Renewed interest in Fiji from Australian investors
By Jemima Garrett
There are signs of renewed Australian investment interest in Fiji in the wake of Foreign Minister Julie Bishop’s visit late last week.
Ms Bishop’s trip to Suva was her first since post-coup elections restored parliamentary government in the country.
The Australia-Fiji and Fiji-Australia Business Councils held a two-day forum to coincide with Ms Bishop’s visit.
More than 100 business leaders from both countries attended the forum.
Business links between Australia and Fiji cooled following the 2006 coup, but not as much as political links. They still have not returned to pre-coup levels.
Fiji’s prime minister, Frank Bainimarama, and Ms Bishop both spoke of plans to reinvigorate trade and investment.
"Clearly, the indications are that on both sides there is a good intent to bring the two nations together in terms of trade and business participation, given particularly the emotional connection that we know the two countries have, which as we know is very, very strong," ANZ Pacific CEO Vishnu Mohan said.
"It is all about people. There are so many Fijians who have business interests in Australia – they have got houses they have got children going to school.
"Australians outnumber everyone else in terms of tourist arrivals going to Fiji, so, all in all, I thought it was a very, very positive two days and we could see the warmth and the good intent behind the relationship from both sides."
Mr Bainimarama told the forum there is much significant untapped potential in Fiji’s trade with Australia and new opportunities for investment, including as a result of the government’s policy of making more state land available.
In the tourism industry, plans are afoot for expansion and refurbishment of some of Fiji’s lucrative resorts.
Australia-Fiji Business Council president Greg Pawson said he also saw opportunities for growth in other sectors.
"There are some exciting things happening in relation to other sectors such as agriculture, manufacturing," he said.
"Fiji is looking to put itself forward as a potential call centre base for companies, software developers, there are a lot of exciting things going on."
Australian investors still wary but optimistic
Before the election, there was a feeling among Australian investors that with other elements of democracy such as a free media, independence of the judiciary and an active civil society still a way off, they would continue to tread warily.
That feeling remains, but appears to be coloured with newfound optimism.
Australia is still by far the biggest source of foreign investment in Fiji and its biggest trading partner but it has been losing market share.
In the post-coup years, Fiji has accelerated its trade with countries in Asia and focused more on the Melanesian Spearhead group, which includes Papua New Guinea, Vanuatu and Solomon Islands.
Mr Mohan said Australian investors face increased competition in Fiji.
"Clearly it is going to be a challenge for Australia to break into that, but it is how they find that niche and how they go about doing it," Mr Mohan said.
Since the 2006 coup ANZ figures show that Chinese investment in Fiji has gone from $US25 million to around $US420 million.
Mr Mohan said he does not see this growth stopping.
"I think it will continue to grow because the Chinese have positioned themselves – and it is not just Fiji, [it’s] across the Pacific," he said.
"You will see a lot of Chinese interests in many areas, whether there is mining, or infrastructure development or trading or properties, and that will continue to happen. You can’t stop that."
Mr Bainimarama has thrown his weight firmly behind the proposed PACER Plus trade agreement, saying it would foster development in the whole region as well as Fiji, but made that conditional on addressing the trade imbalance between the two countries and significantly improving access for Fijian products in Australia.
Mr Pawson acknowledged there were problems with market access for products like ginger but said he believed problems with the trade balance are overblown.
"The prime minister, Bainimarama, made a comment, perhaps the only subtly negative comment in his speech, around the trade imbalance, where he talked about the fact that Australia exports considerably more to Fiji than Fiji does to Australia," he said.
"What he is not taking into account is service industries, the service industry sector and 350,000 people going there every year for a holiday contributes significantly to Fiji’s economy.
"So I think it is important to call that out. And on that basis the Fiji government has deliberately looked to other markets but that will all be bridged as we restore the relationship over time, I am sure."