by decree, which prohibits the judiciary from hearing challenges to the actions of the government since April 2009, the 2006 coup, and the abrogation of the constitution in April 2009. There are four administrative divisions--central, eastern, northern, and western--each under the charge of a divisional commissioner, all of whom are senior military officers. Ethnic Fijians have their own administration in which councils preside over a hierarchy of provinces, districts, and villages. The 14 provincial councils deal with all matters affecting ethnic Fijians. There is also a Rotuma Island Council for the island of Rotuma. POLITICAL CONDITIONS For 17 years after independence, Fiji was a parliamentary democracy. During that time, political life was dominated by Ratu Sir Kamisese Mara and the Alliance Party, which combined the traditional Fijian chiefly system with leading elements of the European, part-European, and Indian communities. The main parliamentary opposition, the National Federation Party, represented mainly rural Indo-Fijians. Intercommunal relations were managed without serious confrontation. However, when a cabinet with substantial ethnic Indian representation was installed after the April 1987 election, extremist elements played on ethnic Fijian fears of domination by the Indo-Fijian community, resulting in a military coup d'etat. This began what many now refer to as the "coup cycle." The most recent coup took place in December 2006, but has its roots in the previous 2000 coup and mutiny. Military commander Commodore Bainimarama helped resolve the 2000 crisis by imposing martial law. Bainimarama appointed an interim government led by interim Prime Minister Laisenia Qarase. Subsequently, Qarase was elected in 2001 and 2006, but pursued some policies favoring the indigenous Fijian community. One of the main issues of contention is land tenure. Indigenous Fijian communities very closely identify themselves with their land. In 1909 the land ownership pattern was frozen by the British and further sales prohibited. Today, 87% of the land is held by indigenous Fijians, under the collective ownership of the traditional Fijian clans (mataqali). That land cannot be sold and is held in trust by the Native Land Trust Board on behalf of the landowning units. Indo-Fijians produce more than 75% of the sugar crop but, in most cases, must lease the land they work from its ethnic Fijian owners. In 2005 and 2006, tensions rose between Bainimarama and Qarase over legislation proposed by the Qarase government concerning land ownership, traditional non-public ownership of the foreshore, and a reconciliation bill that opened the possibility to grant immunity to some coup participants from 2000. Bainimarama began to make demands and threats, and engaged in shows of military force to intimidate the Qarase government into backing away from the controversial policies. When the Qarase government did not accede to all military demands, on December 5, 2006, Bainimarama assumed the powers of the presidency, dismissed Parliament, and declared a temporary military government. Commodore Bainimarama was appointed interim Prime Minister in 2007; his interim government has pursued what he terms a "clean-up campaign" to root out what he considers to be large-scale corruption in Fiji. A number of civil servants, including the Chief Justice, were summarily suspended or dismissed due to unspecified corruption concerns. Many individuals who have spoken out against the coup government have been taken to military camps where they have been questioned and sometimes abused. Principal Government Officials Head of State (President)--Epeli Nailatikau Interim Head of Government (Prime Minister)--Josaia Voreqe Bainimarama Interim Minister of Foreign Affairs--Inoke Kubuabola Ambassador to the United States--Winston Thompson Permanent Representative to the United Nations--Peter Thomson Fiji maintains an embassy at Suite 240, 2233 Wisconsin Avenue NW, Washington, DC 20007 (tel: 202-337-8320). Type: Parliamentary democracy (overthrown by military coup in December 2006). Independence (from U.K.): October 10, 1970. Constitution: July 1997 (suspended May 2000, reaffirmed March 2001). Branches: Executive--president (head of state), prime minister (head of government), cabinet. Legislative--bicameral parliament; upper house is appointed, lower house is elected. Judicial--Supreme Court and supporting hierarchy. Major political parties: Soqosoqo Duavata ni Lewenivanua (SDL), Fiji Labor Party (FLP), United People's Party (UPP), National Federation Party (NFP), National Alliance Party (NAP), Nationalist Vanua Tako Lavo Party (NVTLP).

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History of Fiji

Melanesian and Polynesian peoples settled the Fijian islands some 3,500 years ago. European traders and missionaries arrived in the first half of the 19th century, and the resulting disruption led to increasingly serious wars among the native Fijian confederacies. One Ratu (chief), Cakobau, gained limited control over the western islands by the 1850s, but the continuing unrest led him and a convention of chiefs to cede Fiji unconditionally to the British in 1874. The pattern of colonialism in Fiji during the following century was similar to that in many other British possessions: the pacification of the countryside, the spread of plantation agriculture, and the introduction of Indian indentured labor. Many traditional institutions, including the system of communal land ownership, were maintained. Fiji soldiers fought alongside the Allies in the Second World War, gaining a fine reputation in the tough Solomon Islands campaign. The United States and other Allied countries maintained military installations in Fiji during the war, but Fiji itself never came under attack. In April 1970, a constitutional conference in London agreed that Fiji should become a fully sovereign and independent nation within the Commonwealth. Fiji became independent on October 10, 1970. Post-independence politics came to be dominated by the Alliance Party of Ratu Sir Kamisese Mara. The Indian-led opposition won a majority of House seats in 1977, but failed to form a government out of concern that indigenous Fijians would not accept Indo-Fijian leadership. In April 1987, a coalition led by Dr. Timoci Bavadra, an ethnic Fijian supported by the Indo-Fijian community, won the general election and formed Fiji's first majority Indian government, with Dr. Bavadra serving as Prime Minister. Less than a month later, Dr. Bavadra was forcibly removed from power during a military coup led by Lt. Col. Sitiveni Rabuka on May 14, 1987. After a period of deadlocked negotiations, Rabuka staged a second coup on September 25, 1987. The military government revoked the constitution and declared Fiji a republic on October 10. This action, coupled with protests by the Government of India, led to Fiji's expulsion from the Commonwealth of Nations and official nonrecognition of the Rabuka regime from foreign governments, including Australia and New Zealand. On December 6, Rabuka resigned as head of state and Governor General Ratu Sir Penaia Ganilau was appointed the first President of the Fijian Republic. Mara was reappointed Prime Minister, and Rabuka became Minister of Home Affairs. The new government drafted a new constitution that went into force in July 1990. Under its terms, majorities were reserved for ethnic Fijians in both houses of the legislature. Previously, in 1989, the government had released statistical information showing that for the first time since 1946, ethnic Fijians were a majority of the population. More than 12,000 Indo-Fijians and other minorities had left the country in the 2 years following the 1987 coups. After resigning from the military, Rabuka became prime minister in 1993 after elections under the new constitution. Tensions simmered in 1995-96 over the renewal of land leases and political maneuvering surrounding the mandated 7-year review of the 1990 constitution. The Constitutional Review Commission produced a draft constitution that expanded the size of the legislature, lowered the proportion of seats reserved by ethnic group, and reserved the presidency for ethnic Fijians, but opened the position of prime minister to all races. Prime Minister Rabuka and President Mara supported the proposal, while the nationalist indigenous Fijian parties opposed it. The reformed constitution was approved in July 1997. Fiji was readmitted to the Commonwealth in October. The first legislative elections held under the new constitution took place in May 1999. Rabuka's coalition was defeated by the Fiji Labor Party, which formed a coalition, led by Mahendra Chaudhry, with two small Fijian parties. Chaudhry became Fiji's first Indo-Fijian prime minister. One year later, in May 2000, Chaudhry and most other members of parliament were taken hostage in the House of Representatives by gunmen led by ethnic Fijian nationalist George Speight. The standoff dragged on for 8 weeks--during which time Chaudhry was removed from office by the then-president due to his incapacitation. The Republic of Fiji military forces then seized power and brokered a negotiated end to the situation. Speight was later arrested when he violated its terms. In February 2002, Speight was convicted of treason and is currently serving a life sentence. In July 2000, former banker Laisenia Qarase was named interim prime minister and head of the interim civilian administration by the military and Great Council of Chiefs. Ratu Josefa Iloilo was named President. The Supreme Court reaffirmed the validity of the constitution and ordered the Chaudhry government returned to power in March 2001, after which the President dissolved the Parliament elected in 2000 and appointed Qarase head of a caretaker government until elections could be held in August. Qarase's newly formed Soqosoqo Duavata ni Lewenivanua (SDL) party won the elections. In May 2006, the SDL was re-elected to a majority in the Parliament, Qarase continued as Prime Minister and formed a multi-party cabinet, which included nine members of the FLP. In the lead-up to the May 2006 election and beginning again in September, tensions grew between Commander of the Fiji Military Forces Commodore Frank Bainimarama and the Qarase government. Bainimarama demanded the Qarase government not pursue certain legislation and policies. On December 5, 2006 Bainimarama removed elected Prime Minister Qarase from his position and dissolved Parliament in a military coup d'état. Qarase was exiled to an outer island. On January 4, 2007, Bainimarama reinstated President Iloilo, who stated the military was justified in its behavior and promised them amnesty. The following day Iloilo appointed Bainimarama interim Prime Minister. Over the following weeks Bainimarama formed an "interim government" that included, among others, former Prime Minister Chaudhry and former Republic of Fiji Military Forces heads Epeli Ganilau and Epeli Nailatikau. On January 15, 2007, President Iloilo decreed amnesty to Bainimarama, the Republic of Fiji Military Forces (RFMF), and all those involved in the coup from December 5, 2006 to January 5, 2007, and he claimed to ratify all the actions of Bainimarama and the RFMF. The coup was widely condemned by regional partners, including Australia, New Zealand, the United States, and the European Union. In April 2007, the interim government suspended the Great Council of Chiefs after the council declined to appoint the interim government's choice as vice president. In October 2007, the interim government launched a People's Charter initiative, ostensibly to remove communal or ethnic voting and improve governance arrangements. The interim government has pledged itself to hold elections in March 2009, although the interim government's rhetoric continues to create uncertainty about the firmness of this commitment. A series of court cases challenging the constitutionality of the coup and its aftermath are pending.

People of Fiji

Most of Fiji's population lives on Viti Levu's coasts, either in Suva or in smaller urban centers. The interior of Viti Levu is sparsely populated due to its rough terrain. Indigenous Fijians are a mixture of Polynesian and Melanesian, resulting from the original migrations to the South Pacific many centuries ago. The Indo-Fijian population grew rapidly from the 60,000 indentured laborers brought from India between 1879 and 1916 to work in the sugarcane fields. Thousands more Indians migrated voluntarily in the 1920s and 1930s and formed the core of Fiji's business class. Native Fijians live throughout the country, while Indo-Fijians reside primarily near the urban centers and in the cane-producing areas of the two main islands. Nearly all of indigenous Fijians are Christian; more than three-quarters are Methodist. Approximately 80% of Indo-Fijians are Hindu, 15% are Muslim, and around 6% are Christian. Some Indo-Fijians have been displaced by the expiration of land leases in cane-producing areas and have moved into urban centers in pursuit of jobs. Similarly, a number of indigenous Fijians have moved into urban areas, especially Suva, in search of a better life. Meanwhile, the Indo-Fijian population has declined due to emigration and a declining birth rate. Indo-Fijians currently constitute 37% of the total population, although they were the largest ethnic group from the 1940s until the late 1980s. Indo-Fijians continue to dominate the professions and commerce, while ethnic Fijians dominate government and the military. Nationality: Noun --Fiji; adjective --Fiji or Fijian. Population (mid-year 2011 est.): 851,745. Age structure --28.5% under 14; 8% over 60. Annual population growth rate (2011 est.): 0.5%. Ethnic groups: Indigenous Fijian 57%, Indo-Fijian 37%. Religion: Christian 52% (Methodist and Roman Catholic), Hindu 33%, Muslim 7%. Languages: English, Fijian, and Hindi are official languages. Education: Literacy (2004)--93%. Health: Infant mortality rate (2009)--15/1000; life expectancy at birth (2009) -- 69 years. Work force: Agriculture --67%. Unemployment (2009): 8.6%.
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