Economic importance of the sugar industry for Fiji

Paresh Kumar Narayan, Biman Chand Prasad

Research output: Contribution to journalReview ArticleResearchpeer-review

10 Citations (Scopus)

Abstract

For more than a century, the sugar industry has been perceived as the backbone of the Fijian economy, given its contributions to gross domestic product (GDP) and employment generation. However, because of the non-renewal of land leases and the gradual withdrawal of preferential prices by the European Union, the industry is on the verge of collapse. We use the Fiji computable general equilibrium model to simulate the economy-wide impact of a 30% reduction in sugar production. Among our key results, we find that in the long run a 30% reduction in sugar production leads to a 2.1 % fall in exports, and government expenditure and real consumption fall by 1.9% and 1.6%, respectively. These declines in the aggregate demand components are reflected in a fall of approximately 1.8% in Fiji's GDP. The negative repercussion of declining economic growth is reflected in a 1.5% decline in real national welfare.

Original languageEnglish
Pages (from-to)104-114
Number of pages11
JournalReview of Urban and Regional Development Studies
Volume17
Issue number2
DOIs
Publication statusPublished - Jul 2005
Externally publishedYes

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