The Fiji economy, May 1987: problems and prospects

Abstract

On 14 May 1987 a group of Fijian soldiers led by Colonel Rabuka entered the House of Representatives and escorted the Prime Minister, the Leader of the Labour Coalition Government and his Cabinet colleagues out of the House. The ensuing events had profound effects on Fiji's small economy. The fall in tourist traffic, flight of skilled manpower and capital, and a loss of confidence in the modern sector of the economy led to a currency devaluation of 33 per cent. In 1987 Fiji's GDP fell 11 per cent and it is likely to fall more in 1988. Wages, employment and services have been severely cut with a concomitant effect on income, savings and social stability. Fiji's economic growth since the mid 1970s had been slow. This has to bear some of the responsibility for the turmoil of 1987. This book analyzes the economic background of the coup, its economic effects and explores the longer term economic growth possibilities open to the Interim government and subsequent Fiji governments. Without such growth, stability is unlikely to return to Fiji.