RESTRICTED Report No. EAP-18a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE ECONOMIC PROSPECTS OF FIJI October 6, 1970 East Asia and Pacific Department CURREWCY IQUIVALENTS U.So $1.00 F$ 0087 Fo $000 US$ lol5 TABLE OF CONTENTS Page No. BASIC DATA SUMMARY AND CONCLUSIONS Chapter I. Recent Performance 1 II. The Transition to Independence 13 III. Development to 1975 29 Annex A. A Short-Term Projection Model of Fiji B. UNDP Pre-Investment Studies MAP STATISTICAL APPENDIX This report was prepared by a mission which visited Fiji in June 1970. The members were Messrs. G. Thompson (Chief), D.K.H. Lee, R.G. David, E.R. Lim and N.E.S. Mutter (Consultant). Mr. J.A. Simnons contributed the sections on tourism.  Basic Data Area: 7,055 square miles Political Status: British Crown Colony with independence scheduled on October 10, 1970 Racial Composition of Population: Density: 75 per sq. mile 285 per sq. mile of Fijian 42% arable land Indian 50% Others 8% Average Annual Growth Rate 1969 1970 1965-1969 Actual Estimate (percent) Population (mid-year) 513,900 526,500 2.7 Gross National Product in current prices (F$ million) 173.0 187.7 7.9 GNP at 1965 prices (F$ million) Consumption Private 105.7 110.3 2.4 Government 18.9 20.2 4.8 Investment Private fixed capital formation 28.8 32.4 16.8 Government fixed capital formation 10.5 11.7 9.5 Addition to stocks 1.3 1.6 - Net exports of goods and services -3.4 -73 Net factor income from abroad -5.9 -6.2 - Gross National Product 155.9 162.7 5.2 GNP per capita (F$) 303 309 2.3 Gross Domestic Product (F$ million, at current prices) Agriculture 46.2 48.2 3.6 Mining and manufacturing 21.4 21.9 5.8 Construction, power and transport 28.5 32.6 17.8 Trade and finance 26.1 28.2 5.3 Rental and services, n.e.s. 41.4 46.7 10.9 Public Finance (F$ million) Current revenues 37.6 36.8 10.5 Current expenditures 34.4 35.7 9.7 Surplus 3.1 1.1 19.5 Capital Expenditures 8.5 11.4 5.7 -2- Average Annual Growth Rate 1969 1970 1965-1969 Actual Estimate (percent) Ybney and Banking (F$ million) Money supply 33.6 n. a. 10.0 Time and savings deposit 24.5 n. a. 10.6 Total bank credit outstanding 17.2 n. a. 9.0 Price Indices Retail price (1960 = 100) 127.3 n. a. 2.4 Export price (1965 = 100) 108 n. a. 2.0 Balance of Payments (F$ million) Phrchandise exports, f.o.b. 47.2 48.3 5.4 Merchandise imports, f.o.b. 63.1 72.1 7.5 Trade Balance -15.9 -23.8 - Net invisibles 4.6 7.9 -1.1 Net transfers 2.9 n. a. 4.8 Balance on current account -8.4 n. a. Tourist Receipts (F$ million) 20.9 26.7 29 Commodity concentration of domestic exports (1969) Sugar products 65.9% Coconut products 10.4% Gold 7.7% External Public Debt as of December 31, 1969 Total debt outstanding US $ 109205POOO Total annual debt service (1969) US $ 938.9000 Debt service as percentage of exports of goods and non- 0.7% factor services SUMMARY AND CONCLUSIONS i. The previous Bank economic report on the economy of Fiji (EA-172a) was issued on June 16, 1968. Fiji, a group of South Pacific islands on the main trade routes between North America and Australasia, is a primarily agricultural economy which is still largely dependent on sugar and copra exports but places increasing reliance on tourism for economic growth. It will become independent on October 10, 1970. ii. The performance of the economy over the last five years has been satisfactory. Gross domestic product expanded at an average annual rate of 5.0 percent in real terms and GNP at 5.9 percent, although there were very considerable fluctuations over this period. Gross investment in real terms increased by 13 percent annually and could reach 28 percent of GNP in 1970. With a decline in population growth from 3.0 to 2.4 percent bet- ween 1966 and 1969, attributable at least partly to an effective family planning program, per capita income grew at 2.3 percent per annum. Private per capita consumption, however, is only now approaching the level achieved in 1965, and the rate of unemployment appears to be rising beyond 6 percent. iii. There has been a significant change in the structure of the economy since 1966. The shares of agriculture, mining and manufacturing in GDP declined from over 45 percent in 1966 to under 40 percent in 1970 during a period of rapid growth in tourism and in the construction and infrastructure sectors. The pattern of foreign exchange earnings altered, with tourist receipts growing at 33 percent per annum from 1966 to 1970 against a trend growth in sugar and other merchandise exports of under 5 percent per annum. Commodity imports increased by 15.5 percent per annum from 1966 and the trade deficit grew from 14.4 percent of merchandise exports in that year to almost 50 percent estimated for 1970. External balance was maintained by earnings from tourism and an inflow on capital account estimated in 1970 at F$16 million or 10 percent of GNP. iv. The Government's strategy for economic development over the next five years is formulated in the Sixth Development Plan (DP VI). As in the earlier plans, the core of DP VI will be the Government's investment prog- ram which is expected to be of the order of F$82 million over the next five year period. For the economy as a whole the projected growth in domestic product is 6.9 percent. Tourist-related services are postulated as the leading sector with a growth rate of 25 percent per annum. Emphasis is also to be placed on export growth and import substitution. Investment is projected to grow at more than 10 percent per annum, exceeding 32 per- cent of GNP in 1975. v. The development strategy appears appropriate. The best develop- ment prospects are undoubtedly in tourism. With 15-20 percent growth in tourist traffic, tourist receipts could increase to about F$54 million in 1975. On the other hand, prospects for merchandise exports are less favor- able. International quotas for sugar exports are unlikely to expand. Dev- elopment of other exports, apart from copra, will be hindered by Fiji's small size, isolation and comparatively high labor costs. Import substitu- tion could generate additional increases in domestic output but, as many - ii - of the opportunities in agriculture and manufacturing have already been exploited, further substitution will be somewhat limited. Nevertheless, the economy appears capable of a growth rate at least approaching the 5 percent per annum of the past five years if appropriate government policies, especially in relation to foreign investment, are maintained. vi. This lower growth rate would be more clearly within the capacity of the public and private sectors. The public investment program of DP VI is ambitious in relation to past performance and, in addition, the present high rate of private investment will be difficult to maintain, much less to accelerate. The construction sector, in particular, appears to have been reaching capacity in the last two years and further expansion will be difficult in the short run. Although the rate of investment in tourist- related services, non-sugar manufacturing and infrastructure might be expected to increase further, investment in other sectors could stabilize at approximately the peak rate achieved in 1970. On this basis total in- vestment in 1975 would be about 26 percent of GNP. vii. Fiji has a relatively high per capita GNP (an estimated F$356 or US$410 in 1970), good general education and health services and a sound administrative system. It will enter independence on a firmer econ- omic base than many new countries. Balance of payments problems have been avoided, and equilibrium should not be difficult to maintain. Minimal foreign borrowing has kept public debt service ratios low (1.1 percent of commodity exports in 1969) and debt service on private account is not significant. Debt service ratios in 1975 are estimated at 3.0 percent of commodity exports and 1.3 percent of non-factory export receipts for goods and services, the difference indicating the importance of tourism. Fiji can be considered creditworthy for Bank lending, on its own account, follow- ing independence. I. RECENT PERFORMANCE 1. The only previous Bank economic report on Fiji (EA-172a issued on June 10, 1968) was prepared following a mission in November, 1967. The purpose of this report is to update the earlier appraisal of economic performance and policies, analyse the current economic situation, and provide an evaluation of development prospects, external capital require- ments and creditworthiness in the context of Fiji's impending application for Bank membership. 2. Fiji, at present a British colony, is a group of tropical islands in the South Pacific with a total area of 7,055 square miles and a popula- tion of about 527,000 in 1970. There are over 100 inhabited islands, but the two largest, Viti Levu and Vanua Levu, cover 87% of the land area. The nominal population density is not high -- 75 persons per square mile - but the larger islands are mountainous. Only 12% of land, on the coast and in narrow valleys, is classed as arable, and another 18% as suitable for pasture or tree crops, especially coconuts. 3. The colony has nevertheless developed as an exporter of agricul- tural commodities. Onto a typical Pacific copra economy has been grafted an efficient smallholder sugar industry established in the 19th century with indentured labor from India and the main reason for Fiji's relatively high per capita income. There is also a wide range of other crops, the medium and small-scale industries compatible with market size, some mineral development and a developed service sector within which tourism now has a leading role. Development has been concentrated in the main island of Viti Levu, which contains over 70% of the population. Per capita GNP has grown to an estimated F$357 (US$410) in 1970 and living standards are higher than in many developing economies. 4. The social and political structure is more complex than the size of the population might indicate. Fiji is a multiracial society in which the original inhabitants have in recent years been outnumbered by other ethnic groups. 1/ Indians now make up 50% of the population, Fijians 42% and there are sizeable Chinese, other Pacific Island and European and part- European minorities. The Fijian population is mainly rural and, while providing about one-third of the non-agricultural labor force, is under- represented in some economic sectors, particularly commerce. Modern agri- culture, including sugar production, is largely Indian. Cash incomes vary widely between regions and ethnic groups, with rural Fijians at the lower end of the range. A separate administrative system introduced to protect the land and customs of Fijians has achieved its objectives but left this part of the population relatively unprepared for economic development. 1/ The term Fijian refers to the distinct Pacific race whose ancestors ceded the islands to Great Britain in 1874. There is no term in general use to describe the population of Fiji as a whole. - 2 - 5. The major constitutional issue during the movement towards self- government in recent years has concerned the electoral system. The intro- duction of a common electoral roll was resisted by the Alliance Party (mainly Fijian and European) which now forms the Government. An accommoda- tion by the new leader of the opposition Federation Party (mainly Indian) led to agreement at talks in London in April 1970 on a new constitution under which membership of the Lower House will be determined by complex arrangements for communal, "cross" and general voting similar to those at present in force. The Fijian Council of Chiefs will be strongly represented: in a nominated Upper House. 6. Fiji will become independent on October 10, 1970, with Dominion status within the British Commonwealth. It is expected to be the first Pacific Island member of the United Nations, the IMF and the Bank. Growth and Change since 1965 7. Within this framework, the performance of the economy over the last four years has been satisfactory. In 1965 a sharp fall in the export price of sugar and a declining output of cane combined to produce two con- secutive years of depressed demand and low level of output in Fiji. Since then, however, a burgeoning tourism industry and some agricultural diver- sification have tended to reduce the economy's dependence on sugar. With a growth rate of 33% per annum since 1966, tourism revenue is expected to exceed $26 million in 1970, roughly the same order of magnitude as sugar exports. Over the same period, gross investment in real terms increased by 13% per annum to an estimated 28% of GNP in 1970. These factors are largely responsible for the GNP growth rate of almost 6% in real terms. Population increased by 2.8% per annum over the period; thus real per capita income appears to have grown at an annual average rate of 3.1%. See Table 1. - 3 - Table 1: GROSS NATIONAL PRODUCT (GNP) IN 1965 PRICES (F$ million) Average Annual Growth Rate 1966 1969 1970 1966-70 (%) Prel.Est, Consumption Private 94.7 105.7 110.3 3.9 Government 17.0 18.9 20.2 4.4 Investment Private 13.6 28.8 32.4 24.0 Public 8.5 10.5 11.7 8.3 Increase in stocks 5.9 1.3 1.6 -28.1 Exports of goods & services 50.0 73.6 78.5 11.9 Imports of goods & services -56.0 -77.0 -85.8 11.3 Net factor income from abroad /1 - 3.2 -- 5.9 - 6.2 18.0 Statistical discrepancy - 1.4 - - - Gross National Product 129.1 155.9 162.7 5.9 Population (million) .472 .514 .527 2.8 GNP per capita (F$) 274 303 309 3.1 /1 Excludes unidentified savings of foreign enterprises in Fiji. Source: Table 2.2 of the Statistical Appendix. 8. Consumption and Savings - A large part of the increase in national income has gone into increased savings. The share of private consumption declined from 73.4% of GNP in 1966 to an estimated 67.8% in 1970. Over the period, private consumption in real terms increased by less than 4% per annum; including 1965, this rate reduces to 2.7%, roughly the rate of population growth. It appears that private per capita consumption is only now approaching the level achieved in the sugar-boom years of 1963 and 1964. 9. Although the available statistics do not permit a definite conclusion on this point, it is evident that this relative stagnation of consumption in an expanding economy is due, at least in part, to a redis- tribution of income in favor of high income sectors with relatively lower propensities to consume. The effects of expansion in tourism and capital formation in the last few years have been felt mainly in the capital city of Suva and a few tourism enclaves. As inflationary pressure resulting from the high level of demand has further reduced the real purchasing power of the rural sector, it is likely that over the period rural income per capita has declined in real terms. 10. Furthermore, foreign enterprises operating in Fiji have received a large share of the recent increase in income. Savings of these enter- prises which account for a considerable proportion of the recent increase in savings are generally not identified as foreign capital inflows in the national accounts. The successful implementation of insurance and savings schemes such as the National Provident Fund has also generated a consider- able increase in household savings. Over the period as a whole, more than 30% of the increase in total income was apparently diverted to financing the very high rate of investment. 11. Investment - As a proportion of GNP, gross investment increased from 22% in 1966 to 26% in 1969 and is likely to exceed 28% in 1970. Private investment accounted for almost 70% of total investment outlay in 1966, and is expected to reach 74% of gross investment in 1970. Foreign capital played an important role in financing this high rate of expenditure. Private capital inflow, which increased from $3.5 million in 1966 to the more than $10 million estimated for 1970, accounted for almost one quarter of total private investment in the four years. 12. In the public sector, the level of investment in 1970 is esti- mated to be almost 40% higher, in real terms, than in 1966. Foreign capital, primarily in the form of Commonwealth Development and Welfare grants from the U.K. ($11.2 million) also constituted a significant proportion of the total expenditures of $50.9 million over the period. 13. However, these investment figures cannot be taken as an accurate measure of the increase in productive capacity. Residential construction accounted for a large part of the recent upsurge in investment activities. In 1967, for example, 1,582 dwellings, 4 hotels and 129 commercial buildings were completed. Similarly, 65% of government investment in the same year was in low-income housing, public building and land development. Con- sequently, it is likely that the increase in productive capacity over the last few years has been considerably lower than the very high rate of investment would suggest. Trade and Balance of Payments 14. There has been a significant change in the pattern of foreign exchange earnings over the last four years. Tourist receipts, which in- creased from $7.5 million in 1966 to an estimated $26 million in 1970, are largely responsible for the growth in export earnings. In 1970 tourist receipts are expected to represent 30% of total foreign exchange earnings as compared with 16% in 1966. 15. The level of merchandise exports fluctuated considerably over the period as the result of an unstable sugar market. A low sugar export in 1966 results in an average annual growth rate of 8.6% in value terms between 1966 and 1970, but the trend in real terms appears to be less than 3% per annum. Exports of fish from a Japanese on-shore operation, tobacco and meat prodicts, and light manufactures going to the neighboring Pacific Islands have partly compensated for the stagnation in the tradi- tional exports of sugar, coconut products and gold. - 5 - 16. Despite a considerable degree of import substitution of food- stuffs and light manufactures, commodity imports increased by 15.5% per annum after 1966, resulting in the enlargement of the trade deficit from 14.4% of merchandise exports to almost 50% estimated for 1970. As shown in Table 2, however, there has been no balance of payments problem. Table 2: BALANCE OF PAYMENTS (F$ million) Growth Rate 1966 1969 1970 1965-70(%) Merchandise exports, f.o.b. 34.7 47.2 48.3 8.6 Tourist receipts 8.6 20.9 26.7 33.0 Merchandise imports, f.o.b. 39.7 63.1 72.1 16.1 Net invisibles, n.e.s. -11.7 -16.3 -18.8 12.6 Balance on goods & services - 8.0 -11.3 -15.9 18.7 Net private capital inflow 3.5 6.6 10.4 Net public capital inflow 4.6 4.7 5.5 Source: Central Planning Office 17. The colonial system of 100% currency backing by foreign exchange establishes a direct link between export earnings and the major determinants of import demand such as money supply and domestic income, thus providing a self-adjusting mechanism in the balance of payments. The acceleration in imports in recent years was primarily the result of self-balancing in- creases in tourist expenditure on imported goods and investment activities financing by foreign capital, and the deficit in goods and services balance in recent years has generally been maintained at the level of foreign capital inflows. Prices 18. The rapid increase in demand generated by the high level of investment and tourism expenditure, particularly for the output of construc- tion and services sectors, has led to a substantial increase in inflationary pressure. Since 1965, wages have increased at an average rate of 6.3% per annum, and the rate of inflation accelerated from an annual average of 0.7% between 1965 and 1968 to 9% in 1969. Increase in consumer prices has been more than 4% per year. Population and Employment 19. The accelerated increase in per capita income after 1966 is attributable, in part, to a significant decline in population growth. An effective family planning program launched in 1963 has contributed to a decline of the crude birth rate from 38.0 per thousand in 1963 to 29.0 in -6- 1969. Crude death rates continued to fall with improving medical and health care facilities, but at a considerably lower rate. Thus the annual rate of population growth declined from an average of 3.3% in the five years prior to 1965 to an estimated 2.4% in 1969. 20. Complete data on employment are not available but tentative estimates indicate that unemployment increased from 4.2% of the labor force in 1966 to more than 6% in 1968. Unemployment is expected to present a continuing problem as the result of the high birth rate in the past and a significant degree of rural-urban drift. Collective bargaining has also created a number of anomalies in the labor market. Changes in wage differentials have generally not reflected changing differences in produc- tivity and skills. There is, therefore, little incentive under the present system for improving skills and productivity despite a wage scale consider- ably higher than those of most economies at a similar stage of development. Structural Change 21. The shift in the composition of demand after 1966 led to a significant change in the structure of domestic production. From 1966 to 1970, the share of agriculture, forestry and fishery declined from 31.7% of gross domestic product to an estimated 27.1% in 1970. Mining and manu- facturing also declined from 13.6% to 12.4%. Thus the contribution of commodity production to domestic product decreased by a total of 5.8% over the period while the share of transport and construction increased from 12.3% to 17.2% and other services increased from 42.4% to 43.3%. The industrial composition of GDP from 1966 to 1970 is summarized in Table 3. Recent developments in the major sectors are discussed in the following paragraphs. Table 3: GDP AT CURRENT PRICES, BY KIND OF ECONOMIC ACTIVITY Av. Growth Per Annum 1966 1969 1970 1966-70 F$ F$ FlF million (%) million (%) million (%) (%) Agriculture, forestry 39.5 (31.7) 46.2 (28.2) 48.2 (27.2) 5.1 and fishery of which, monetized sector 22.9 (18.3) 27.7 (11.3) 29.1 (16.4) 6.2 subsistence sector 16.6 (13.4) 18.5 (11.3) 19.1 (10.8) 3.6 Mining and manufacturing 17.0 (13.6) 21.4 (13.1) 21.9 (12.3) 6.6 Construction 7.4 ( 5.9) 13.6 ( 8.3) 15.5 ( 8.7) 20.0 Power and transport 9.6 ( 7.7) 14.9 ( 9.1) 17.1 ( 9.6) 15.6 Other services /1 51.3 (41.1) 67.5 (41.3) 74.9 (42.2) 9.9 GDP at current factor 124.8 (100.0) 163.6 (100.0) 177.6 (100.0) 9.2 cost /1 Includes retail trade and finance, real estate, private and government services. Source: Table 2.1 of the Statistical Appendix. -7- Agriculture 22. Agricultural production must be viewed in longer perspective be- cause of the wide fluctuations in output around growth trends. The absence of adequate historical data precludes an entirely satisfactory analysis of performance. Statistics are available for export crops, particularly sugar cane and coconut products, but are fragmentary in respect of crops for domestic subsistence consumption, domestic market sales and agricultural inputs. 23. An analysis of the principal cash crops, occupying 87% of the crop acreage, for the export and domestic markets, indicates the dominance of sugar cane in determining the overall performance of the cash sector of the agricul- tural economy. Between 1958 and 1969, the overall growth trend was 3.8% per annum, from F$17 million to F$26 million in terms of gross value to the producer. Sugar cane, accounting for over 60% of the total, had a growth rate of 4% per annum whilst the value of other crops, excluding forest products, increased at 2% per annum. Table 4 summarises output trends for main commodities over the period. 24. Export values of raw sugar rose to peaks of over F$100 per ton f.o.b. in 1963 and 1964, from average levels around F$80 per ton. This boom was accentuated by a particularly favorable season in 1963, and a 17% increase in acreage in 1964. The subsequent recession from 1965 to 1967 was in part due to a fall in raw sugar export realisations, and in part to a series of unfavourable seasons. The recent recovery is also due mainly to a combina- tion of improved realisation and favourable seasons, the underlying trend in increases in yield per acre being only a little over 1% per annum. Table 4: OUTPUT OF PRINCIPAL AGRICULTURAL PRODUCTS Growth Rate 1958-64 per annum Unit Average 1965 1969 '65-'69 Sugar cane 1,000 tons 1,825 2,171 2,339 1.9 Copra 1,000 tons 35 30 33 2.4 Bananas 1,000 cases (72 lbs) 156 51 90 15.2 Rice padi Tons 8,771 6,000 12,600 20.0 Beef Tons, dressed weight 2,092 2,089 3,517 13.9 Butterfat 1,000 lbs 647 742 900 5.0 Timber 1,000 cu. ft. round 3,039 4,000 4,400 2.4 Source: Table 7.1 of the Statistical Appendix. 25. The overall performance of other agricultural crops was disappoint- ing, with growth at only 2 per cent per annum between 1958 and 1965 followed by poor returns in 1966 and 1967. This was principally due to declining production of copra, but lower rice production and banana exports also con- tributed. In 1968 there was a dramatic improvement, and this has been partly sustained through 1969. - 8 - 26. Exploitation of indigenous forest resources increased at around 10 per cent per annum in value terms between 1958 and 1965. This rate has declined to between 4 per cent and 5 per cent over the last few years, main- ly because access has become increasingly difficult and beyond the capacity of many of the smaller saw mills. Demand and prices have been sustained. 27. For the domestic agricultural sector, including subsistence production and sales on the domestic market, an analysis of food import statistics gives some indication of growth trends (see Table 5). They suggest that local production of foodstuffs, though falling behind the growth of population between 1958 and 1965, has in recent years recovered and contributed an element of import substitution, particularly in respect of rice, beef and dairy products. The steady growth of fish imports over the whole period suggests, however, stagnation or decline in the production of fish for domestic consumption. A large Japanese tuna fishing enterprise was established in Fiji in 1957; exports of frozen fish to Japan and the United States are substantial, but the effect on local fish supplies has been small. Table 5: IMPORTED FOODSTUFFS:VALUE AND VOLUME F$ million Growth Trend 1958 1965 1969 1958/69 1965/69 (% per annum) Wheat Flour 0.6 1.2 1.2 5.4 1.6 Wheat Sharps 1.0 1.7 2.0 5.9 5.5 Rice 0.6 1.6 1.5 9.5 -3.5 Beef and Dairy Products 0.6 1.1 0.9 4.4 -3.4 Canned Fish 0.5 0.7 1.0 7.8 11.9 Other Food Imports 3.1 3.8 5.9 6.8 7.4 Total 6.4 10.1 12.5 6.7 4.4 Volume 1958 1965 1968 1958/68 1965/68 Wheat Flour 8,300 16,200 14,200 2.0 -4.0 tons Wheat Sharps 12,900 22,300 21,600 4.1 -0.1 tons Rice 4,200 13,400 8,100* 7.6 -17.5 /1 tons Beef (Frozen and 251 217 126 2.3 -17.4 Chilled) '000 lbs Milk 1,525 3,039 2,805 5.2 -2.3 '000 lbs Butter 117 412 390 10.8 -2.8 '000 lbs Canned Fish 3,081 5,298 7.430 10.6 13.4 '000 lbs /1 1969 and trend 1965/69 Source: Bureau of Statistics. - 9- Manufacturing and Mining 28. Manufacturing industry is dominated by the processing of sugar which in 1969 employed nearly half of the industrial workforce of 8,900 and accounted for about 70% of valued added by the sector. Sugar and copra processing together accounted for over 95% of exports of manufactures; of total industrial production valued at F$57 million in that year, F$19.5 million or about one-third was sold in the domestic market. Much of this relied largely on imported inputs, but there is a small range of sizeable industries using mainly domestic raw materials. Their most important pro- ducts are cigarettes, cement, soap and processed dairy products. Each of these industries receives tariff protection but all have a growing export market and appear to be efficient. 29. The pace of industrial development has been modest, an estimated 4.8% per annum from 1966 to 1970. If sugar processing is excluded, however the rate of expansion during the same period is over 9%. Investment incen- tives for new industries appear adequate and have resulted in the establish- ment of 42 new plants, mostly small, from 1966 to 1969. The development of repair and maintenance services has also contributed to the growth of the sector. There are strong indications that this growth will be maintained and that the sector will increase its exports, particularly to the smaller neighboring countries and territories unable to support economic industries or engineering services. 30. Production of gold has been the largest single item in Fiji's mineral production and has provided substantial foreign exchange earnings. Due to gradual exhaustion in deposits, output has steadily declined from the peak level of 113,000 ounces in 1966 to 99,000 ounces, with exports of F$3.4 million, in 1969. Small-scale mining operations are carried out to produce manganese. Production of copper ore by a Japanese mining interest, which invested F$2.4 million, is being abandoned because of limited deposits but bauxite production by a consortium of Japanese mining concerns is envi- saged. The scale of the operation is not yet known but is unlikely to be large. Prospecting for mineral ores and oil deposits on land and off-shore is continuing. Tourism 31. Tourist traffic has expanded rapidly in the past decade. As shown in Table 8.3 of the statistical appendix, the number of stopover visi- tors grew from 14,000 in 1961 to 85,000 in 1969, an average annual increase of 22%. Over the same period the number of excursionists from liners and cruise ships increased from 29,000 to over 85,000. With a traffic that is not highly seasonal, average visits of 8-9 days and average expenditures of F$34 per day, tourism has become a major factor in economic growth. 32. The most striking measure of the returns Fiji has obtained from tourism in recent years is the growth of earnings of foreign exchange. Es- timated receipts are shown in Table 6. - 10 - Table 6: ESTIMATED RECEIPTS FROM FOREIGN TOURISM 1963 - 69 Year F$ million 1963 3.6 1964 5.0 1965 7.4 1966 8.5 1967 11.2 1968 17.7 1969 20.6 Source: Summary of Visitor Statistics. Bureau of Statistics, Suva. The average annual rate of growth in receipts over this period was 35%. The contribution to GDP is much smaller. It was estimated at 2% in 1965 and probably about 5% in 1969. This is not low when compared with leading tourist countries, but such a calculation does not accurately reflect the real impact of the growth of tourism on the economy. In recent years the expansion of tourism and the investments associated with it have provided a major stimulus to growth in other sectors, particularly transport, construc- tion and trade. Development Plan V 33. Although Fiji has had five development plans since the end of World War II, the earlier plans were limited to the government capital development budget required by the Commonwealth Development and Welfare scheme. Development Plan V which covers the period from 1966 to 1970 re- presents the first attempt to include a macro-economic projection of the whole economy, and to present the government investment program in the framework of overall development. The Plan also included a thirty-year perspective plan projecting the potential development of forestry, tourism, water and marine resources. 34. However, the capital development budget of the Government remains the major program of DP V. Only a small degree of indicative planning was attempted with respect to the private sector, with emphasis on the limit- ation of growth in the traditional sectors and the need to encourage new industries. In line with this objective, the Plan included provisions for pre-investment studies in transport, land resources, forestry, drainage and irrigation, marine and fisheries, and in agriculture, priority was given to research on new products and land settlement schemes. 35. In macro-economic terms, the actual development since 1965 was close to DP V's target although the sources were other than planned. GDP in real terms appeared to have increased at an annual rate of 5.1% over the five years as compared with the target rate of 5.6%. As population growth - 11 - was significantly lower than projected, it appears that the growth in per capita income is almost exactly as planned. The growth of consumption, however, was considerably lower than projected because of an unexpected rapid increase in investment. 36. A comparison of the sectoral growth projected in DP V with actual development is given in Table 7. The largest shortfalls are obviously in agriculture and mining, where net output in real terms appears to have grown at a rate slower than population growth. The relatively higher rates of expansion in transport, construction and services are evidently the result of the increasing share of investment and tourist expenditure in total demand. Table 7: SECTORAL DEVELOPMENT OF DP V AVERAGE ANNUAL GROWTH RATE OF NET OUTPUT IN REAL TERMS 1965 - 1970 (%) Plan Actual Agriculture 5.4 2.2 Mining 8.5 -1.9 Manufacturing 5.9 4.8 Construction 4.8 13.0 Transport & Communication 6.1 11.6 Electricity and Water 10.7 5.9 Trade and Finance 5.7 2.8 Public Administration, Education and Health 6.8 5.5 Services, n.e.s. 6.1 7.8 Source: Central Planning Office 37. The F$40 million public investment program of DP V was ambitious as compared with the level of expenditure achieved in the years before 1965. It now appears that actual expenditure, including a projected F$2 million shortfall of expenditures in the 1970 capital budget, will be of the order of F$34 million when deflated to 1965 prices. A comparison of the planned and actual allocation of investment is given in Table 8. The major reasons for these shortfalls in the face of more than adequate financing are appar- ently problems of implementation, in particular, difficulties in project design, appraisal and implementation. 38. Although DP V appears to have had relatively little influence on the pattern of development over the last five years, it has been instrumental in focusing national attention on the problems of the traditional economy and on the need for planned development. It has also enlarged considerably the administrative and statistical bases on which Development Plan VI is to be constructed. The experience and achievement of Development Plan V should enable the Government to embark on more comprehensive planning after inde- pendence. - 12 - Table 8: CENTRAL GOVERNMENT INVESTMENT PROGRAM OF DP V 1966 - 1970 (F$ million, in 1965 prices) Actual as Percent- Plan Actual age of Plan Agriculture 5.61 5.18 Geology, Land & Mines 0.44 0.73 Industrial & Cooperative Promotion 0.06 0.16 Tourism 0.10 0.16 Total Economic Service 6.21 6.23 100 Road & Public Works 8.49 7.50 Post & Telecommunication 4.78 3.70 Marine 1.19 0.66 Transport 0.90 0.58 Total Infrastructure 15.36 12.44 81 Education 4.06 2.82 Medical 4.95 2.78 Housing 1.00 1.38 Other 8.70 7.88 Total Social Services 18.71 14.86 79 Grand Total 40.28 33.53 83 Source: Central Planning Office and mission estimates. 39. The end of the fifth Plan period marks the end of a colonial era and a break in administrative tradition. Fiji has had a longer than usual period of preparation for this change, and the gradual transfer of political power has been accompanied by a program of localisation at all levels of the government administration which should help to ensure the continuity of economic and social prograns. The projections of future development presented later in this report reflect the view that the economy will continue to be competently managed and administered after the grant of independence later this year. - 13 - II. THE TRANSITION TO INDEPENDENCE 39. Independence will not in itself ach alter the economic and social framework within which Fiji must develop. The evolution towards full self-government, in particular the introduction of cabinet gov- ernment with an increasing number of elected Ministers, has already re- leased energies which were less obvious in the purely colonial system which preceded it and is probably responsible in part for the good econo- mic performance of recent years. Fiji will remain sensitive to external market forces and investment decisions largely beyond its control. The range of economic policy alternatives will be limited by the economy's small size and relative isolation, and by the quota restrictions on its main export, sugar. It will be necessary, if satisfactory rates of in- crease in output are to be obtained, to maintain an environment in which overseas productive and technical resources are retained, and wherever possible increased, through new inflows of capital and skills. Money and Banking 40. The colonial Currency Board system still operates in Fiji and there is no central bank. Full currency backing is provided by a Currency Fund with its external assets held with or invested through the Crown Agents in London. About 30% of these assets are now invested in Fiji. 41. Consideration has been given to the form and powers of the central monetary institution Fiji will require after independence. Gov- ernment thinking currently favors a transitional arrangement which would give a reconstituted Currency Board greater autonomy and the functional responsibilities of a monetary authority without, initially, creating and staffing a new institution. The chairman would act as banking adviser to the Government and, over a period, establish the basis for a fully- fledged central bank. 42. Interest rates are now at well below prevailing world levels - recently 5-7/8% for medium-term government bonds, 6% for corporate over- drafts and 2-1/2% for 6 months' deposits - but until recently they have been in keeping with Australian and New Zealand rates. This has been partly because of the comparatively high costs of transferring funds. The rates favor domestic commercial activity and investment and have been consistent with savings requirements, but are likely to rise, at least gradually, because of pressures on and within commercial banks and recent increases in government bond rates in Australia, with which Fiji has close economic ties. 43. All commercial banking is undertaken by five expatriate banks. The other main financial institutions and intermediaries are the Post Office Savings Bank, with 61 branches throughout Fiji and deposits of F$4.7 million at the end of 1969; the National Provident Fund, through which superannuation contributions are channelled into public and private investment; life assurance companies, which thrive in Fiji and aim to invest up to 50% of funds locally; and the Fiji Development Bank. - 14 - 44. This bank was established in 1967 to take over and expand the operations of the Agricultural and Industrial Loans Board, acquiring its net funds of slightly over F$l million and receiving an initial grant of the same amount to begin operations. The functions of the Board as a lender for agricultural, crafts and small-scale industrial development were also taken over, but the Bank was also empowered to lend for trans- portation, natural resource development and other industries. 45. Because of its origins and present obligations the Bank has had to make many small and often unproductive loans. In the first two years of operations, to June 30, 1969, over 600 loans were made: No. Amount (F$) Loans: Agriculture 571 396,632 Industry 35 723,478 606 1,120,110 46. The average size of agricultural loans, including loans to co-operative societies, is under F$700. Nearly half of all loans have been of F$200 or less, and the costs of providing credit often far exceed possible returns. The Bank's operating deficit of F$30,000 in 1967/68 was met by government grant, but was followed by a deficit of F$21,000, on reduced operations, in 1968/69. The position in industrial lending is more satisfactory but the volume is small, amounting in 1968/69 to 15 loans with an average value of under F$15,000 and only two exceeding F$30,000. 47. The needs for medium-term finance will expand rapidly over the coming years and must be met mainly by the Development Bank. Technical assistance is required to develop this institution into a more suitable vehicle for domestic and external financing. If it is to play a social as well as an economic role in agricultural finance the activities should be clearly defined in separate accounts and the small-scale lending subsi- dized by the Government while the larger operations are carried out effi- ciently and at a profit. It is understood that the Asian Development Bank has undertaken to provide managerial assistance. The Fiscal System 48. Total government revenue from all sources rose from F$25.0 mil- lion in 1966 to F$37.6 million in 1969 at an annual rate of 10.7% during the period, as compared with 9.8% increase in GDP, and consequently the share of revenue in GDP rose from 18.5% to 21% during the period. This was brought about mainly by the increased collection of customs duties and income taxes following the overall economic expansion. The increase of 15.5% per annum in imports generated a 16.3% increase in customs duties. - 15 - The ratio of direct and indirect taxes in total revenue remained almost unchanged, but tax revenue as a proportion of GDP increased from 13.8% in 1966 to 15.5% in 1969. 49. This satisfactory revenue performance was obtained without significant changes in the tax system during the period. The Government was able to finance an increasing range of economic services, maintain relatively high levels of recurrent expenditures in social fields and generate revenue surpluses for transfer to the capital budget at an annual average of F$1.8 million. It appears therefore that major changes in the fiscal system will not be warranted, at least in the initial stages of independence. Table 9: REVENUES AND EXPENDITURES, 1966-69 (in millions of Fiji dollars) 1966 1967 1968 1969 1970/1 Total Revenue 25.0 28.4 32.3 37.6 36.8 Indirect taxes 10.5 12.8 14.4 16.6 17.4 Direct taxes 8.2 8.9 9.8 11.3 11.6 Other 6.3 6.7 8.1 9.7 7.8 Total Expenditure 25.2 29.1 30.7 34.4 35.7 Administration 4.5 5.5 5.4 6.4 9.0 Economic services 6.6 7.5 10.3 11.6 12.3 Social services 6.5 7.2 8.1 9.1 9.9 Transfer to capital budget 1.4 2.0 1.6 2.0 1.2 Capital budget 6.1 6.0 7.3 8.5 11.4 /1 Estimate Source: Appendix Tables 5.1 and 5.2. 50. Recurrent expenditures maintained an average annual rate of growth of 10.3%, rising from F$25.2 million in 1966 to F$33.8 million in 1969, and 1970 budget estimates appear to follow the same trend. However, the relative share of economic services has risen from 25% in 1966 to 36% in 1969, reflect- ing the stepped-up efforts to promote economic development. Social services, the largest claimant up to 1965, maintained their relative weight of about 26% of total current expenditure. Cumulative budget surpluses amounting to F$7.0 million during the period 1966-1969 were transferred to the capital bud- get, providing about 25% of the total capital budget expenditure. - 16 - 51. Direct taxes provided only 30% of total revenues. The income tax arrangements are unduly complex and need simplification. Personal incomes may be charged basic tax on all income and normal tax, surtax and a surcharge on taxable income. Companies also pay the basic tax of 2.5%, income tax and a surcharge. The effective rate is 32.7%. 52. Tariffs are imposed primarily for revenue purposes but protec- tion is given to a few local products including cement, cigarettes and soaps. Manufacturing plant and machinery and industrial materials are in the main admitted free of duty. Imports of duty-free goods of interest to tourists amounted to F$5.2 million in 1969, about 7% of total imports. Customs duties are levied at c.i.f. values (mainly ad valorem) and preferen- tial rates of 15-25% are applied to imports of Commonwealth origin. There is a separate Port and Customs Service Tax payable on most imports, generally at the rate of 5% of c.i.f. value, and on exports at 2% of f.o.b. value. 53. There is some scope for increases in effective levels of income tax and for the reduction of anomalies created by the existence of four separate taxes on income. A review of the revenue system has been made recently and some changes in detail are likely to follow from this. The mission considers however that major alterations in the tax structure should be avoided at this time and until the newly independent Government has had adequate experience in' the operation of a system which is meeting present and foreseeable needs. The Capital Budget 54. The main sources of funds for public sector capital formation have been grants under the Commonwealth Development and Welfare scheme and loans raised in Fiji and overseas. Their relative importance in the capital budget is indicated in the Table 10. Table 10: SOURCES AND LEVELS OF CAPITAL EXPENDITURES (in millions of Fijian dollars) Transfer from C.D.& W. Total Total Current Revenue Grants Loans Other Resources Expenditure 1966 1.4 2.2 2.3 0.2 6.1 7.7 1967 2.0 1.4 2.4 0.2 6.0 5.6 1968 1.6 1.7 3.9 0.1 7.3 7.5 1969 2.4 2.2 4.2 0.5 9.3 8.5 1970 (estimate) 1.2 2.9 5.6 0.1 9.8 11.4 Source: Capital Budget, 1970. - 17 - 55. Expenditures have grown slowly and shortfalls of up to 15% between planned and actual expenditures have been common. The main problem has been the shortage of technically qualified personnel, usually a result of diffi- culties over recruitment or replacement rather than of inadequacies in staff planning. The shortfalls have been particularly noticeable in the utiliza- tion of Commonwealth Development and Welfare funds. The annual allocations of F$3 million in 1968 and 1969 resulted in actual expenditures of F$1.7 mil- lion and F$2.2 million respectively, partly because of delays in negotiating projects to be financed by the grants. 56. Domestic and external borrowing has increased with the growth in capital budgets from 38% of resources in 1966 to 45% in 1969. The main sources for domestic borrowing, amounting to 76% of the total in 1966 to 1969, are the commercial banks, life assurance companies and the Fiji National Provident Fund. The growth of these financial institutions appears to have kept pace with public sector requirements for domestic development funds and supplementary taxation measures have not been required. External Aid 57. The main source of external aid has been the United Kingdom, with grant assistance from 1966 to 1969 totalling F$7.5 million in dis- bursements. Greater reliance on loan funds will be inevitable when the colonial era ends although substantial grants, mainly for projects already defined, will be made for the first two to three years after 1970. The major project commitments in a total of F$12.8 million from 1966 to 1970 have been for new hospitals, main and feeder roads and a coconut replant- ing scheme. 58. Technical Assistance under the Australian South Pacific Aid Programme has amounted to approximately F$150,000 per annum in recent years, for both experts and equipment. Australia has also given program aid under the International Grains Agreement. The value of the two gifts of wheat in 1969 was F$1,350,000. Several of the main pre-investment needs have been met by the UNDP. These are described in Annex B. 59. With the exceptions discussed below in agriculture, technical education and tourism, pre-investment studies for the investments required over the next five or more years appear to be well in hand. Private Investment Policies 60. The incentives for investment are attractive. Approved new in- dustries qualify for a tax holiday of five years after production begins. They may also receive concessions under the customs tariff ordinance which provides for remission of all or part of the duty payable on any goods im- ported for an object or enterprise beneficial to the colony. New industries which do not qualify and existing industries undertaking new investment may qualify for accelerated depreciation allowances up to 20% of approved capital expenditure excluding land acquisition. Similar provisions exist for the mining industry. - 18 - 61. A Hotels Aid Ordinance provides two forms of incentive for hotel construction or expansion: a cash grant of 7% of construction costs com- bined with special depreciation allowances, and an investment allowance of 55% of construction costs which may be set off against taxable income at the investors' discretion. Cash grants have amounted to about F$210,000. Together the incentive provisions appear to have given considerable stimu- lus to hotel investment. 62. There appears to be no case for extending further.investment privileges and good reason not to vary them at the present time if the favorable climate for foreign investment is to be maintained in the post- colonial period. All of the concessions are discretionary and approvals need be given only when the investment will contribute to economic and social development objectives. Manpower Requirements 63. The limitations on future development are related to manpower rather than finance. The shortage of middle-level skills which has become apparent in Fiji during r6cent years of comparatively rapid growth, and has been exacerbated by the emigration of substantial numbers of technically skilled people to higher-income countries in the Pacific region, is a matter for concern. In part the problem arises from a wage system which has allowed rising basic wage rates to be accompanied by diminishing margins for skills. It is also a result of thi emphasis in the education system on general rather than specialized education. Education and Training 64. Fiji has a well-developed education system. The majority of schools are run by comffiiffities and religious missions, generally with financial and material support by the Government. About 85% of children aged 6-13 are enrolled at primary schools and few never attend schools. Enrollment drops sharply at secondary and technical levels. Table 11: SCHOOL ENROLLMENT Primary Schools Secondary Schools Professional and Vocational 1960 76,182 5,439 1,159 1965 93V983 7,566 1,411 1968 100,912- 11,995 1,5244= /1 1967 Source: Annual Statistical Abstract, Fiji, 1969. - 19 - 65. The system largely separates Fijian and Indian pupils and although the desirability of integration in the multi-racial society is accepted in principle, practical difficulties appear to have prevented much progress. An Education Commission in 1969 recommends policies which would allow for all schools in areas of mixed population to become multiracial in due course and these policies appear likely to be accepted. 66. The orientation of education policy is indicated by the following summary of longer-term objectives: (1) provision for every child to have at least 10 years of education, with a further two years for those qualified; (2) improvements in teacher education; (3) the staffing of all primary schools wholly by trained teachers and better pupil-teacher ratios in all primary and secondary schools; (4) improvements in the quality of primary and technical education; (5) the institution of fee-free education to secondary levels; (6) a marked improvement in the education of Fijians, in order to redress the present imbalance between their educational attainment and that of other races in Fiji; and (7) the creation of a new examination structure. The main aims in technical and vocational education are to decentralize apprentice training and equivalent-level commercial training and to further develop the single large technical institute for middle-level manpower education and training. 67. Although provision is made for craft-teaching facilities at all secondary schools, the education program appears to give inadequate weight to technical education and training needs. Proposals for separate secondary technical schools appear to have been rejected. Specialist facilities for apprentice training, agricultural courses and trade testing in "centres of technical education" which could eventually develop into technical insti- tutes are still under discussion. 68. There is already a serious shortage of technical skills in Fiji as a result of economic expansion in recent years, and an effective program to increase the supply of trained manpower is essential if development ob- jectives are to be achieved. A survey of manpower requirements is needed, as an urgent measure, to provide the basis of a technical education program related to medium-term development targets and to assist in identifying projects in this field. - 20 - 69. The regional University of the South Pacific, which has already established links with advanced training institutions in Fiji and other Pacific countries and is itself contributing to the supply of trained manpower, could play a useful role in technical education policy and pro- grams. Because Fiji is already a centre for regional training, its needs should not be considered in isolation from those of smaller neighboring countries and territories with similar manpower problems. 70. Within Fiji, some of the institutional steps to improve the manpower situation have already been taken. A Manpower Resource Council was set up to assess the labor situation and advise the Government on measures for the evaluation, training and placement of the growing number of new entrants into the labor market. An Apprenticeship Council supervises on-the-job industrial training programs. The Ministry of Labor has a trade- skill testing scheme to classify laborers and job applicants into various categories. The Derrick Technical Institute has established crash training programs to help meet the growing manpower shortages. The Department of Agriculture also engages in in-service training on a limited scale, in addition to its regular extension work. These efforts, however, have yet to be concerted into an adequate program. 71. Given the other calls on budgetary funds for education, external assistance is likely to be required for technical education and training programs. The necessary studies leading to investment in this field should be undertaken without delay. Employment 72. In 1968 the economically active population of Fiji was estimated at about 140,000, comprising: Wage & salary earners 51,600 Private sector (33,500) Public sector (18,100) Family & own account workers 80,400 Unemployed 8,600 Total 140,600 The estimate of unemployment within this total represents a rate of 6.1% compared with 4.2% in 1966. The increase was primarily the result of more rapid increases in working age population than had been experienced in former years - 4.8% average in 1966-71 instead of the 3% average in the previous five years. The agriculture sector has until recently been able to absorb at low levels of productivity most of the workers unable to find wage employment. With improving levels of education and higher expectations, this is less likely to be acceptable in future. - 21 - 73. Employment has been a concern of the Government and some temporary income opportunities for workers have been found outside Fiji, in New Zealand and New Caledonia for example, under carefully supervised emigrant labor pro- jects. The problem facing policymakers in the next five-year period is to create enough job opportunities for the average of 7,000 entrants to the labor force each year and, if possible, to reduce at the same time a level of unem- ployment large enough to have social consequences. 74. Wages and labor conditions are good enough to discourage labor- intensive techniques where there are alternative methods of production. On the other hand the scale of industrial enterprise is small, so that in this and other sectors increased output is likely to result in a generally propor- tionate increase in employment. The aim therefore is to promote economic development at rates rapid enough to meet the employment targets. The empha- sis on the service sectors, and the planned acceleration of public sector investment activity, will contribute to this objective. Family Planning 75. Advice and materials on family planning have long been in use in Fiji on a limited scale and a clinic was operating when the Government first declared its family planning policy in November 1962, including it as one of the medical services functions. In 1963 the Family Planning Association (FPA), a private non-profit organization, was founded to carry out the promotional activities of the program. The FPA is a full member of the International Planned Parenthood Federation (IPPF) and receives grants-in-aid from both the Government and the Federation. 76. The stated objective of the campaign is to reduce the natural rate of growth of the population from an average of 3.3% per annum in the 1960's to 1.5-2% per annum beginning in 1980. This target would be achieved by gradually decelerating crude birth rates to 30 per thousand by the end of 1970, 25/1000 by 1975 and finally to 20/1000 by 1980. The first phase target was reached at the end of 1968 when the birth rate stood at 30.23/1000 and dropped further to 28.97/1000 the following year. It is projected at 28.5/1000 by the end of 1970. The gradual deceleration of the birth rate and consequently of the natural increase in total population since the campaign was launched can be seen in Appendix Table 1.1. Family planning appears to be widely accepted among the Indian population. A trend towards later marriage among the Indian community must also have had some impact on birth- rates. Over the last three years Fijian birthrates also appear to have sharply declined, from 36.93 in 1966 to 26.99 in 1969, although a change in the system of registering births may have caused some under-reporting and account for part of this reduction. 77. The results can be attributed mainly to the efficiency of the joint implementing agencies and the easy availability of contraceptive devices, which are distributed free or at prices so low as to reflect only distribution costs. - 22 - 78. The Medical Department includes family planning as an integral part of maternal and child care, and has adequately trained staff. Its field medical teams disseminate family planning advice and materials in villages throughout Fiji. The FPA uses mass communication media including vernacular dailies, posters, films and leaflets in the major dialects. This year's publicity campaign is aimed at villages in other outlying islands through increased use of broadcasting services. 79. The total cost of the program in 1969, excluding supplies subsi- dized from non-government sources, was around $76,000. The average cost per acceptor was only $3.00 in 1968 and about $3.15 in 1969. The FPA's promotional work is also partly funded by the Government and partly by grants-in-aid from the IPPF. 80. More overt support of the program by Government and Fijian leaders may be necessary if the momentum gathered during the last five years is to be maintained. The budgetary contribution to family planning is considered adequate and should be continued at about present levels. Land Tenure 81. Details of the land tenure system and of land use were given in the earlier Bank report on Fiji. About 84 per cent of the total land area of 4.5 million acres is held under customary tenure and is communally owned by Fijians. Ten per cent is freehold land, more than half of it owned by Europeans and less than one-fifth by Indians. The rest is Crown land. The social and political importance attached to traditional Fijian land rights is such that no significant change in the pattern of ownership is likely to occur. 82. The limited area suitable for cultivation, pasture and tree crops, approximately 1.4 million acres, is however more productively used than the above figures suggest. About 350,000 acres, including most of the land on which sugar cane is grown, have been leased to Indian farmers by Fijians, the Crown and the Colonial Sugar Refinery, bringing their share in land use to some 10 per cent of the total area. Most of the remaining good land is quite efficiently used by other groups. There remains substan- tial scope for further leasing or other arrangements to provide the security of individual tenure necessary to ensure sound use of all productive lands, including areas suited to forestry operations, in the interests of land owners as well as the economy as a whole. For non-agricultural purposes as well, difficulties or delays in securing the use of suitable land could discourage the levels and types of private investment, domestic and foreign, required for economic development. 83. The new constitution which comes into force with independence includes provisions relating to the compulsory acquisition of land which could delay, and in the case of land settlement prevent, the implementation of some important development projects. Acquisition for the purpose of land settlement would cease to be permissible. In the case of acquisition for - 23 - other purposes the constitution would permit the Government or other acquiring authority, failing a negotiated agreement with the owner, to take possession of land but require it to apply to the Supreme Court within 30 days and justify the acquisition in that court. The Government would pay the costs of the owner in connection with the initial proceedings, regardless of the outcome, but not necessarily the costs of appeal to a higher court. A decision in favor of the owner could also involve the payment of damages arising from the taking of possession. 84. The effects of the new procedures will have to be tested, but could involve the postponement and possibly abandonment of some public sector investments scheduled for the Sixth Plan Period (1971-75). In an economy in which infrastructure investment has lagged over a number of years, but could now be accelerated with the resources likely to become available, this could be a serious problem. The situation should be kept under close review by the Government with a view to remedial action if necessary. Priorities for the Agriculture Sector 85. The continuing efficiency of the sugar industry is undoubtedly the most important priority for the overall economy of Fiji. Exports of raw sugar at F$28.7 million, in 1969, contributed 60% of the total merchan- dise exports of F$47 million. The envisaged transfer of the management of the industry from the Colonial Sugar Refinery's subsidiary, South Pacific Sugar Mills (see paras 103 to 112) must therefore be accomplished without loss of efficiency in the management of the mills, extension and research services and export marketing operations. In part this implies the reten- tion of many of the present high-calibre senior personnel, whom it would be impossible to replace from local sources without training over a period of years. 86. Efforts must continue to resuscitate the copra industry, which has been stagnating over the past decade. The replanting and planting schemes established in 1963 will result in increased production over the period between 1970 and 1975. (See paras 97 to 99). A replanting program must continue during the 1970's in order, at least, to sustain production growth beyond 1975. Efforts must also continue to improve growers' net realizations. Irrigated rice schemes of at least 4,000-6,000 acres should be implemented between 1970 and 1975, on the likely assumption that these schemes are technically and economically feasible. In the absence of such schemes, imports of rice at 8,000 tons in 1969 could increase at between 2 and 3% per annum. 87. Development of local fisheries received little attention until the last few years, since when funds and staff have been increased to a modest extent. With imports of canned fish apparently increasing at 13% per annum, to 8 million pounds valued at over F$l million in 1969, there is a need to make more strenuous efforts both as regards pre-investment surveys, and implementation of existing projects. - 24 - 88. Development of the beef and dairy industries should proceed as rapidly as possible subject to the need to train new farmers in livestock and pasture management. Further research may be necessary to determine in detail the optimum grassland species for the various climatic zones, their nutrient requirements, and establishment and management techniques, but the main lines of development should be already known. 89. There are a number of other possibilities for agricultural develop- ment among crops already established in Fiji. Growth is likely to be mainly for the domestic market with some prospects for export, mainly within the South Pacific region. Exports to other parts of the world would compete with production from other tropical countries and encounter similar marketing prob- lems which, in the case of Fiji, would be increased by isolation and small output. The relatively high standards of living and of wages in agriculture are also a competitive disadvantage. Apart from bananas which are-exported in quantity to New Zealand, the most promising small-scale development possi- bilities appear to be sorghum, peanuts and tobacco with prospects also for coffee, cocoa and oil palm. 90. The government policies for future agricultural development have been outlined and discussed in general terms without specific reference to development priorities. The following possible projects have been identi- fied: (a) general agricultural credit for specified crops including copra and bananas (b) dairy farm development (c) coconut research station (d) farmers' training institutes (e) fishermen training school (f) oil palm research center (g) tea research center (h) dry zone research center (i) forestry development. 91. Most of these would be small and relatively inexpensive, ranging from perhaps F$150,000 for the research centers to F$1-$1.5 million for dairy farm development. Rural credit requirements would probably be met by the Fiji Development Bank which would require an external loan for this purpose. - 25 - 92. The machinery in the Ministry of Natural Resources for establish- ing priorities in agriculture, forestry and fisheries, and for planning pro- jects, appears weak. It seem necessary to consider external technical assis- tance in the establishment and operation of an agricultural planning unit within the Ministry. 93. The Government recognizes the need for adequate price incentives for agriculture development and is considering the feasibility of price support and minimum or guaranteed prices for some products. For minor commo- dities the administrative difficulties would be considerable but a copra stabilization fund could be considered. Such a stabilization fund exists for sugar and a guaranteed minimum price for cane was established for the industry, with unforeseen consequences, by the Denning Award (see para 101). The proposed agricultural planning unit could also investigate present poli- cies in agriculture and the present program of subsidies for agricultural inputs. 94. Trends in the economy as a whole will continue to depend largely on performance in relation to the two main agricultural exports, sugar and copra. The following sections discuss the main developments in sugar and copra produc- tion. Copra 95. The overall trend in copra production over the past two decades has been one of decline. Peaks of production, of little over 40,000 tons, were achieved in 1956, 1963 and 1964. Table 12: COPRA PRODUCTION 1952/1969 '000 tons 1952/54 1962/69 1967/68 Trend Average Average Average 1952/69 36.9 35.3 28.4 -1.6% p.a. 96. As shown in Table 13 there has been a marked improvement in copra quality since 1965. Grading standards were instituted and smoke drying was banned in 1966. Table 13: COPRA GRADES (as percentage of total deliveries) /1 1965-- 1966 1967 1968 1969 March Dec. Grade 1 1 26 69 68 81 86 Grade 2 43 37 27 29 17/2 13/2 Grade 3 39 34 4 3 2- Reject 17 3 - - - /1 Sample. /2 Commercial acceptable standard (C.A.S.) replaced Grade 3. - 26 - 97. Probably the principal reason for the trend in production has been increasing costs, including inter-island freight charges, resulting in lower net realization. For Fijian smallholders with average yields of around 3 cwt. of copra per acre, the gross income would be between F$15 and F$20 per acre. There are 9,000 holdings with an overall average of 20 acres under coconuts, 70% of 25 acres or less. There are possibili- ties for inter-cropping palms with subsistence or cash crops and for graz- ing livestock. Generally, however, returns for smallholder copra produc- tion are low enough to discourage either weed control, replanting or clear- ing and planting new land. 98. In an attempt to resuscitate the industry, the Government intro- duced a coconut subsidy scheme with the assistance of a grant from the United Kingdom. Subsidy payments were made in three categories: A: cleaning and thinning palms in Fijian communally-run groves, and subsequent maintenance; B: replanting, and subsequent maintenance of over-age palms; and C: clearing new land, planting, and subsequent maintenance. 99. Subsidy payments in the first category ceased after July 1966, but payments for the other two categories have continued. At the end of 1969, payments totalled $2.4 million and expenditures in 1970 were estimated at F$200,000. Over the period 1963/69, 113,100 acres had been planted in Category C. 100. It is not apparent that subsidy payments for clearing and mainte- nance activities have resulted in any marked increase in production. How- ever, the continuation of a subsidy/credit scheme for replanting is desira- ble. Replantings and new plantings, totalling 70,000 acres, should result in increased production, possibly 23,000 tons of copra (at an estimated average yield of 6.5 cwt/acre) by 1975. 101. Milling is concentrated at Suva, the capital and main port, which is distant from the major producing areas. Crushing capacity, dominated by one mill with a capacity of over 40,000 tons, exceeds present needs. The question of new mills located in producing areas has been under considera- tion for some time. Until annual production approaches 50,000 tons, or the present large mill ceases operation, there appears to be no economic justi- fication for new investment in crushing capacity. Profits from milling operations appear to be moderate and there is little scope for increasing the returns to growers by imposing lower margins for processing. 102. There are, however, needs for investment in wharf facilities, feeder roads and inter-island shipping which would reduce transport costs and increase returns to copra production. - 27 - The Sugar Industry 103. The major current economic issue involves the sugar industry. There are more than 15,000 cane growers in Fiji, but since 1926 the Australian Colonial Sugar Refining Co. (CSR) has been the only miller. Frictions between CSR and the Fijian cane growers in 1960 and 1961 caused serious disruption in the industry and led to the appointment of a sugar inquiry commission chaired by Sir Malcolm Eve. The commission recommended what became known as the Eve Contract to regulate the sugar industry and, in particular, to determine the division of sugar proceeds between the miller and the growers. This contract, presently part of the Sugar Ordi- nance in Fiji, expired on March 31, 1970. 104. As required by the Eve Contract, CSR in 1962 established a local subsidiary, the South Pacific Sugar Mills (SPSM), to take over its milling activities in Fiji. At present it still holds 98% of SPSM's shares, the remaining 2% having been sold to Fijian residents by a public offering in 1964. 105. In 1969 Lord Denning was appointed to settle the dispute between SPSM and the growers on the terms of a new 10-year contract. After conduct- ing hearings in Fiji from August to September 1969, Lord Denning handed down his award on January 27, 1970. It stipulated that: (a) proceeds of sugar sales should be shared between the growers and the millers in the proportion of 65% to the growers and 35% to the millers, each paying their own costs out of their share; and (b) the growers should receive a guaranteed minimum price of F$7.75 per ton of cane. Funds are to come if necessary from the Sugar Stabilization Fund and should be recovered when sugar proceeds result in a price of cane above the minimum guarantee. Should the present amount of F$6 million in the Stabilization Fund be exhausted, the scheme is to be financed by a levy on sugar export to the United Kingdom (which means, in effect, that the amounts necessary to maintain the minimum cane price would come from the millers' share of the proceeds). 106. It can be argued that the 65/35 split recommended by Denning is not an unfair division of proceeds. From the 39.5% of total proceeds that it received under the Eve Contract (the weighted average from 1962 to 1968) SPSM was able to earn a total profit of almost F$15 million in seven years, certainly a substantial return on an initial investment of F$14 million. 107. Estimates have been made which show that, on the basis of the 65/35 split of proceeds, sugar milling would most likely be a profitable business in Fiji. Even if free market prices decline to only US 1.75 cents per lb. - probably a lower limit in the near future - the miller's income - 28 - would still be F$9 million. This should be sufficient at least to cover costs. The current International Sugar Agreement intends to maintain a free market price above the 1969 price of US 3.25 cents per lb. In that case the miller's annual income would be at least F$10.4 million, which should be sufficient to yield an acceptable return on capital. A separate provision of the Denning award for earlier payments to growers would how- ever involve some extra costs. 108. The guarantee of a minimum cane price of F$7.75 per ton is another matter, however. Sugar prices can be extremely volatile. It is difficult to imagine any commercial firm willing to accept the long-term risk of a guaranteed minimum price of cane. Although it is clear that the award was not intended to have the miller responsible for the guarantee, no other source of funds than the Sugar Stabilization Fund was offered. Once this fund is exhausted, the minimum price scheme would have to be supported from the miller's share. 109. In this case a fall in the free market price below US 3.25 cents per lb would then induce a very sharp decline in the miller's income. Any free market price below US 2.50 cents per lb would cause the miller to suffer an operating loss. 110. Although the risks were considered too high for the milling busi- ness to be commercially viable, the parent company allowed SPSM to sign a new contract in accordance with the terms of the Denning award but at the same time indicated that it would give the required two years' notice of withdrawal in March 1971. CSR does not wish to give this formal notice for reasons which include the possible effects on export marketing arrangements, and is pressing for an early start to negotiations which would lead to dis- posal of SPSM assets and contractual obligations. 111. The Government is seeking advice and has set up a select committee of the Legislative Council to "review the present position of the industry, to consider how it may best be secured against disruption, and to make recom- mendations." An early start to negotiations is necessary if the stability and efficiency of the industry are not to be affected. The apparent intention is to enter into an agreement to purchase SPSM assets, with payments spread over several years and met from profits. A state enterprise could be formed to take over the milling operation, headed by a board representing all parti- cipants in the industry and training, possibly under management contract, the SPSM personnel needed for continued efficiency. It is envisaged that CSR would continue to handle external marketing arrangements. The possibilities of a transfer of ownership to other private interests, foreign or domestic, or to growers, are discounted. 112. Fiji is at present capable of sugar production in excess of inter- national agreements and it should not be difficult to maintain output or exports at permissible levels under new mill ownership. Unless sound mill management, research and extension services continue, however, returns to growers must decline and less of the country's scarce arable land will become available for alternative crops. Less efficient marketing or lower quality could affect longer-term market shares in the two countries, the United States and the United Kingdom, for which the quotas are especially important because of prices substantially above those under the International Sugar Agreement. - 29 - III. DEVELOPMENT TO 1975 113. The Sixth Development Plan (1971-75) was in draft at the time of the mission but was shortly to be presented for discussion and endorse- ment by the legislature as a strategy for economic development over the next five years. It is the Government's most ambitious attempt so far to plan for the future. Within the macro-economic framework of the plan attention has been concentrated on the basic policy issues to be resolved if Fiji is to maximise output and employment notwithstanding its dependence on external economic forces, and on the role of the Government in promoting and participating in the development process. An annual average growth of GDP at factor cost of 6.6 is postulated with tourism, construction and infrastructure expansion as the leading sectors. Tourist-related services are postulated as the leading sector with an annual growth rate of 25%. Investment is projected to increase at more than 10% per annum, exceeding 32% of GNP in 1975. The concern of the Government extends to income distribution as well as growth. For social and political reasons a wide distribution of the benefits of economic development is considered as important in Fiji's multi-racial society as the growth of national in- come as a whole. 114. The design of the Sixth Plan (DP VI) reflects a critical analysis of performance during the previous five years. The main lessons which have been drawn are (a) the need for increased emphasis on export growth and import substitution in the "basic" productive sectors, agricultural and manufacturing; (b) the importance of private, particularly foreign, in- vestment and of the need to maintain an environment which will encourage a continuing inflow of capital investment from abroad; (c) the need in Fiji's circumstances to control government consumption in order to provide for increases in per capita private consumption levels; (d) the importance of creating enough employment opportunities during DP VI after a gradual deterioration in the employment situation in the previous five years; and (e) the desirability of improving income distribution to the extent com- patible with other development targets. 115. The policy approach and the plan strategy appear appropriate. The best development prospects undoubtedly lie in tourism but, because its benefits will be concentrated mainly in Suva, the capital, and on the west coast of Viti Levu, other avenues for growth must also be pursued. With the expansion of sugar and sugar processing, the prospects in agriculture and manufacturing are good. Government consumption levels need to be held down to provide the resources for infrastructure investment while leaving room for higher private consumption levels, which have stagnated over the last five years. Further private investment will be required if satis- factory growth rates are to be attained. The levels of growth and invest- ment projected for the next five years appear to be high, however, in re- lation to demand and capacity constraints which have emerged in recent years. The mission's assessment of development prospects to 1975 is pre- sented in the following section. - 30 - Growth Potential 116. The projections for growth in GNP between 1970 and 1975 are set out in Table 14. They are based on the projection model described in Annex A and the assessments of probable trends in tourism, exports and investment set out below. An annual growth rate of 5.0% in GDP and, taking into account the increase in factor payments abroad, of 4.5% in GNP, is considered feasible if tourism continues, on the larger base now established, to increase at rates approaching those of the five-year period now coming to a close, and if world sugar prices are maintained. This should result in a rate of increase in private consumption substantially above the projected rate of population growth. Table 14: GROSS NATIONAL PRODUCT BY TYPE OF EXPENDITURE (F$ million, 1970 prices) 1970 1975 % per annum Private Consumption 127.6 155.8 4.1 Government Consumption 23.6 30.6 5.3 Gross Fixed Capital Formation Private 37.6 43.2 2.8 Government 12.9 /1 16.9 5.5 Change in Stocks +1.9 +2.0 1.0 Exports of Goods & Services Tourist revenues 26.7 54.0 15.1 All other 61.6 70.5 2.7 Less Imports of Goods and Services -97.1 -124.1 6.5 Expenditure of GDP 194.8 248.8 5.0 Net Factor Income from Abroad -7.1 -14.4 Gross National Product 187.7 234.4 4.5 /1 Based on budget estimates with an actual figure of F$11.5 million, which is considered more likely, the annual growth rate would be 8%. Source: Mission estimates - 31 - 117. Within the economy the main impact of the projected growth domi- nated by tourism is in the services sector which, as a result, is estimated to grow by 11% per annum to over F$24 million in 1975. By comparison, value added in the cash agriculture, forestry and fisheries sector, with sugar production constrained by international quotas, is considered likely to grow from F$29 to F$33.5 million, an annual average of 2.9% from 1970 to 1975, instead of the 4.5% projected in the plan. The components of change in GDP which make up the growth of 5% per annum projected for the economy as a whole are shown in Table 15. Table 15: GROSS DOMESTIC PRODUCT AT FACTOR COST (F$ million, 1970 prices) 1970 1975 % per annum Agriculture, Forestry & Fisheries Cash 29.1 33.5 2.9 Rural Household 19.1 21.1 2.0 Mining 2.6 3.1 3.6 Manufacturing & Processing 19.3 27.2 7.1 Construction 15.5 20.2 5.5 Electricity & Water 2.0 2.9 7.7 Transport 15.1 18.4 4.0 Trade 26.6 33.6 4.8 Rental 17.4 24.5 7.1 Education & Health 7.7 9.9 5.1 Services, n.e.s. 14.4 24.3 11.0 Public Administration 5.2 7.8 8.4 GDP at factor cost 177.6 226.7 5.0 Source: Mission estimates 118. As explained in the section on tourism later in this report, an annual increase in tourist traffic of 15-20% is projected from 1969 to 1975. Actual growth could exceed (or fall short of) this projection, with signi- ficant effects on the economy as a whole. The projection nevertheless appears to be consistent with present trends and appropriate for planning purposes. Accordingly, tourism expenditure is projected to increase from F$20.9 million to F$54 million in 1975, a figure substantially lower than the Plan estimate of F$83 million. This accounts for most of the difference between the overall growth rate of 7.1% in export earnings projected by the mission and the 12.3% projected by the Fijian authorities. - 32 - 119. Allowance has been made for the substitution of home-produced con- sumer goods for imports in accordance with government policies and known possibilities. By 1975 increased output for import substitution should be of the order of F$5 million, primarily in the form of light manufactured goods, beef, and rice from the proposed Rewa and Navua schemes. Investment 120. Estimates of investment required are given below: Total Average 1971 - 1970 1975 Annual Increase 1975 Government fixed capital Formation 11.5 16.9 8% 72.8 of which: Central Government (60.0) Local and Government Enterprises (12.8) Private fixed capital Formation 37.6 43.2 2.8% 197.9 of which: Hotels 3.7 6.5 12..0% Tourist-related services 2.4 4.3 -12.0% Manufacturing, excluding sugar and copra processing 7.8 10.9 7.0% Construction 1.0 1.6 10.0% 121. Private investment in tourist-related services is projected to increase by 12% per year. This is lower than the projected :annual 17% in- crease in tourist revenue because the high rate of investment in these sectors from 1967 to 1970 should create the capacity to accommodate some of the traffic increase after 1970. Furthermore, investments in 1974 and 1975 will be for the requirements of the years after 1975 and it is diffi- cult to foresee a continued annual compound growth rate of over 15% in tourist traffic after.1975. 122. As the construction industry seems to be working at close to capacity level during 1970, we consider the 10% annual growth rate of in- vestment in this sector:projected by the Central Planning Office .to be reasonable. Investment .in manufacturing industries other than sugar pro- cessing is also projected to increase at the relatively rapid rate of 7% per annum while investment in the remaining industries should stabilize at an annual rate of F$20 million, slightly below the peak *rate of F$22.7 million in 1970. - 33 - 123. The core of DP VI is a program of F$82 million in government capital expenditure. This is ambitious in relation to Fiji's past expe- rience and performance. Capital expenditure is to be raised from F$8.5 million in 1969 to an average of over F$16 million during 1971/75. Short- falls of more than 15% in planned annual expenditures have been usual. To double actual expenditures 6ver a relatively short period may be beyond the capacity of a public administration which must inevitably go through a further period of transition in the near future. Actual expenditures of 25% or more below present plans may be a more realistic expectation. Priorities may need to be established with the more urgent projects having first call on manpower resources and the others being carried out as per- sonnel become available. 124. Accordingly, the annual increase in fixed capital formation from 1970 to 1975 is projected at 8%. This would yield a total investment over the five-year period of F$73 million, of which F$60 million is expected to be central government fixed capital formation and the remaining F$13 million to be investments by local government enterprises. 125. Total fixed capital formation in 1975 is therefore projected to be F$60.1 million, considerably lower than the F$82.7 million projected in DP VI and only 19% higher than in 1970. We feel, however, that the present high rate of capital formation (an extimated 27% of GNP in 1970) will be difficult to sustain, much less to increase. The investment target of DP VI would mean a rate of capital formation in 1975 of 32% of GNP which would seem high for a relatively low-income economy such as Fiji, even with substantial capital inflows. Our projected investment rate would imply a rate of 26%. This is still a high projection and in view of the excess capacity that must result from the high rate of investment in 1969 and 1970 unaccompanied by corresponding output growth, a substantial decline in the rate of capital formation from 1970 to 1975 concurrent with the projected output growth of 5% might be feasible. Sector Development Agriculture 126. As in past years, trends in the agricultural sector are likely to be largely determined by what can be predicted for the sugar industry. The estimates at 1969 prices are set out in Table 16. The apparently high increases for copra, bananas, rice, beef and fish are the product of special factors, discussed in the following paragraphs on each commodity. If the expected high output of sugar is attained in 1970, growth rates between 1970 and 1975 would be of the order of 3% per annum for the cash agriculture sector as a whole. - 34 - 127. Sugar. Exports of raw sugar are determined by quotas allocated under the International Sugar Agreement, the United Kingdom Negotiated Price Agreement and US Trade Agreement. Exports under these quotas seem likely to be limited to 337,000 tons which, together with domestic demand at 25,000 tons, would give a controlled production of 362,000 tons in 1975. The ISA Article 44, relating to the Hardship Fund for developing countries, makes allowances for "bumper" seasons, but should not be taken into account in the trend over the whole period. Similarly, though the ISA quotas are due for review in 1971, it is inadvisable to adumbrate any upward revision of the basic quotas. On yields of raw sugar per acre over the period between 1950 and 1969, the trend indicates a yield of 3.3 tons rAw sugar per acre by 1975. For a production of 362,000 tons, and cane yields at 24.9 tons/acre with a 13.25% out-turn of sugar, the harvested acreage would be approximately 110,000 acres. The forecast for sugar-cane envisages a contraction in the harvested acreages which would release about 6,000 acres for other crops. Table 16: GROSS VALUE OF AGRICULTURAL COMMODITIES FORECASTS FOR THE CASH SECTOR, 1975 (1969 producer prices F$'000) Value Growth Trend Actual 1969 Forecast 1975 1969/75 Crop Unit Volume Value Volume Value %p.a. Sugar '000 tons 2,339 16,373 2,732 19,120 2.6 /1 Copra '000 tons 33 4,327 50 6,500 7.0 Bananas '000 cases 90 291 150 490 9.1 Rice, Padi tons 21,000 1,680 40,000 3,200 11.4 Beef tons 3,517 1,182 6,000 2,010 9.2 Butterfat '000 lbs 900 360 1,200 480 4.9 Fish (Domestic Sales) '000 lbs 1,800 270 4,000 600 14.2 Timber '000 cu.ft. 4,400 2,304 5,500 3,000 4.5 /1 If 1970 output exceeds 2.7 million tons, as seems likely, growth from 1970 to 1975 would be negligible. Source: Appendix Table 7.1 and mission estimates. - 35 - 128. Copra. Production trends will be reversed by new plantings and replantings of 70,000 acres under the Coconut Subsidy Scheme. This acreage will be bearing by 1975. Although some other trees will be declining or going out of production, the total supply of copra in 1975 is estimated at 50,000 tons on the basis of existing modest yields per acre and could be higher if some improvement in yields can be attained. 129. Bananas. It is difficult to forecast any dramatic increase in the volume of exports, on the recent history of falling production for the ex- port market, and producers' disenchantment, due to problems of disease con- trol, packaging and collection for export. Nevertheless disease control measures are available, and improvements are possible in marketing services. It appears reasonable to assume exports at 150,000 cases by 1975, a return to past export levels. This does not take account of sales on the domestic market, for which statistics are not available. 130. Rice. Fiji could become self-sufficient in rice. Domestic con- sumption is estimated at 24,000 tons milled rice by 1975, based on popula- tion projections and current estimates of consumption scales. Production on 24,000 acres of rain-fed padi is estimated at 14,000 tons milled rice, with average yields at around one ton per acre padi, in a "normal" season. Assuming that between 4,000 and 6,000 acres of additional land can be developed for double cropping under irrigation in accordance with govern- ment plans for development of the Rewa and Navua deltas, the balance of estimated consumption at 10,000 tons milled rice could be produced with yields per crop of between 1.5 and 2 tons padi per acre. Total production, therefore, is forecast at 40,000 tons padi (24,000 tons milled rice). 131. Beef. Development of domestic beef production has proceeded rapidly, on a few small holdings, over the past few years. It is envisaged that this type of development will continue, and be geared to the ability to develop and manage pasture and livestock. A forecast growth of 9% allows for a continuing element of import substitution, with provision for the development of a regional export trade in canned products. 132. Butterfat. Production of dairy products, milk and butter, has increased at around 5% per annum between 1965 and 1969. Development over the period 1969 to 1975 appears likely to be largely confined to south- eastern Vitu-Levu, and centered on the capital, Suva. The forecast by 1975 envisages a continuing growth of 5% per annum. As standards of minor roads improve, collection from a wider area will become practicable. In addition, dairy production may grow with the development and reclamation of land in the Rewa and Navua delta areas. These developments, however, appear more likely to occur towards the end of the projection period, and beyond. 133. Other Commodities. Other commodities cover a wide range of crops sold on the domestic market, and for export, and includes fresh fruit, vegetables, hides and skins, tobacco, yaqona and green ginger. Total domestic sales are not recorded but exports were valued at F$600,000 in 1968. The prospects for growth cannotibe quantified but appear good. - 36 - 134. Fish and Shell fish. Domestic market sales are recorded as 1.8 million pounds valued at F$270,000 in 1969. With rapid development of inter-island marketing facilities, and small-unit fisheries, it appears likely that sales can be increased to at least F$600,000 by 1975. This ex- cludes production by the export-oriented Japanese Pacific Fishery Company at Levuka, which is not significant in the domestic market. 135. Forestry. Current estimates are that timber consumption will rise from the present 4 million cubic feet per annum to 16 million cubic feet by about 1995, and, at that time, the reserve of timber available in the natural forest will be very small. 136. Tb.?ensure self-sufficiency in timber, a planting rate of 4,500 ares/annum increasing to 6,500 acres/annum over the plan period is neces- sary. These plantings will need to be grouped in viable industrial units, and divided approximately equally in and between softwoods (p. caribbea) and hardwoods. For hardwoods, 6,000 acres of mahogany (Swietenia macro- phylla) has been planted at Taileou (near Suva, Viti Levu) over the past few years. A planting-program of 1,000 acres/year will be maintainedto a total of 40,000 acres. Further investment in improved extraction methods will be required. Exploitation of the indigenous forest is forecast to continue at a rate between 5% and 6% over the period 1969/75. 137. These projections for the agriculture sector assume the con- tinuing level of efficiency in management and extension and research services of the sugar industry. Similarly, extension staff, time and effort for development of other crops will have to match production fore- casts. Ministry of Natural Resources estimates of expenditure would appear to fulfill this requirement, though the provision for research appears in- adequate (see Table 17). Table 17: MINISTRY OF NATURAL RESOURCES ESTIMATES OF EXPENDITURE DP VI 1971/75 F$'000 % Annual 1968 1971 1975 Increment Agricultural Extension Services Personal Emoluments - 401 575 + 9.4% Other Charges - 352 426 + 4.9% Agricultural Research ervices Personal Emoluments - 214 252 + 4.1% Other Charges - 637 477 - 7.5% Veterinary and Regulatory Division Personal Emoluments - 92 121 + 7.1% Other Charges - 123 + 6.7% Fisheries Division Personal Emolumenta) - 59 83 + 7.1% Other Charges) - 216' 325 +* 10.7% Total Personal Emoluments 548 755 1,031 Other Charges 476 1,328" 1,388 - 37 - 138. For the development of rice production, however, the implementa- tion and supervision of major irrigation schemes would require additional senior technical staff. Such staff could not be found in full from present resources, and overseas assistance, in funds and personnel, is likely to be required. 139. The provision of adequate agricultural credit facilities will be an important factor in the development of efficient production on small holdings. Estimates of annual credit requirements have been prepared by the Ministry of Natural Resources, covering the period 1971/75, and these estimates indicate a considerable increase on the current level of loans advanced for agricultural purposes by the Fiji Development Bank. Table 18: AGRICULTURAL LOANS Fiji Development Bank Ministry of Natural Loans Granted July 1968 Resources to June 1969 Estimates F$'000 1971 1975 Sugar Cane 8 - Coconuts 7 - 28 Rice 16 85 686 Bananas - 73 165 Livestock 49 292 292 General 87 41 79 167 491 1250 140. In summary, other than for sugar, the prospects for further growth in agricultural production are good because of investment activity undertaken in recent years in relation to copra and other main agricultural products. Agricultural production, by 1975, should show a better balance between sugar and other commodities, sugar having declined in importance from 56% of the producer valuation of cash crops in 1969 to under 50% by 1975. This trend, towards a more even balance, should continue beyond 1975, with increasing emphasis on the development of fat stock, dairy, and fish production. Manufacturing 141. Growth rates in the manufacturing and processing sector will be restrained by slow growth in sugar processing, the major industrial activity. Cane production can increase only at average rates permitted by export quota arrangements. By 1975 the share of sugar and copra processing will, if pro- jected developments occur in other industries, make up only about 40% of - 38 - the sector's contribution to GDP. With the constraints on sugar, manufac- turing and processing are unlikely to more than maintain their present share of 12% of GDP even with solid increases in the output of other in- dustries in the period to 1975. 142. Import substitution has been an important element in the growth of manufacturing in the past five years and there remain substantial oppor- tunities for further development in this direction. Of the growth rate of 7% projected for this sector a quarter is attributable to further sub- stitution of imports. 143. The main factor in industrial output growth will be increasing intermediate and final demand for the products of industries already estab- lished and operating economically in Fiji. There are however a number of prospects for new products under investigation. The Government is actively promoting industries which will use locally available raw materials includ- ing bagasse, molasses and other by-products of the main agricultural acti- vities. A survey team arranged under the Indian Technical and Economic Cooperation Program recently reported on small-scale industrial opportuni- ties, some of which have export potential. Technical assistance in a num- ber of industrial fields is being provided by UNIDO experts. 144. Fiji has a substantially larger industrial base than its Pacific Island neighbours and already exports within the region small quantities of cigarettes, cement, biscuits, paint and some other products. This trade should expand rapidly from its small base over the next five years, assisted by the advantages of a central location in the transport system of the region. 145. Industrial exports could also grow rapidly if the plans of New Zealand and other firms to process imported raw materials in Fiji for ex- port to New Zealand, Australia and other countries, taking advantage of relatively low labour costs, are implemented and initiated by further foreign enterprises. A large clothing factory is already being established and for other labour-intensive processes this form of foreign investment could be attractive. 4 Tourism 146. Tourist traffic has expanded rapidly in the past decade. Taking into account trends in visitor flows from the major countries of origin, Australia, New Zealand and the United States, and likely changes in air services and air fares, growth rates of 15-20% annually in the next five years are probable and might be exceeded. 147. After large additions to hotel capacity in the past decade (to about 1,500 rooms), projects now underway or soon to begin will add about 50% more capacity in the next two years. Further additions to capacity will be required after 1972 if the growth of traffic is maintained. Suit- able beach sites within easy reach of Fiji's international airport on the - 39 - main island are few, but if properly developed should provide sufficient capacity increases over the next three to five years to meet demand. The further development of the sector on the outer islands will involve more complex problems of transport and supply. These and other principal factors determining development should be evaluated in detail as a basis for for- mulating a longer-term plan for tourism. 148. On the basis of the tentative traffic projections mentioned above, accommodating the flow of visitors in 1975 would require investment of up to F$20 million. While there is very considerable interest in tourism in- vestments among private investors both in Fiji and abroad, the Government either directly or through the Fiji Development Bank will be called upon to provide loan finance for hotel development. It will also be asked to provide some tourism infrastructure. In the absence of a fully developed plan for tourism, the extent of the call on government funds cannot yet be assessed in detail but it will be considerable. 149. On the data available, the impact of the growth of tourism on the economy will be considerable. Employment in the sector can be expected at least to double by 1975, and its growth will provide a major stimulus to increased output and employment elsewhere in the economy. Moreover, tourism appears to offer the best available prospects of rapid increase in Fiji's foreign exchange earnings in the next five years. Hence the sector is one which merits priority in government planning. The Bank is assisting in organizing such planning and will also consider ways of helping to finance the heavy investments required in the sector in the next five years. Transport and Communications 150. Future transport needs have been under survey by a UNDP team which began operations in mid 1966. The recommendations of the team include the reconstruction of the Suva-Nadi highway, a project which will be the largest in the Sixth Development Plan and is under consideration for Bank financing, the construction of a transinsular road on Vanua Levu and a number of minor new roads. Proposals have been made for improving inter- island shipping services, master plans for the principal ports have been prepared and a plan drawn up for transport investment over the next decade. 151. On the basis of their assumptions of growth in GDP of 5% and of 6% for transport demand, a total investment of F$38 million is recommended for the next ten years. Two-thirds of this amount would be for roads, 20% for ports and the remainder for equipment and vessels and upgrading air- ports. 152. The improvement of transport services is of particular importance for Fiji's outer islands, including Vanua Levu, the second main island. A port or ports of entry for this island would promote regional development and exports by reducing costs for overseas shipping, and is recommended. - 40 - 153. The communications system is well-developed and particular atten- tion has been paid to the links with isolated island communities which are needed for social as well as economic reasons. Much of the equipment is now in need of replacement and this would be a suitable field for bilateral aid. Power 154. At the present time, all electricity for public supplies is generated by diesel engine-driven alternators. A statutory body, the Fiji Electricity Authority (FEA), operates power stations in the western half of Viti Levu and expects to assume control of that in Suva, now operated by the City Council. One further station is controlled by the gold mine at Vatukoula, which also supplies electricity for public use. The sugar mills operate and control their own supplies. 155. During 1969, the total unit generation, excluding the mills, was 79.65 million KWH with an associated peak demand of 15.1 megawatts. Demand is expected to require, by 1977, a total unit generation of 200 million KWH with a peak demand of 41 megawatts. 156. The Government is now interested in the possibilities for hydro- electricity. Previous reports of hydroelectricity have not been encourag- ing, largely due to the high capital costs in relation to utilization. The growth in demand over the last five years, and projected consumption, appear to establish a better case warranting further, more detailed and urgent examination. A request is being made for UNDP assistance in con- ducting feasibility studies. 157. A preliminary examination of the possibilities for hydro- electricity has been carried out and a site in the central highland area of Viti Levu tentatively recommended. Development appears possible and economic. There are a number of alternative sites, though of lower potential. 158. Capital costs for a power station in the highland area are ten- tatively estimated at F$10 million of which F$6 million would be required in foreign exchange. In addition a 30-mile access road and a suitable transmission system would be required. The latter is estimated at F$5 million, including reinforcement of the Suva system. Education and Training 159. As indicated in Chapter II, it is likely that Fiji will require external assistance for the expansion of technical education to meet the demand for skilled manpower arising from further development. The man- power situation is already tight and will be a constraint on economic growth even in the immediate future. The requirements for skills extend to tertiary levels and the regional University of the South Pacific in - 41 - Suva will have to be greatly expanded to cater for Fiji's needs as well as those of neighbouring Pacific Islands. This applies to other institu- tions for advanced training in Fiji which have a regional bias. A survey of manpower needs, not necessarily confined to Fiji, is needed to provide the basis for early identification of education and training projects. Resources Employment 160. The economically active population of Fiji, defined to include family and own-account workers as well as wage and salary earners, is pro- jected to increase from 140 thousand, including 8,600 unemployed, to 186 thousand between 1968 and 1975. The base-year estimate is subject to a considerable margin of error and in the absence of a comprehensive manpower survey can be taken only as a general order of magnitude. Annex A includes the mission's projections of employment as determined by fixed output co-efficients and the sectoral pattern of growth projected for GDP over the same period. On these assumptions, new employment opportunities would more than match the number of entrants to the labour force. However, they take no account of increases in labour productivity over the period. 161. Estimates of productivity increases can only be conjectural. No comprehensive figures exist for earlier periods. The Central Planning Office assumes annual growth in productivity of not less than 3% in non- agricultural sectors and 0.5% in the cash agriculture sector. The first figure appears high. Technical progress is unlikely to be marked either in the small-scale manufacturing enterprises suited to Fiji's market size or in the other sectors (services and construction) which are expected to grow most rapidly over the period. Productivity effects seem likely to be small. 162. Provided, therefore, that the projected growth of GDP is attained, it seems possible that employment opportunities may be generated as rapidly as needed for the increasing work force, and in favourable circumstances rapidly enough to.improve the overall employment situation. The critical variable may be not productivity but the desire of workers to move within economic sectors and in particular out of the subsistence sector into areas which may not be growing sufficiently to provide enough openings. Public Finance 163. One of the main policy issues discussed within the Government in planning for 1971-75 stemmed from a review of estimated revenues and recurrent expenditures to 1975. It had been calculated that at existing taxation rates, with recurrent expenditure growing at 9% a year and a planned level of transfer from the recurrent to the capital budget, there would be a gap of F$6 million (about 10% of expenditure) between net - 42 - ordinary expenditure and net _tvenues. It was felt unrealistic to plan for lower growth in recurrent expenditures in view of government commit- ments to an increasingly high level of services. The conclusion was that a major tax revision would be required. 164. The mission's view is that the more appropriate policy prescrip- tion may be one of restraint in government expenditure. From 1966 to 1970 the annual rate of increase in government consumption at constant prices is estimated at 5.2% within an increase in GNP of 5.0%. It proved possible during this period to provide for improvements in the range and standard of government services and for transfers to the capital budget out of current revenues at approximately the same levels as are envisaged for the next Development Plan. It seems possible that similar relationships could pre- vail in regard to revenues and recurrent expenditures. This will however require careful management in the post-independence period when, if expe- rience in other countries is a guide, there may be strong pressures for increases in recurrent expenditure levels. 165. There are advantages to be gained in avoiding large changes in the tax structure in the initial stages after independence. The Government may wish at least initially to avoid reforms which could be interpreted by the private sector, and by foreign investors, as basic changes in policy. The projected rate of increase in private consumption, 4.1% per annum over the next five years, appears large enough to allow for revisions which would provide for some extra growth in revenues over the rate of increase in GNP as a whole. It is however, a policy objective to provide for substantial increases in private consumption levels after the negligible increases in the last few years. Until the need for proportionately higher revenues is deeply established, changes in the fiscal structure should be concentrated on improvements in detail and the removal of anomalies. This in itself could significantly increase net revenues. Development Finance 166. Total investment needs for the Sixth Plan period, at 1970 prices, are estimated at F$280 million or 26% of GNP. 1/ The components would be F$70-75 million in government fixed capital formations, approximately F$200 million in private investment and an allowance for average annual increases in stocks of F$2 million. The investments in the private sec- tors could be financed, at projected rates of increase, in rouRhly equal shares by household savings, business savings and private fore; ,n capital inflows. 1/ Allowing for capital inflows, official and private, this would imply a domestic savings ratio of about 18 percent. - 43 - 167. Public sector capital formation of F$73 million assumes the completion of F$60 million of investment under the development plan, as discussed in paragraph 120, and a further F$13 million in capital formation by government enterprises and local authorities. In these circumstances the public sector would account for about 26% of total investment, almost the same proportion as over the period 1966-70. 168. The sources of finance for the capital budgets 1971 to 1975 are estimated as follows: F$ million Domestic 32 Revenue Surplus (12.5) Local Borrowing (18.0) Miscellaneous ( 1.5) External Aid 28 Grants ( 8.0) Loan finance (20.0) Total 60.0 The loan figures are in disbursement terms. Considerably higher commit- ments for project loans could be required to reach a disbursement total of F$20 million within the Plan period. 169. The principal sources of loan finance for DP VI are the United Kingdom, and potentially, the Bank. The former has indicated readiness to provide substantial loan assistance on terms similar to Bank loans in relation to the grant aid already committed for projects in this plan. Fiji became a member of the Asian Development Bank in 1970 and it appears likely that projects will be identified for ADB lending. As an independent country it will also be more clearly eligible for bilateral capital aid by countries with Pacific interests. Australia and New Zealand give sub- stantial economic aid within this region, usually in grant form, but have directed it so far mainly to countries and territories for which they have carried administrative responsibility. Fiji has raised development funds in Australia in recent years, at 0.5% above Commonwealth loan rates, and may wish to retain its link with this market. Eligibility for Bank Lending 170. Fiji has a relatively high per capita GNP (an estimated F$356 or US$410 in 1970), good general education and health services and a sound administrative system. It will enter independence on a firmer economic base than many new countries. The market and resource constraints which exist partly as a result of good overall performance in recent years sug- gest a cautious view of growth prospects in the near future, but the econ- omy should sustain a growth rate at least approaching the 5% per annum of -44 - the past five years if tourism development continues its present trends. The private capital inflow has been substantial. Additional external re- sources are required for public sector investment which over a long period has lagged behind recurrent expenditure on government services. 171. Under the present colonial system of 100% currency backing, balance of payments problems have been avoided. The development of an independent monetary policy in an open economy carries the risks of higher import demand but the Government is unlikely to permit the emergence of any major imbalance. The balance of payments mechanism should continue to contain elements of delf-adjustment. Increases in remittances of earnings overseas will occur mainly as a result of new capital inflows. Much of the 7% annual increase in imports projected to 1975 can be attributed to tourist and foreign in- vestment expenditures. Equilibrium should not be difficult to maintain. 172. Minimal foreign borrowing has kept public debt service ratios low (1.1% of commodity exports in 1969) and debt service on private account is not significant. Debt service ratios in 1975 are estimated at 3.0% of commodity exports and 1.3% of non-factor export receipts for goods and services, the difference indicating the importance of tourism. Fiji will in our view be creditworthy for Bank lending, on its own account, following independence. ANNEX A A Short-Term Projection Model of Fiji This model is constructed for the purpose of projecting the economic structure of Fiji from 1970 to 1975 on the basis of exogenously projected levels of tourist expenditure, export, investment and import sub- stitution. Private and government consumption, household income, government revenue and output of the production sectors are endogenously determined by the model. The core of the model is a set of input-output coefficients relating the intermediate demands for each type of goods and services to the output of each production sector. Household income generated by each sector is determined by the level of production in the sector. Similarly, govern- ment revenues are linked to production and income by a set of coefficients representing the incidences of direct and indirect taxation on production, income and imports. Private consumption is in turn determined by the sum of income generated and government consumption by the sum of revenue received. As productive capacity other than that of the construction sector is unlikely to be a major factor in Fiji's economic growth in the next five years, no capacity constraint on production is specified in the model. Ex- ternal demand rather than capacity will undoubtedly be the limiting factor in the growth of merchandise exports. The rapid growth of tourist facilities over the last few years is expected to continue after 1970 and should be sufficient to meet the projected increase in demand. Only the building and construction sector is expected to face a capacity problem over the next five years, but its effect on the growth of the economy can be taken into account by limiting the exogenously-determined level of investments. Specifications of the model are as follows: I. Definition of Variables The economy is divided into 12 production sectors as follows: (1) Agriculture, Forestry and Fisheries (excluding subsistence) (2) Mining and quarrying (3) Sugar and Copra Processing (4) Manufacturing, n.e.s. (5) Construction (6) Electricity and Water (7) Transport and Communications (8) Trade (9) Rental (10) Education and Health (11) Services, n.e.s. (12) Public Administration - 2- Exogenous Variables e exports of sector i s i import substituting production of sector i f i fixed capital investment expenditures on output of sector 1 k increase in inventory of sector i i t i tourist expenditures on output of sector i q increase in factor income remitted abroad r government debt service payments Endogenous Variables x output of sector j g total government revenues y total household income x joutput of sector i used by sector j gi output of sector i used in government consumption ci output of sector i consumed by household government revenue received from sector j government revenue received from household v. household income generated by sector j Structural Parameters a input-output coefficient representing the amount of output i consumed per dollar output of sector j p government revenue received per dollar output of sector j including business profit tax, indirect taxes on intermediate inputs and imports used, and profits of government enterprises Ph government revenue received per dollar household income, including income tax and indirect taxes on consumer goods d household income generated per dollar output of sector j mi government current expenditure on sector i per dollar revenue wi consumer expenditure on output of sector i per dollar income -3- II. Structural Equations x = a x i = 1,12 j= 1,12 mi p x j = 1,12 mh Ph v d x j = 1,12 Si U g i = 1,12 ci - w y 1 = 1,12 III. The Complete System of Equations The model may now be represented by the following balance equations: Production Sectors: The equality of the supply and demand of each sector's output can be written as: 12 x xi + gi + ci + e + s + f + t + ki 12 - a x + g + wky + ek + S jj k k k + fi + + ki -4- Government Revenue: Total government revenue equals the sume of revenue received from all sectors less external debt service payments: g m + mh- r j 1 p x + phy r j = 1 Household Income: Total household income equals the sum of income generated by all sectors, less the increase in income remitted abroad. 12 y = v - q j = 1 = 2 d X -q j = 1 IV. Projections of Exogenous Variables A. Exports of Goods and Services Projected exports of goods and services in 1975 are given in the table below. Re-euports are considered as an export of the trade sector representing the trade margin, plus an import component representing the c.i.f. cost of the goods. Exports of transport and other services are largely the Central Planning Office's projections. Tourist expenditure is projected to increase at an annual rate of 17%, from an estimated $20.9 million in 1969 to $54 million in 1975. Approximately one-third of this amount is expected to be expenditure on imported goods, so that expendi- ture on domestic goods and services should amount to less than $35 million. -5- (F$ million) Tourist Other Goods Expenditure & Services Agriculture 3.08 of which, banana (.48) Mining 3.60 of which, gold (3.20) Sugar & Copra Processing - 34.93 of which, sugar (29.62) coconut products (5.31) Manufacturing, n.e.s. 1.07 6.46 Transport 3.89 15.60 Trade 6.34 1.80 Services, n.e.s. 23.36 1.00 B. Import Substitution The model assumes constant propensity to import for all sectors. To allow for the expected substitution of domestic production for imports in some products, the model includes exo- genously-determined production for import substitution. Total value of import substitution in 1975 is projected to be $4.45 million, with agricultural products accounting for $2.45 million and manufactures for the remaining $2 million. C. Capital Formation The projection of a fixed capital formation total of $60 million in 1975 is explained in Chapter III. Excluding $21 million of imported capital goods, the projected expenditures are $2.35 million on mining and quarrying, $2.44 million on manufactured goods, and $34.31 million on construction. The projected $2 million increase in stocks is allocated to the trade sector. - 6 - D. Structural Adjustments It is apparent that, in recent years, a decline in the propensity to consume has been partly responsible for the slow growth in consumption and the very rapid increase in capital for- mation. Our base year estimates for 1966 indicate that, excluding subsistence agriculture, household savings were some 7 percent of income. The rate has apparently increased to 8-9 percent in 1969 and 1970. We assume that this rate will further increase to 11 percent in 1975. To account for the accelerated flow of foreign capital in recent years, an $8.5 million increase in factor income remitted abroad is projected for 1975. The external debt payments of the government in .1975 are estimated to be $1.6 million. V. Economic Structure in 1975 The economic structure of Fiji projected on the basis of the model is given in Table A-1. The figures for the agriculture sector include subsistence agriculture whose output in 1975, using the Central Planning Office's projection of $21.1 million, is assumed to be entirely consumed. Production for import substitu- tion has been included in the consumption figures. VI. Employment Structure in 1975 Projections of employment by sectors on the basis of the model's projected output in 1975, and assuming labor productivity remains as in 1968 are presented in the following table: Employment by Industrial Sector (including family and own account workers) (in thousands) 1968 1975 Agriculture 75.0 93.7 Mining 2.2 2.6 Manufacturing 11.1 16.7 Construction 8.2 13.8 Electricity and Water 0.8 1.4 Transport 6.6 10.9 Trade 10.6 16.0 Public Administration, Education & Health 10.6 17.6 Services, n.e.s. 6.8 15.5 Total 132.0 188.2 -7- Table A - 1 PROJECTED ECONOMIC STRUCTURE OF FIJI IN 1975 (F$ million, in 1970 producers' prices) Fixed Sugar Con- Public SUB TourIst Capital Increase Govt. Private GROSS Consuming Sector Agri- & Copra Manufac- struc- Elec. & Trans- Educ. & Service Adminis-T(TEAL Exports Expen- Form- in ronsump-Consump- TOTAL Producing Sector culture Mining Processing turing tion Water port Trade Rental Health n.e.s. tration Cols. f.o.b. ditures ation Stock tion tion Agriculture .73 .20 19.11 1.22 1.09 .02 - - - .44 3.19 .09 26.18 3.08 - - - .90 29.07 59.23 Nining - - - .26 .56 - .05 - - - - - .83 3.60 - 2.35 - - - -.78 uugar aid Copra Processing - 36.'3 - - 1.62 36.35 etanufcturing, n.e.3. .91 .60 2.55 2.93 3.13 .S0 7.85 h.30 - .88 .83 26.75 6. 6 1.07 2.66 - - 17.10 51.82 Construction .18 .16 .25 .26 .11 .18 .23 .74 1.72 - - - 3.81 - - 36.31 - 2.07 - 60.19 Electricity s Water - 1.60 .25 .44 .22 .06 .62 .62 - .26 .37 .67 6.26 - - - - .96 5.22 Transport .29 .12 .13 .73 1.09 .18 .35 .05 - .0h .11 1.36 6.63 15.60 3.89 - - 6.08 6.66 36.67 Tride .66 .20 1.15 2.66 2.01 .11 .81 to - .28 .77 - 8.37 1.80 0.36 - 2.00 - 26.37 62.87 Rental .56 - .19 .32 .06 - .21 L.6b - 1.89 1.68 .23 6.38 - - - - - 19.88 26.25 Education & Health - - - - - - - - .23 .23 - - - - 11.4h 3.51 15.17 Service, n.e.s. - - .13 .26 .27 - .23 1.26 - .28 .16 1.00 3.55 1.00 23.36 - - - 9.67 37-59 Public Administration - - - - - - - - - - - - - - 12.06 - 12.06 LIports 1.68 .89 2.03 21.61 9.11 1.20 3.55 .6 - 1.16 6.04 .79 68.33 4.00 19.36 20.39 - - 31.66 12h.12 inutrect Taxes - .08 .13 6.88 2.31 - 2.bh .1L - .10 .34 - 10.42 - - - - - 11.72 22.10 V,due Added 4.oh 3.12 10.63 10.73 20.23 2.96 18.66 33.63 26.53 9.88 26.31 7.77 226.65 - - - - - Gross Output/apenditure 59.23 6.78 36.35 51.82 110.19 5.22 36.67 62.87 26.25 15-17 37.59 12.06 308.20 70.L7 5o.00 cO.10 2.00 30.55 155.82  ANNEX B UNDP - Pre-Investment Studies 1. Rewa and Navua Irrigation Project The purpose of the project is to determine the feasibility of developing rice production in the river basins of Rewa and Navua covering a total area of 29,000 acres. Average annual production and imports of rice for 1967-69 are estimated to be 12,000 tons and 8,000 tons respectively, indicating that increased rice production will permit import substitution. A pilot irrigation scheme of about 260 acres was undertaken under the UNDP/ FAQ program in January 1969 and necessary investigation work on 8,000 acres of the Rewa basin has been carried out simultaneously. For the Navua area, the Government engaged private consultants, Hunting Technical Services Ltd., and a completed report was received by the Government in December, 1969. The report indicates that of the 18,800 acres studied, about 5,000 acres were considered as suitable for rice production. The government will prepare development projects and seek external assistance as soon as the results of the UNDP/FAO pilot project and the in- vestigation become available. UNDP assistance : US$654,500 Local currency contribution: US$466,755 (equivalent) 2. Transport System Survey A team of experts conducted an overall survey of transport systems in Fiji and presented the results of the economic and technical investigation of the existing network and the recommendations on the optimum pattern of transportation development program. Most of the work is complete and a preliminary report has been made. UNDP assistance : US$634,700 3, Development of Forests and of Forest Industries More than 80 percent of land is unsuitable for cultivation and the government requested UNDP assistance in carrying out feasibility studies on the development of forestry and related industry in an attempt to diver- sify the economic base of the country. The project has been executed by FAQ for the purpose of assisting the Government of Fiji in planning the rational utilization and expansion of forest resources, the development of forest industries, and the progressive marketing of forest products. Feasibility studies of a large scale afforestation program in cooperation with interested foreign companies has been also undertaken. UNDP assistance : US$238,400 Local currency contribution : US$200,000 (equivalent) -2- 4, Local Tuna Fishery The purpose of the project is to assist the government in carrying out a feasibility study for the development of a local tuna fishery. The project was approved in June 1970 and early implementation is expected. There already exists a commercial fishing operation based at Levuka, adjacent to the main island of Viti Levu. The base provides freezing and cold stor- age facilities for a deep-sea fishing fleet mostly manned by Asians. The project will attempt to explore new fishing techniques so that Fijians may be brought into the exploitation of the apparently abundant resources off :tphe islands of Fiji. UNDP assistance : US$450,000 Local currency contribution : US$200,000 (equivalent) 5. Development of Resource-based Manufacturing Industries The development of manufacturing industries in Fiji has been some- what handicapped by the small size of the market in addition to factors common to most of the developing countries. The project sponsored by UNDP is to make a feasibility study of developing manufacturing on the basis of available indigenous resources. A total of eight experts from the United Nations Industrial Organization (UNIDO) will be exploring the possibilities of using sugar cane waste and molasses from the sugar industry for possible production of bagasse board or distillation of rums; the effective utiliza- tion of goat skins and cattle hides, coconut fibers; and fruit-juice and vegetable processing. Most of these will, if proved commercially feasible, contribute to increased employment, import substitutes and export creation. 6. Hydro-electric Power Resource Development Study The government is preparing a request for UNDP assistance in 4arrying out a feasibility study on the construction of a water power plant at the Monasavu Falls, located in the upper reaches of the Rewa River. The ,site tentatively identified for a further study was one of the several pro- mising locations available on the island of Viti Levu. NýSTHIKOMBIA - ROTUMA . r _ J°J12°40 bòsò RAMBI.. 1U- Sovusavv N <, TVEUNI17 o'VANUA CZ aKORO MBALAVU . Vatoa Wharf Ilington Wharf VAMANUTHA OVALAU K 0 R 0 GROUP ,, evuko ) I seSu NIGAU S1 okoav dKbroivS A L AKEMBACý Navua . C3MBENGGA QVATULELE qMOALA 0 C ýTOTOYA O i. KANDAV ---- ROADS 0AIR ROUTES an Angeles ELEVATIONS OVER 1000 FEET GIlbert Is. UsA d JET AIRPORT G~omea Howel AIRPORT so mn ciMONO-1-LAU AAIRSTRIP Ne. PORT OF ENTRY Hjebnides % Somo H.ýr,desOTHER PORTS AUSTRALIA Coiedn . ,ø FIJI 'T.hM.i 21°20 Tongo 7Ck i. sm Sydney Nautical Mil., ZEW0 ZEALAND not 10 ,le AUGUST 1970 IBRD 3126 STATISTICAL APPENDIX A. Population 1.1 Growth of Population 1.2 Population by Racial Groups 1.3 Distribution of Wage Earners by ISIC Group 1965-1969 1.4 Estimated Active Manpower 1968 B. National Accounts 2.1 GNP at Current Prices, by Type of Expenditure 2.2 GNP at Constant Prices, by Type of Expenditure 2.3 GDP at Current Prices, by Kind of Economic Activity C. External Trade & Payments 3.1 Composition of Exports by Major Commodities 3.2 Volume and Value of Principal Exports 3.3 Composition of Imports 3.4 Retained Imports by Economic Use 3.5 Direction of Trade 3.6 Trade with South Pacific Territories 3.7 Balance of Payments D. External Debt 4.1 External Public Debt Outstanding 4.2 Estimated Future Service Payments on External Public Debt E. Public Finance 5.1 Government Current Revenue 5.2 Government Current Expenditure 5.3 Central Government Capital Account 5.4 Central Government Capital Formation by Service F. Money & Credit 6.1 Money Supply and Related Factors 6.2 Operations of the Banking System 6.3 Assets and Liabilities of Commercial Banks 6.4 Assets and Liabilities of Savings Banks 6.5 Foreign Asstes of Government, Public Institutions and Commercial Banks G. Agriculture 7.1 Gross Volume and Value of Agricultural Commodities 7.2 Area Under Principal Crops 1968 7.3 Fiji - Sugar Cane Acreage, Production, Exports, Values 7.4 Production and Use of Copra -2- H. Industry 8.1 Employment and Production of Mining Sector 1968 8.2 Employment and Production of Manufacturing Industries 1968 8.3 Tourist Arrivals I. Wages & Prices 9.1 Price and Wage Indices Table 1.; Growth of Population a/ c/ c Year Population - Crude Birth Rate Crude Death Rate c Rate of Natural Increase - (thousands) Total Vllanesian Indian Total vblanesian Indian Total Melanesian Indian 1953 316.7 41.4 - - 9.4 - - 32.0 - - 1954 328.3 40.2 - - 9.5 - - 30.8 - - 1955 339.8 38.6 - - 8.2 - - 30.4 - - 1956 351.5b/ 40.0 - - 7.4 - - 32.7 - - 1957 354.2- 41.9 39.3 45.6 7.5 8.7 6.h 34.4 31.1 40.0 1958 367.7 40.3 35.9 45.2 7.0 7.7 6.7 33.3 28.2 38.6 1959 381.0 41.8 36.4 46.5 7.6 7.7 7.7 34.2 28.8 38.8 1960 394.3 40.0 37.4 43.7 6.7 7.2 6.5 33.2 30.2 37.2 1961 407.4 40.9 37.4 45.5 6.4 7.1 6.2 34.4 30.4 39.3 1962 420.9 39.6 37.8 42.6 6.3 7.5 5.5 33.3 30.4 37.2 1963 434.5 38.0 37.8 40.2 5.8 6.4 5.4 32.2 31.4 34.8 1964 449.2 37.8 37.4 39.8 6.1 6.8 5.6 31.8 30.6 34.2 1965 460.6 35.9 36.2 37.3 5.1 5.5 5.1 30.8 30.7 32.2 1966 471.9 34.9 36.9 34.6 5.2 5.0 5.4 29.7 31.9 29.2 1967 486.o 34.4 37.0 32.6 5.1 5.2 5.0 29.4 31.8 27.6 1968 500.3 30.2 32.1 29.8 5.2 5.5 5.1 25.0 26.6 24.7 1969 513.9 29.0 27.0 31.9 4.6 4.7 4.8 24.3 22.3 27.2 1970 526.5 a/ Mid-year population estimate by the mission from data supplied by the Bureau of Statistics. b/ Following the 1956 Census of Population, the population estimate for 1957 was adjusted for under- registration of deaths during the earlier years. c/ Per 1,000 of population on January 1. d/ Preliminary estimate Source: Registrar-General's Annual Reports and Bureau of Statistics Table 1.2 Population by Racial Groups End of Population (000) Index 921 = 100 Percentage Composition Year Melanesian Indian Other Total blanesian Indian Other Total Pblanesian Indian Other 1881 115 - 12 127 136 - 104 81 90.0 - 10.0 1891 106 7 8 121 125 12 65 77 87.3 6.2 6.5 1901 94 17 9 120 112 28 71 76 78.6 14.2 7.2 1911 87 40 12 139 103 66 100 89 62.4 28.9 8.7 1921 84 61 12 157 100 100 100 100 53.7 38.6 7.7 1936 98 85 15 198 116 140 129 126 49.2 42.9 7.9 1946 117 120 23 260 139 198 181 165 45.3 46.2 8.5 1956 148 169 29 3,46 175 279 232 220 42.9 49.0 8.2 1966 203 242 34 479 242 397 283 305 42.3 50.5 7.1 1967 209 250 38 497 249 410 317 317 42.1 50.3 7.6 1968 215 256 41 512 256 420 342 326 42.0 50.0 8.0 1969 218 260 43 527 262 431 367 336 41.7 49.9 8.4 Source: Bureau of Statistics Table 1.3 Distribution of Wage Earners by ISIC Group 1965-1969 ISIC Group 1965 1966 1967 126 1969 (1) (2) (3) (4) (5) (6) 1 Agriculture Forestry & Fishing 3,167 3,256 3,238 3,750 3,931 2 ining & Quarrying 1,757 1,792 1,852 1,798 1,755 3 Manufacturing 7,363 7,922 8,478 9,191 9,556 4 Electricity, Gas & Water 626 592 642 753 916 5 Construction 6,267 6,195 6,772 7,070 7,452 6 Com!vrce 3,176 3,146 3,761 3,879 6,)441* 7 Transpo rt, Storage & Communication 2,490 2,385 2,421 2,814 2,900 Services 3,871 3,234 3,504 4,013 3,h16+ Activities Not Adequately Described 28 - - - TOTAL 28,745 28,522 30,698 33,268 36,367 Note.' In 1969 the workers in restaurants and hotels were classified under commerce. Previously they were classified under services. Workers in Banks and Financial institutions are classified under services. In previous years they were classified under Commerce. Source: Bureau of Statistics Table 1.4 Estimated Active Manpower 1968 Regular Wage and Salary Family and Private Public Own Account Seetor Sector Workers Totals Agriculture, Forestry - - 27,000 27,000 and Fishing Mainly subsistence - - - Mainly cash 2,700 1,300 44,000 48,000 Mining and Quarrying 1,900 100 200 2,200 Manufacturing and 9,400 1,600 100 11,100 Processing Construction 4,200 3,100 900 8,200 Electricity and 500 300 10 00 Water Transport and 3,600 1,000 2,000 6,600 Communication Commerce 7,700 100 2,800 10,600 Government Services - 10,600 - 10,600 Tourism ) Other Services ) 3,S00 - 3,300 1,100 Undefined n.a. n.a. n.a. 700 Unemployed n.a. n.a. n.a. 8t0OO Total Labor Force 33.oo 18100 00 140.600 Note: Because of uncertainties in estimating unemployment and the numbers in the agricultural sector, this table allows for an error of plus or minus 2,000 in Family and Own Account Workers category. Source: Central Planning Organization Table 2.1 Gross Jitional Product at Current Prices, by Type of Txpenditure (FS million) 196" 1966 1967 1968 1969 1970 Private Consumption Expenditure Rural household 14.8 15.3 15.7 16.2 16.8 17.6 Other 81.5 80.0 85.0 92.4 100.7 110.0 Government Consumption Expenditure 15.7 17.2 18.5 19.4 21.3 23.6 Gross Fixed Capital Formation Private 15.5 1.5 21.5 28.9 32.7 37.6 Public 7.3 8.7 7.9 10.1 11.3 12.9 Increase in Stocks + 2.0 + 6.0 + 1.8 + 2.0 + 1.5 + 1.9 Exports of Goods and Services 5h.5 52.4 58.7 70.3 80.4 88.3 Less Imports of Goods and Services - 63.2 - 57.2 - 61.7 - 75.0 - 85.2 - 97.1 Statistical Discrepancy + 4.6 - 1.L + 1.0 - - - Expenditure on GDP 132.7 135.4 148.4 16h.3 179.5 194.8 Net Factor Income from Abroad - 5.2 - 3.3 - 5.2 - 6.0 - 6.5 - 7.1 Expenditure on GNP 127.5 132.1 143.2 158.3 173.0 187.7 Less Indirect Taxes - 13.0 - 11.9 - - 15.1 - 16.6 - 17.9 Plus Subsidies 0.9 1.0 0.8 0.7 0.7 0.7 Less Provision for Capital Consumption - 8.7 - 9.1 - 9.5 -10.0 - 10.8 - 11.8 National Income 106.7 112.1 120.2 133.6 146.3 158.7 a/ Preliminary Source: Bureau of Statistics Central Planning Office Table 2.2 Gross National Product at Constant Prices, by Type of Exoenditure (F$ million, 1965 Prices) a/ 1965 1966 1967 1968 1969 1970 Private Consumption Expenditure Rural household 14.8 15.2 14.9 15.3 15.1 15.2 Other 81.5 79.5 83.6 87.3 90.6 95.1 Government Consumption Expenditure 15.7 17.0 17.8 18.1 18.9 20.2 Gross Fixed Capital Formation Private 15.5 13.6 19.7 26.2 28.8 32.4 Public 7.3 8.5 7.8 9.7 10.5 11.7 Increase in Stocks 2.0 5.9 1.7 .1.9 1.3 1.6 Export of Goods and Services Sh.5 50.0 62.1 71.1 73.6 78.5 Less Imports of Goods and Services - 63.2 - 56.0 - 58.6 - 69.2 - 77.0 - 85.8 Statistical Discrepancy 4.6 - 1.4 + 1.0 - - - Expenditure on GDP 132.7 132.3 150.0 160.4 161.8 168.9 Net Factor Income from Abroad - 5.2 - 3.2 - 5.3 - 5.9 - 5.9 - 6.2 IApenditure on GNP 127.5 129.1 144.7 154.5 155.9 162.7 Less Indirect Taxes - 13.0 - 11.7 - 13.8 - 14.h - 14.8 - 15.4 Plus Subsidies 0.9 1.0 0.8 0.7 0.6 0.6 Less Provision for Capital Consumption 8.7 8.9 9.6 9.8 9.7 10.2 National Income 106.7 109.5 122.1 131.0 132.0 137.7 a/ Preliminary Source: Central Planning Office Table 2.3 Gross Domestic Product at Current Prices, by Kind of Fconomic Activity (F3 million) a/ 1965 1966 1967 1968 1969 1970 Agriculture, Forestry and Fishing Cash 24.1 22.9 22.2 26.1 27.7 29.1 Rural household 16.0 16.6 17.2 17.8 18.5 19.1 Mining and Quarrying 2.2 2.0 2.4 2.6 2.6 2.6 Manufacturing 14.9 15.0 16.6 17.6 18.8 19.3 Electricity and Water 1.5 1.6 1.5 1.7 1.8 2.0 Construction 6.5 7.4 9.6 12.0 13.6 15.5 Trade 19.9 19.1 20.7 22.3 24.6 26.6 Transport and Communication 6.8 8.0 9.6 11.2 13.1 15.1 Finance 1.3 1.4 1.3 1.4 1.5 1.6 Real Estate and Property Ownership 12.3 14.0 15.6 17.0 19.0 21.0 Private Services, n.e.s. 6.5 7.1 8.1 9.3 10.8 12.8 Government Services 8.4 9.5 10.2 10.6 11.6 12.9 Gross Domestic Product, at factor cost 120.5 124.8 135.0 149.6 163.6 177.6 a/ Preliminary Source: Bureau of Statistics Central Planning Office  Table 3.1 Composition of Exports by Major Commodities 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Values f.o.b. (F$ million) Sugar products 17.53 12.11 17.14 29.24 36.02 25.31 22.17 24.18 25.25 28.72 Coconut products 4.79 5.16 4.06 4.86 5.88 4.89 3.45 3.30 5.13 4.54 Gold 2.01 2.40 2.38 3.12 3.77 3.09 3.03 3.15 3.45 3.36 Bananas 0.41 0.48 0.35 0.49 0.30 0.14 0.32 0.14 0.35 0.29 Other 0.82 0.76 1.06 1.08 1.26 2.20 3..28 4.15 5.74 6.64 Total Domestic Exports 25.56 20.91 24.99 38.78 46.24 35.61 32.25 34.92 39.92 43.55 Re-Exports 5.47 5.38 6.51 5.55 5.99 6.88 6.66 7.75 9.87 9.68 Total Exports 31.03 26.25 31.49 44.33 52.23 42.50 38.91 42.66 49.12 53.23 Percentage Composition of Domestic Exports Sugar products 68.6 58.1 68.6 75.4 77.9 71.0 68.8 69.2 63.3 65.9 Coconut products 18.8 24.7 16.3 12.6 12.7 13.7 10.7 9.5 12.9 10.4 Gold 7.8 11.5 9.5 8.0 6.0 8.7 9.4 9.0 8.6 7.7 Bananas 1.6 2.3 1.4 1.3 0.7 0.4 1.0 0.4 0.9 0.7 Other 3.2 3.4 4.2 2.7 2.7 6.2 10.1 11.9 24.7 22.2 Source: Bureau of Statistics Table 3.2 Volume and Value of Principal Exports (Values in 1000 F $) 1968 Unit 1964 1965 1966 1967 (Revised Estimates) 1. Live animals, chiefly number 6,311 4,815 17,569 10,878 14,259 for food Value 1.68 1.34 5.60 15.15 9.59 2. Meat and Meat prepara- lbs. 15,160 3,022 8,658 27,194 104,853 tions Value 5.53 0.96 4.11 11.03 38.18 3. Fish and fish prepara- '000 lbs. 1,776 8,095 13,462 13,161 12,200 tions Value 170.40 821.23 1,535.79 2,094,47 1,872.54 4. Bakery products '000 lbs. 1,815 1,593 1,336 1,227 1,446 Value 197.34 173.64 146.26 136.05 161.23 5. Bananas and plantains '000 lbs. 123 51 116 48 107 Value 299.51 135.48 323.31 135.09 353.51 6. Vegetables, fresh, '000 cases 2,065 508 652 879 1,498 dry, or preserved Value 57.04 21.58 21.50 33.48 57.22 7. Unrefined sugar '000 tons 311 305 239 318 341 Value 35,661.43 24,984.17 21,747.89 23,779.98 24,855.99 8. Inedible molasues '000 tons 73 65 85 81 79 Value 363.17 324.99 425.33 404.58 395.49 9. Other sugar products '000 tons 6 4 5 6 6 Value 0.82 0.67 1.18 1.17 1.06 10. Tobacco, unmanufactured lbs. 90 149 3,676 346,161 368,117 Value 0.06 0.14 2.61 187.76 174.64 11. Tobacco manufactures '000 lbs. 24 40 62 93 128 Value 36.31 60.17 94.62 140.75 190.04 12. Copra tons 6,934 6,370 2,098 1,756 - Value 931.15 990.87 275.68 221.31 - 13. -Coconut oil tons 22,819 14,775 14,469 14,160 17,165 Value 4,547.53 3,635.67 2,879.61 2,852.45 4,758.54 14. Manganese ore and tons 761 4,809 5,089 4,360 10,845 concentrates Value 18.87 184.97 152.86 138.83 233.28 15. Paints, enamels, gals. 1,431 2,005 7,055 24,087 25,961 lacquers and varnishes Value 4.68 6.79 23.44 93.84 100.69 16. Footwear pairs 4,886 5,424 4,448 16,524 16,44o Value 7.30 8.06 7.42 13.12 13.79 17. Unrefined gold '000 fine oz. 100 112 110 113 107 Value 2,771.49 3,088.99 3,029.97 3,147.00 3,451.73 18. All others Value 1,167.38 1,172.03 1,576.79 1,511.16 2,578.76 Total domestic export Value 46,241.69 35.611.75 32.253.97 34,917.22 39,246.28 Note: Figures have been rounded. Source: Bureau of Statistics, Trade Report 1968 Table 3.3 Composition of Imports 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Food, beverages & tobaccoa/ 8.43 8.43 8.63 9.75 12.39 14.43 13.74 14.39 15.53 17.82 Raw materials 1.02 0.67 0.66 0.49 1.09 1.37 0.60 0.65 0.89 0.67 Fuels, lubricants etc. 4.22 4.18 4.48 4.38 5.64 5.68 5.45 6.20 7.33 8.38 Chemicals 1.58 2.28 2.57 2.88 4.15 4.57 3.83 3.93 4.99 5.11 achinery & transport equipment 5.40 6.39 7.03 8.88 14.03 13.01 9.97 12.13 15.17 16.76 Other manufactured goods 11.50 11.93 10.89 13.53 17.33 18.37 16.00 18.37 23.25 26.87 Other 0.68 0.58 0.51 0.50 0.64 0.73 0.96 0.62 1.24 2.27 Total Imports 32.81 34.46 34.77 40.41 55.25 58.16 50.55 56.29 68.40 77.88 Percentage Composition of Imports Food, beverages & tobacco 25.7 24.5 24.8 24.1 22.4 24.8 27.2 25.6 22.7 22.9 Raw materials 3.1 1.9 1.9 1.2 2.0 2.3 1.2 12. 1.3 0.8 Fuels, lubricants etc. 12.8 12.2 12.9 10.8 10.2 9.8 10.8 11.0 10.7 10.8 Chemicals 4.8 6.2 7.2 7.0 7.3 7.9 7.6 7.0 7.3 6.6 Machinery & transport 16.4 18.5 20.2 22.0 25.4 22.4 19.7 21.5 22.2 21.5 equipment Other manufactured goods 35.1 34.6 31.3 33.4 31.3 31.6 31.6 32.6 34.0 34.5 Other 2.1 1.7 1.5 1.4 1.2 1.9 1.1 1.8 2.9 Source: Bureau of Statistics Table 3.4 Rctained Imports by Economic Use (F$ million) 1963 1964 1965 1966 1967 1968 1969 Food, Beverages & Tobacco 9.5 -1.4 12.6 10.6 12.1 12.6 14.2 Non-food Consumer Goods 8.7 10.2 10.0 9.4 11.2 13.4 15.2 Intermediate Goods 5.5 7.9 8.0 7.2 6.7 8.6 10.7 Investment Goods 10.4 16.9 17.9 13.1 14.7 18.5 21.1 (Percentage Composition) Food, Beverages & Tobacco 27.8 24.6 26.0 26.3 27.0 23.8 23.2 Non-food Consumer Goods 25.5 22.0 20.7 23.3 25.1 25.2 24.8 Intermediate Goods 16.2 17.1 16.5 17.9 15.0 16.2 17.5 Investment Goods 30.6 36.4 36.9 32.5 32.9 34.9 34.5 Source: Bureau of Statistics Table 3.5 Direction of Trade (F$ million) 1963 1964 1965 1966 1967 1968 1969 Total Inports (c.i.f.) 40.41 55.25 58.16 50.55 56.27 68.h0 77.89 Australia 11.55 15.98 16.59 Th.00 15.31 19.95 19.70 United Kingdom 9.47 11.89 13.17 10.36 9.66 14.56 154.6 Japan 4.08 7.49 7.19 7.23 8.63 8.75 11.06 New Zealand 2.85 3.83 4.56 3.96 4.43 6.43 7.26 U.S.A. 1.33 1.98 2.23 2.77 3.21 3.47 3.69 Malaysia/Singapore 1.15 1. 37 1.20 1.97 2.61 2.20 2.91 Other 9.98 12.71 13.22 10.26 12.42 13.0 17.81 Total Exports (f.o.b.) 44.34 52.22 42.50 38.87 42.66 49.12 53.23 United Kingdom 18.60 20.00 17.65 17.61 17.51 18.55 18.h2 U.S.A. 5.13 4.54 5.14 5.12 6.09 6.67 8.36 Australia 3.88 3.72 4.10 4.52 5.24 5.47 5.48 Canada 6.82 5.88 3.70 2.38 2.50 3.10 4.94 New Zealand 1.17 6.82 2.69 1.31 2.20 2.53 2.92 Tonga/W.Samoa 1.38 1.40 1.22 1.16 1.58 1.82 2.00 Other 7.36 9.86 7.98 6.78 7.54 10.98 11.11 Source: Bureau of Statistics Table 3.6 Trade with South Pacific Territories (F dollars) Origin and 1967 1968 1969 Destination Exports imports Exports Imports Exports Imports Cook Islands 85,512 376 140,234 1,574 177,658 1,786 Gilbert & Ellice Is. 470,046 26,544 472,070 314 486,322 1,185 NiU 145,372 466 117,892 548 129,029 1,151 Tonga 989,290 6,646 1,077,424 7,366 1,089,092 10,390 Western Samoa 592,946 3,774 736,120 8,184 907,795 6,025 American Samoa 606,810 7,860 739,728 6,910 646,619 14,275 Futuna & Wallis Is. 280,158 134 405,530 70 307,274 - New Caledonia 68,632 616 116,270 182 123,510 - New Hebrides 216,254 806 336,252 136 270,833 305 Tahiti 16,324 12 78,362 - 94,230 - Others 136,574 5,510 57,806 11,940 147,781 24,267 Total 3,407,918 52,744 4,277,688 37,224 4,380,143 59,384 Source: Bureau of Statistics Table .3.7 BALANCE OF PAYMENTS (F$ Million) 1965 1966 1967 1968 1969 a/ G'0)0 AND SERVICES Receipts Exports f.o.b. 35.1 31.7 34.9 39.9 43.8 Non-monetary Gold 3.1 3.0 3.1 3.5 3.4 Transportation and Insurance 7.0 6.8 7.2 9.2 9.9 Travel 7.5 8.6 11.1 15.6 20.9 Investment Income 1.4 1.7 1.1 1.5 1.5 Government Services 1.2 1.2 0.9 1.0 1.1 Other Services, n.e.o. 0.7 1.0 1.3 1.1. 1.3 Total Merchandise Exports 38.2 34.7 38.0 43.4 47.2 Total Service Exports TFU~ ____ 717 ____ T_77 Payments Imports, f.o.b. 47.2 39.7 45.7 55.4 63.1 Non-monetary Gold ---- Travel 1.1 2.2 1.4 1.6 1.7 Investment Income 6.6 5.0 6.3 7.5 8.0 Government Service 0.3 0.3 0.4 0.L 0.5 Other Services 1.4 1.8 1.4 1.3 1.6 Total Merchandize Imports 47.2 39.7 45.7 55.4 63.1 Total Service Imports 7M _f 219 Net Goods and Services Trade Balance -9.1 -5.0 -7.6 -12.1 -15.9 Net Services __8 TRANSFER PAY[MENTS Private -0.8 -0.1 -0.5 -0.7 -0.9 Central Government 3.2 2.9 2.1 4.9 3.8 Net Transfer Payments 2.4 2.8 1.7 4.2 2.9 CURRENT BAIANCE -11.5 -5.3 -6.5 -6.4 -8.4 m...-=--.. m.m.. m.... m.. emmm.m.m.m... m.... eme.... m.. m mm...m..m.m...e.m mm..e..m.....mmm.m.a....me.........=......a CAPITAL MOVEMENT Net Private Long-Term 1.6 0.9 1.2 1.4 1.6 Net Balance Due from Bank Abroad -1.2 0.9 1.2 - - Net Change in Government Enterprises -1.2 0.8 -1.5 -0.8 Net Change in Foreign Assets of Government +5.2 0.9 1.0 -0.2 0.9 Enterprises Unidentified Capital Inflow and 7.2 1.8 3.6 5.9 5.9 Errors and Omissions mmm-mmmmmm-mmmmmmem-m-mm-e-ememmmmme-mmememe-m--mm--emmm-mmew-m-mm---m-mme-m-mm-m-m-mm---m-m-m-se-me--e---mm-emm-mmemmm--m- a/ Missions es0tiates, based on pre1idUnary data supplied by the Central Planning Office Source: Bureau of Statistics Central Planning Office  REVISED Table 4.1 FIJI - EXTERNAL PUBLIC DEBT OUTSTANDING AS OF DECEMBER 31, 1969/1 Debt Repayable in Foreign Currency (In thousands of U.S. dollars) Debt Outstanding SourceDecember 31, 1969 SouceDisbursed Including oniZ undisbursed TOTAL EXTERNAL PUBLIC DEBT 10,205 10,205 Privately held debt/2 3,574 3 574 Publicly issued bonds Privately placed bonds 1,718 1,718 Loans from governments 6,631 6,631 Nauru 2,520 2,520 United Kingdom Out1 t nding /1 Debt with an original or extended maturity of over one year. T2 Net of accumulated sinking funds of $663,000. There is also a supplementary sinking fund ($247,000), the proceeds of which will be used. to retire the bonds. Statistical Services Division Economics Department August 27, 1970  REVISED Table 4.2 FIJI - ESTIMATED FUTURE SERVICE PAYMETES ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1969 Debt Repayable in Foreign Ciirrency (In thousands of U.S. dollars) Page 1 of L DEsT OITST (REGIN OF PERIOM)) PAYljENTS DUqING PERIOD INCLUOING A ORTI- yEAR UNDISBURSED 7,ATION INTEREST TOTA TOTAL E'NTERMAL PUBLIc DEBT 1970 10,205 424 747 1171 1971 9#755 253 716 969 1972 9,483 262 707 C.69 1973 9,193 272 697 A9 1974 8,881 282 687 969 1975 8,547 293 676 969 1976 8,189 3n4 665 96o 1977 7805 317 652 969 1978 7,393 33 639 969 1979 6s952 344 625 69 198n 6P479 J139 544 1,933 1981 4s967 1s390 394 1,7a4 1982 3,491 1,i9 218 2P13A 1983 i,638 290 109 329 1984 19348 310 90 399 Note: Includes service on all debt listed in Table 1 prepared August 27, 1970 REVISED 'able 4. 2 FIJI - ESTIMATED FUTURE SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANvDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1969 Debt Repayable in Foreign Currency (In thousands of U.S. dollars) Page 2 of 4 DEQT O'JTST (BEGIN OF PERI00) PAY!4ENTS DURING PERIOD INCLUDING A iORTI.3 YEAR UNDISBURSED 7ATION INTEREST TOTAL PRVATELY-HELD DEBT 1970 3D574 248 291 539 1971 3o300 69 268 337 1972 3P218 69 268 337 1973 3po29 69 268 337 1974 3P 33 69 268 337 1975 2o93) 69 268 337 1976 2o818 69 268 337 1977 2P698 69 268 337 1978 2P568 69 268 337 1979 2P428 69 268 337 1980 2o277 19100 201 tD30i 1981 o109 1P-184 67 1I152 PUBLTCL'VISSjE1) PONDS 1970 IpA56 213 157 37P 1971 1o619 34 133 167 1972 10577 34 J33 167 j973 jp531' 34 133 167 j974 to481 34 133 167 1975 427 34 133 167 1976 1370 34 133 1A7 1977 Io307 34 133 167 1976 1P24# 34 j33 167- 1979 1D16 34 133 167 1980 19089 1065 66 1131 REVISED Table 4.2 FIJI - ESTIMATED FUTTRE SERVICE PAYMENTS ON EXTERNAL PULI', DEBT OUTSTAMDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1969 Debt Repayable in Foreign Currency (In thousands of U.S. dollars) Page 3 of 4 FPT 0JTsT (REGIN OF PERIOP) PAymENTS DURING PERIOD INCLUoING A,1RTI- yEAR UNDISeURSEn> 7PTION INTEREST TOTAL PRIVATELY«-ELD DEBT PRIkATELY PLACEn BONIS 1970 1,718 35 135 1.61 1971 1,661 35 135 169 1972 1,642 35 135 169 1973 1,599 35 135 i69 1974 1,552 35 135 169 1975 1,503 35 135 169 1976 1,449 35 95 160 1977 1, 391 35 135 ¶6' 1978 1,328 35 135 1979 1,260 35 135 169 1980 1,187 35 135 169 19c1 1i 109 1,084 67 1,152 LOANS F'ni GW !E-NMENTS 1970 6, 6 31 176 456 639 1971 6,154 1j4 448 63,> 1972 6, 265 193 439 639 1973 6,63 203 430 63P 1974 5,847 213 419 63? 1975 5, 617 224 409 631 1976 5,37n 235 397 631 1977 ·5p l1(7 248 385 6 )32 1978 4,825 261 372 63 1979 4,5?4 275 358 639 19p1 4,-22 29D 343 632 1981 3,859 3n6 327 639 19t2 3,91 1,qi9 218 2,033 1983 1,63. 29 109 19 1984 1,34,8 31J 90 gaa REVISED Table 4. 2 FIJI - ESTIMATED FUTURE SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1969 Debt Repayable in Foreign Currency (In thousands of U.S. dollars) Page of 4 DERT OITST (qEGIN OF PERIOD, PAYMENTS DUPING PERIO0 INCLU)ING A, 0RTI yEAR UNDIS,URSED 7ATION INTEREST TOTAL LOANS FnO'10 GOvEN'iENiTS NAURU 1970 2,P520 50 183 233 1971 2P469 50 183 233 1972 2p414 50 183 233 1973 2o354 5o 183 233 1974 2P291 50 183 233 1975 2o223 50 183 233 1976 2D149 50 183 233 1977 2o!71 50 183 233 1978 1p986 50 183 233 1979 1596 50 183 233 1980 ID798 50 183 233 1961 1o694 50 183 233 1982 1581 Io547 91 ----- UNITED 'INGOD 1970 4plil 126 274 399 1971 134 265 399 1972 3043 256 39 1973 3P709 152 247 394 1971 3D557 162 237 399 1953P394 173 226 39Q 1976 3,!185 2t4 399 1977 3136 197 202 39P 19Z8 2P839 21-3 189 390 1979 2P629 224 175 399 19 -f 2p4O4 239 160 39e) 19al21J6 255 144 399 19,;2 IP910 272 127 390 1 9353 ijo A3.8 2 q;, 1)9.3) 19-1 1004 310 90 3-19 Statistical Services Division Economics Department August 27, 197.0 Table 5.1 Government Current Revenue (F$'OOO) Year Customs Duties and Income and Other Interest Income from Total Port Dues Direct Taxes Property Revenue 1960 7,514 (50.) 4,318 (29.1) 151 (1.0) 2,839 (19.2) 14,822 (100) 1961 7,964 (53.5) 3,748 (25.2) 145 (0.9) 3,034 (20.4) 14,891 ( " ) 1962 7,938 (49.1) 4,090 (25.3) 149 (0.9) 4,003 (24.7) 16,180 ( ) 1963 9,310 (50.1) 4,896 (26.3) 159 (0.9) 4,219 (22.7) 18,584 ( ) 1964 11,856 (49.4) 6,808 (28.4) 281 (1.2) 5,058 (21.0) 24,003 ( ) 1965 12,048 (47.9) 7,691 (30.6) 452 (1.8) 4,969 (19.7) 25,160 ( n ) 1966 10,878 (43.5) 8,168 (32.7) 494 (1.9) 5,467 (21.9) 25,007 ( " ) 1967 13,202 (46.5) 8,851 (31.2) 451 (1.6) 5,862 (20.7) 28,366 ( " ) 1968 14,869 (46.0) 9,774 (30.2) 496 (1.6) 7,186 (22.2) 32,325 ( " ) 1969 17,528 (45.6) 11,282 (30.0) 895 (2.4) 8,260 (22.0) 37,565 ( " ) 1970 (Estimates) 18,112 (49.2) 11,599 (31.5) 625 (1.7) 6,507 (17.6) 36,843 ( " ) Figures in brackets are percentages of total Source: Bureau of Statistics Table 5.2 Government Current Expenditure ($000) . Services 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 b 1970 Administrations .2 2 2,993 3,14 L 3 )&.22 5.482 ,2a g 9 General 458 451 467 54o 574 734 829 1,122 - - - Financial 642 675 785 722 768 895 1,050 1,432 - - - Justice, Police, 1,245 1,183 1,217 1,316 1,435 1,612 1,777 1,867 - - - Prisons and Defence Otier 489 512 523 569 596 667 865 1,081 - - - ]conaia Serviooo L 4 42LO JA2 4.869 5.280 6.618 Z 10,330. U157 Agriculture, Foro- 624 594 618 688 758 834 1,013 1,565 - - - try and Fiahorios Surveys 165 158 152 183 200 206 417 491 - - - Trade and Indcatrieo 182 199 215 231 250 269 310 370 - - - Poot and Teloca=mni- 681 538 634 664 784 846 970 1,099 - - - cations Transport 148 159 174 169 179 225 313 432 - - - other (uortcs annually 2,159 2,520 2,447 2,560 2,698 2,900 3,595 3,561 - - - recurrent) Social Serviceo 4.074 4.261 4.457 4.674 5 Lyk Lak& tL1 8.109 J 2a2S Education 2,171 2,310 2,407 2,53t 3,156 3,439 3,831 4,173 - - - Health 1,680 1,743 1,836 1,910 2,100 2,441 2,702 2,775 - - - Welfare 223 208 214 229 230 14 14 298 - - - Financial Cor=itmants 131-2 1.433 172 2.023 2 2,899 3.021 a L 4.027 -On Pensions and 654 674 722 645 997 1,009 1,039 1,083 - - - Gratuities Public Debt 659 759 1,005 1,318 1,868 1,890 1,983 2,160 - - - Miceollaneous 2.129 2141 2.669 2.883 3 LILO 4.462 L.78 3 2.749 2. Total 14,106 1!,825 16, 86 1L2 20,053 233 11 25 29.05 30,731 333797 3&§L7 Note: Small discrepancies in the totals are due to rounding errors. a/ Includes contribution to capital budget revenue b Revised estimates * Includes Agricultural Tribunal d/ Pacific Medical (nainly to do with nutrition and other j Approved ostinates regional services). Source: Bureau of Statistics Table 5.3 Central Government Capital Account (F$ '000) 1965 1966 1267 1968 1969 a/ (Preliminary) RECEIPTS Current Surplus 4,582 2,875 3,536 2,686 4,242 Government Capital, Transfers from Abroad 2,664 2,206 1,365 2,326 2,974 (C.D. & W. Receipts) Loan Recoveries 18 78 59 210 70 Loans (i External - - - 500 - (ii) Internal 2,762 2,267 2,449 4,022 4,114 Cther Capital Receipts 31 36 18 698 Total Receipts -L457 _ 9L762 12128 Changes in net deposits, advances, etc., additions or drawings from funds and reserves, and statistical discrepancy = addition, + " reduction) 6 +2,277 +848 +852 -1,177 Total 9,494 4 8,293 10,614 1951 PA Y MENTS Gross Fixed Capital Formation (i) Land improvement 911 882 770 1,159 n.a. (ii) Residential building 617 1,025 516 447 n.a. (iii) Other building 1,285 1,508 1,397 1,740 n.a. (iv) Construction and workers 1,108 1,567 1,479 2,074 n.a. (v) Transport equipment 386 415 293 551 n.a. (vi) Plant, machinery and equipment 765 __ 54_ 8 978 n.a. Total 5.71 6.3 503 697304 Loan 463 711 279 410 501 Redemption of Debt 2,038 1,228 2,313 774 794 Capital Transfers to Government Enterprise 1,112 1,250 1,048 1,966 2,002 Other Capital Payments and Transfers 46 1 1 1 0 601 Total Payments 9U13& 8,643 10601 Increase in Investments 364 37 360 350 Total 949973 8, 10.951 g/ Mission's estimates Source: Bureau of Statistics Table 5.4 Central Government Capital Formation by Service (F$'000) a/ a/ 1963 1964 1965 1966 1967 1968 1969 1970 SERVICE General administration 39 135 306 760 383 248 207 222 Justice, police & defence 221 186 323 176 227 404 441 472 Roads, bridges & waterways 2,591 726 1,503 1,326 939 1,783 1,738 2,330 Public health & water supply 2 1 - 6 4 5 8 9 Other community services 14 58 1 27 15 4 63 68 Education 329 203 279 354 581 988 811 1,220 Health 124 339 608 635 387 457 675 661 Housing 372 155 355 673 293 292 240 251 Special welfare services 4 20 14 67 46 53 320 343 Agriculture, forestry & fishing 492 361 1,186 1,160 906 1,419 1,610 1,730 Fuel & power - - - - 70 53 92 99 Transport & communications 46 214 219 177 72 114 138 148 Economic services, n.e.s. 4 258 48 59 1 14 17 18 Surveys & other services 141 95 321 374 541 555 442 289 Public works, n.e.s. 307 318 209 343 538 590 502 537 TOTAL 42686 32062 6 j0 6,72 a/ Mission's Estimates Source: Bureau of Statistics Table 6.1 Money Supply and Related Factors (F $ million) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Currency in circulation 8.79 8.89 8.03 8.98 11.38 9.72 9.54 10.11 9.96 11.64 Demand deposits 11.80 9.60 9.69 12.60 14.33 13.26 14.18 15.40 16.94 21.96 Total money supply 20.59 18.49 17.72 21.58 25.71 22.98 23.72 25.51 26.90 33.60 Deposits th commercial banks-7i 14.56 13.79 14.37 19.10 22.32 20.63 21.87 25.04 27.94 34.72 Loans and advances y commercial banks-' 7.79 8.19 7.52 6.86 7.35 7.52 9.95 10.39 13.87 15.11 Overseas balances of commercial banks 1.72 0.27 2.42 6.23 7.20 6.05 6.96 8.16 8.19 11.75 Advances as percentage of deposits 53 59 52 36 33 46 45 42 50 44 a/ As of December 31 b/ Excluding commercial savings banks Source: Bureau of Statistics Table 6.2 Operations of the Banking System (F $ million) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Deposits Commercial banks June 30 15.71 16.42 16.31 18.35 24.65 24.67 25.33 27.66 30.93 39.74 December 31 16.63 15.91 16.58 21.60 25.67 24.50 26.46 30.06 33.65 41.73 Post Office Savings Bank December 31 3.08 3.11 3.09 3.35 3.96 3.90 3.85 3.98 4.20 4.73 TOTAL December 31 19.71 19.02 19.67 24.95 29.63 28.40 30.31 34.04 37.85 46.46 Loans and Advances Commercial Banks June 30 7.76 7.64 8.00 7.64 7.07 10.24 9.74 10.72 13.44 15.10 December 31 7.77 8.23 7.65 7.52 8.14 9.52 9.95 10.39 13.87 15.11 (of which for Agriculture June 30 0.58 0.54 0.64 0.59 0.63 1.23 1.22 (1.19) (1.04) (0.89) and Dairying) December 31 0.54 0.56 0.72 0.75 1.01 1.35 1.26 (1.11) (1.07) (0.81) Development bank June 30 0.80 0.96 0.93 0.92 0.93 0.94 1.22 1.83 2.63 2.08 TOTAL June 30 8.56 8.60 8.93 8.56 8.00 11.18 10.96 12.55 16.07 17.18 a/ Including commercial savings banks deposits, after deduction of their deposits with commercial banks. Source: Bureau of Statistics Table 6.3 Assets and Liabilities of Commercial Banks a/ (F $ million) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 LIABILITIES Deposits 14.56 13.79 14.37 19.10 22.32 20.63 21.87 25.04 27.94 34.72 Bank abroad 0.34 0.85 0.97 1.00 0.96 0.65 0.58 0.69 0.04 0.39 Other 0.75 0.91 1.42 1.67 2.67 2.39 2.57 1.80 1.10 1.50 TOTAL 15.65 15.55 16.48 21.77 25.94 23.67 25.02 27.53 29.07 36.60 ASSETS Cash 1.06 2.35 1.77 1.72 3.89 1.87 1.49 2.07 1.92 2.34 Banks abroad 2.06 1.12 3.12 7.23 8.16 6.70 7.54 8.85 8.23 12.14 Loans and advances 7.79 8.19 7.52 6.86 7.35 9.52 9.95 10.39 13.87 15.11 Local investments 1.57 1.66 1.35 1.53 1.50 1.52 1.71 1.59 1.50 1.17 Other 2.17 2.23 2.72 4.43 5.03 4.06 4.34 4.63 3.56 5.84 TOTAL 15.65 15.55 16.48 21.77 25.94 23.67 25.02 27.53 29.07 36.60 Note: Totals may not agree due to rounding. a/ As of December 31 Source: Bureau of Statistics Table 6.4 Assets and Liabilities of Savings Banks a (F $ million) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 LIABILITIES Deposits 6.71 7.39 8.04 9.83 13.03 17.76 13.42 14.82 16.68 20.58 Other 0.02 0.04 0.03 0.05 0.05 0.13 0.24 0.24 0.31 0.39 TOTAL 6.73 7.43 8.07 9.88 13.08 12.81 13.54 15.05 16.99 20.97 ASSETS Deposits with commercial banks 1.62 2.16 2.73 3.97 5.73 4.99 4.98 5.81 6.68 8.84 Central government loans 1.05 1.69 1.69 2.56 3.81 4.28 4.57 5.05 4.49 6.40 Local government and statutory bodies 0.63 0.75 0.77 0.69 0.44 0.48 0.78 0.93 1.20 1.39 Overseas investments 2.81 2.17 2.37 2.22 2.64 2.49 2.52 2.28 2.43 2.40 Other 0.61 0.67 0.50 0.44 1.19 0.57 0.69 0.98 1.19 1.94 TOTAL 6.73 7.43 8.07 9.88 13.80 12.81 13.54 15.05 16.99 20.97 Note: Totals may not agree due to rounding. a/ Consolidated data of commercial savings banks and Post Office Savings Bank only. b/ Securities of the Post Office Savings Bank only. Source: Bureau of Statistics Table 6.5 Foreign Assets of Government, Public Institutions and Commercial Banks (F $ million) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Investments GovernmentM 10.13 9.92 9.98 9.87 12.17 12.75 12.69 12.04 12.70 n.a. Semi-governmental institutions 3.08 3.06 3.32 3.29 3.19 1.25 1.26 1.18 1.19 n.a. Post Office Savings Bank 2.15 2.17 2.37 2.22 2.64 2.49 2.52 2.28 2.43 n.a. TOTAL 15.36 15.15 15.67 15.38 18.00 16.49 16.47 15.50 16.32 n.a. Liquid Assets- Governmentb/ 0.88 0.82 0.84 4.94 9.99d/ 7.67 5.21 6.20 5.94 n.a. Semi-governmental institutions 2.73 3.24 3.74 2.79 2.48 2.34 2.08 1.61 1.77 n.a. Post Office Savings Bank - - - - - - - Commercial banks 1.72 0.27 2.42 6.23 7.20 6.05 6.96 8.16 8.19 11.75 TOTAL 5.33 4.33 7.00 13.96 19.67 16.06 14.25 15.97 15.90 a/ As of December 31 b/ Including currency backing 2/ Cash and call money 3/ Including exceptional deposit of $F1,000,000 by Currency Board Source: Central Planning Office  Table 7.1 Gross Volu7,e and V,luo of A ricultural Cormodities 1950 - 1969 Volume Unit 1958 1959 1960 961 1962 1963 196 1965 1966 1967 1968 1969 Sugar cane '000 tons 1,531 2,47 1,168 1,18 1,824 2,337 2,319 2,171 2,192 2,163 2,826 2,339 Copra '000 tons 30.3 28.9 31.6 31.7 39.5 41.2 1.2 30.0 25.4 24.4 27.7 33.1 Bananas '000 cases 149 7 201 202 150 196 123 51 122 L-5 102 90 (72 lbs) Rice tons, 8,000 4,600 8,200 9,100 11,200 11,000 9,000 6,000 9,00V 10,000 11,000 12,600 Beef tons, dressed wt. 1,995 2',076 2,098 2,137 2,12L 2,126 2,091 2,089 2,157 2, 490 3,007 3,517 Butterfat '000 lbs 600 672 700 66 L,90 681 6L0 7.2 793 637 573 900 Timber '000 cu.ft. rand 2,823 2,582 2,953 2,792 3,10 3,76 3,5LL 4,000 L,087 3,67L L,207 L,.00 Current Producer Prices (F$ '000) VFlue Sugar cane 8,550 ,3 12,750 22,903 1916,73 Copra 3,518 L,58L 3,82b 3,217 3,835 L,L-58 L,713 L,191 2,878 2,918 4,667 4,327- Eananas 326 170 UL2 U6 3Ut L66 300 136 3U6 128 238 291 Rice, Padi $20 253 1.51 56 672 605 195 300 5LO 700 1,120 1,008 Beef IJ-7 165 170 79 523 52 609 608 676 725 876 1,182 Butterfat 272 269 275 266 196 273 256 297 317 331. 319 360 Subtotal 5,083 LLI LL LL2 5,570 L 6,7 L5 720 7L. Tirber 1,011 922 1 1.7 IILL 1,575 2,113 12. 23 Total 122,397 13.5 19,66 30, 2p017 25,"f Source: Statistical Abstract, 1969 Current Economic Statistics, April 1970 Table 7.2 Area Under Principal Crops 1968 (Acres) Product Pure Mixed Total Sugar cane 130,461 881 131,342 Coconuts 153,020 25,549 178,568 Bananas 1,418 8,706 10,124 Root cropS 11,693 16,935 28,628 Piper species (Yaquona) 939 6,682 7,621 Rice 23,656 697 24,353 Grains 3,035 1,751 4,787 Yams 584 3,043 3,627 Cocoa 746 4,664 5,410 Tobacco 972 60 1,032 Fruits and vegetables 7,467 8,484 15,951 a/ Includes taro (dalo) and cassava. Source: 1968 Census of Agriculture Table 7.3 Fi-i - Sugar Cane Acreage, Production, Exports, Values 1 2959 16 1961 16 16 .1964 1965 l 1967 1968 1969 Harvested Acres 77 88 - 61 - 88 103 106 107 111 115 116 '000 ac Cane Production 1,531 2,447 1,168 1,148 1,824 2,337 2,319 2,171 2,192 2,163 2,826 2,339 '000 tons Yield cane/acre 19.9 27.8 - 18.8 - 26.6 22.5 20.5 20.5 19.5 24.6 20.2 tons Total Raw Sugar Production 203 250 160 162 261 305 332 327 315 310 374 310 '000 tons Percent Sugar from Cane 13.25% 10.21% 13.69% 14.11% 11.3 % 13.05% 14.31% 15.06% 14.37% 14.33% 13.23% 13.25% Sugar Imports - - - - 0.2 0.1 0.1 0.1 0.2 0.2 0.2 - '000 tons Sugar Stocks, end of year 22 76 4 6 46 62 52 43 83 43 36 8 '000 tons Exports (Raw Sugar) 179 180 216 146 206 270 323 316 254 330 360 316 '000 tons Domestic Consumption 14.1 15.0 13.1 15.1 15.1 18.4 19.7 20.4 20.2 20.6 21.5 21.8 '000 tons Consumption per capita 85.8 88.3 74.4 83.1 80.3 94.8 98.1 98.5 94.6 95.1 95.3 95.4 lbs. Exports (Molasses) 48 65 55 57 36 60 73 65 85 81 79 117 1000 tons Value Exports Molasses 15.5(84) 14.7(80) 17.4(80) 11.9(88) 17.0(84) 28.8(106) 35.7(116) 25.0(82) 21.1(92) 23.8(74) 24.9(73) 28.1(89) Total $ Million 0.1 0.1 0.1 0.2 0.2 0. 0.4 0.0 0. 0.6 Price paid to Growers 17.2 2.1 24 2 2_ $/ton/cane Number of Contracts 6.91 6.43 7.32 6.41 6.99 9.80 7.20 6.70 6.49 6.33 6.51 7.00 Total Value to Growers 14,825 15,753 13,875 13,948 13,921 13,924 14,100 14,798 15,519 15,609 15,596 15,596 $ million Value per Contract 10.58 15.73 8.55 7.36 12.75 22.90 16.70 14.55 14.23 13.69 18.40 16.37 $ 713 998 616 527 915 1,644 1,184 983 916 877 1,170 1,049 a/ Preliminary estimates Notes: Tons - 2240 lbs. Dollar - Fiji Sources: Ministry of Agriculture Annuals International Sugar Organization Year Book Bureau of Statistics, Suva Table 7.L CaprG jeliveris Ccprai 1r e Ex:pLr Crushe: al ard ake YCa ( iousand ton) ( er ton) a s sCor I1ocalIr Eer, - n L_ 1960 31.6 2. 31.6 18.0 1961 34.7 97.50 h.9 3h.7 21.2 1962 39.5 93.82 7.0 32.5 18.2 7.7 1963 h1.2 108.30 6.0 35.3 20.1 7.8 196h 4l.2 11-.22 7.1 3h.1 22.8 9.5 1965 30.0 139.8h 6.2 23. 16.8 5. 1966 25.6 110.61 2.3 23.1 16.7 5.5 1967 26.6 119.32 1.8 23.1 16.2 5.0 1968 27.7 158.32 - 27.7 17.2 7.6 1969 33.1 130.76 1.6 31.5 17.1 8.1 a/ Suva basic price. b/ Due to shrinkage and carryovers, exports of copra and ainouts crushed locally may not add up to deliveries. Source: Bureau of Statistics. Table 8.1 Employment and Production of Mining Sector 1968 Mining Quarrying Total Number of establishments 5 11 16 Total employees 1,857 225 2,082 Total wages and salaries 2,073 139 2,212 (F $ '000) Gross output (F $ 1000) 4,764 425 5,189 Net Output 2,997 153 3,150 Source: Bureau of Statistics' Census of Industries Table 8.2 Employment and Production of Manufacturing Industries - 1968 Number of Number of Wages and Gross Net Establishments Employees Salaries Paid Dutput Utput UNITS F ' 000 Food processing 58 4989 3,880 45,553 12,423 Beverages and tobacco 14 405 248 4,163 1,290 Textiles, clothing and sportwear 34 353 106 497 189 Wood products 112 1550 865 3,182 1,313 Paper and printing 21 489 352 1,295 554 Chemical (paints, soap and cleaning preparations) 6 212 123 1,729 760 Rubber and plastic products 6 93 39 170 46 Non-metallic minerals (cement) 11 285 246 1,986 818 Furniture and metal products 20 358 243 1,264 457 achinery 18 414 390 1,786 665 Transport equipment 8 156 153 548 191 Manufacturing, n.e.s. 2 102 54 128 93 TOTAL 310 9406 6,702 62,301 18,799 Source: Computed by Mission from Bureau of Statistics' Census of Industries Table 8.3 Touriat Arrivals SEA ARRIVALS AIR ARRIVALS Through Through Passengers Passengers Total Through Cruise Changing Departing Tourist Year Passengers Visitors Passengers Plane On Same Visitors Arrivals Aircraft 1960 26,972 2,337 2,918 42,471 11,935 86,633 1961 21,824 2,789 4,077 40,385 11,933 81,008 1962 22,420 3,163 8,681 8,299 44,275 15,092 101,930 1963 34,716 3,594 12,870 12,437 50,578 20,652 134,847 1964 30,956 3,382 12,098 15,684 55,977 28,242 146,339 1965 32,501 2,964 15,032 18,025 72,882 37,171 178,575 1966 35,196 3,377 20,225 8,220 85,303 41,184 193,505 1967 40,041 3,332 21,225 7,341 95,781 52,689 220,439 1968 40,163 2,595 31,554 6,897 98,179 63,863 243, 251 1969 44,267 2,787 41,506 9,801 100,287 82,376 281,024 Source: Fiji Visitors Bureau  Table 9.1 Price and Wage Indices (1960 - 100) Year Retail Price Index -Male Adults All Items Food Only Basic Wages b 1960 100.0 100.0 100.0 1961 100.8 103.1 103.6 1962 103.0 105.9 101.7 1963 103.8 106.7 105.4 1964 107.1 111.1 107.2 1965 115.6 127.9 109.6 1966 115.2 119.6 117.4 1967 116.7 119.6 117.4 1968 121.2 125.8 131.7 1969 127.3c 133.82 n.a. a/ Average of quarterly values. b/ At mid-year, including earnings in kind. Excludes clerical, professional and technical workers, domestic servants, and intermittent workers, such as stevedores and cane cutters. c/ Imputed values based on the new CPI series. Source: Bureau of Statistics