Financial Crime World

Financial Sanctions Threaten Fiji’s Economic Future: World Bank Report

A recent report by the World Bank has sounded the alarm over Fiji’s financial situation, warning that if decisive government action is not taken, the country’s debt levels could threaten its economic recovery and sustainable development.

Debt Levels Reach 90% of GDP in 2022

According to the report, Fiji’s debt reached an alarming 90 percent of Gross Domestic Product (GDP) in 2022. This has been exacerbated by:

  • The global COVID-19 pandemic
  • Multiple severe tropical cyclones
  • Russia’s invasion of Ukraine

Report Warns of Potential Threat to Economic Recovery

The report, titled “Fiji Public Expenditure Review: Summary Report”, projects that if left unchecked, Fiji’s debt levels are likely to continue growing, potentially threatening the country’s economic recovery from the pandemic.

The report provides an in-depth analysis of:

  • Domestic revenue
  • Cost of the civil service
  • Value-for-money of public investments in infrastructure
  • Viability of support to the sugar industry

Government Response

“We welcome the World Bank’s Public Expenditure Review report,” said Deputy Prime Minister Biman Prasad. “This comes at a time when our government is striving to get Fiji back on a path of fiscal sustainability and financial discipline.” The minister added that the findings of the report will serve as an important consideration in the process of fiscal consolidation.

Recommendations for Revenue Increases and Public Expenditure Cuts

The report offers recommendations for revenue increases and public expenditure cuts to reduce Fiji’s debt to 50 percent of GDP by 2032. Some key recommendations include:

  • Increasing domestic revenue through tax reforms
  • Implementing cost-saving measures in the civil service
  • Improving value-for-money in public investments in infrastructure
  • Reviewing support to the sugar industry

World Bank Commitment to Fiji’s Development

The World Bank has committed US$414 million to six active projects in Fiji, focused on:

  • Transport
  • Health
  • Climate change
  • Tourism
  • Digital connection

“We remain committed to Fiji’s development priorities, including working together towards Fiji’s economic recovery and resilience strengthening to better withstand future shocks,” said Stefano Mocci, World Bank Country Manager for Fiji, Kiribati, Nauru, Samoa, Tonga, and Tuvalu.