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Written by Neelesh GounderBiman Chand Prasad The positive news is that the Fijian economy seems to be have made a sustained recovery since after the impact of the economic fallout from the December coup.
However, as we discuss in the latest Development Policy Centre Discussion Paperthe recovery may not be as much as what is being forecast by the Reserve Bank of Fiji. The annual growth rate of GDP is forecast to grow by 3.
This period includes two bouts of contractions in output in and equal to 0. While some of the contributing factors to this period of negative and low growth could also be attributed to the spike in food and fuel prices inand the global economic crisis inthe major contributor has been the static, as well as the dynamic, consequences of the coup.
Therefore, it is too early to rejoice the last three years of modest recovery as much more in terms of structural reform, policy-reorientation and restoration of macroeconomic confidence in the economy will be needed to sustain economic recovery and move beyond a 3 percent growth rate in the economy.
A lot Economic policy paper of import in hinges on the political situation leading up to the national elections in Credible national elections and a stable political climate are important for future economic performance and sustaining growth in the long-term.
In addition, the performance of the Fijian civil service will have to improve significantly for the achievement of sustained economic growth. The efficient delivery of services to the public generally and to businesses will determine if Fiji will be able to implement effective policies in the future and raise productivity growth.
The rot in the civil service began after and has continued in the last 26 years.
Despite the good efforts by the Bainimarama government, the civil service continues to be riddled with a culture of mediocrity and appointments and promotions are still based on ethnic, and sometimes provincial, considerations. Additionally, ensuring strong and stable consumption by raising household incomes to sustain growth should be a priority, alongside greater incentives to promote investments in agriculture and services, and reforms for the increased efficiency of investments.
Greater macroeconomic stability and an improving business environment will also be important for creating a solid base for medium-term economic growth. The forecast for is strongly dependent upon how much new foreign investment is realised and how the real sectors, such as the sugar industry, perform as per expectations.
Given the performance of the real sectors such as agriculture and manufacturing, and less than expected visitor arrivals in the first quarter of the year, the revised forecast of a 3.
It would have been reasonable if the government had stuck to the original forecast of 2. The government should continue with its structural reforms and further liberalise the telecommunications market. There is further room to bring down the cost of telecommunication and mobile charges generally. This would help boost the services sector and we could attract more and better back office operations in Fiji.
There are tangible steps that it has taken to do that.
However, it should not deviate from the overall thrust of its economic policy, which emphasises an export-oriented growth strategy.
The government should carefully analyse the comparative advantages we have in different sectors, such as agriculture and services, and promote those as export sectors. The policy of import substitution has not worked in Fiji in the past and is unlikely to work in the future.
Therefore, it is imperative that government does not focus on import-substitution like it has done in the dairy industry. For agriculture, the investment should be in infrastructure, strengthening and extending technical assistance and research services for farmers, and where appropriate it should target input subsidies for incentivising farmers.
There has been a massive reduction in poverty around the world in the last decade. However, the same cannot be said for Fiji. The rate of poverty at independence in was 7 percent.
Since then it has increased almost fourfold and currently stands at around 32 percent. Both the incidence and the severity of poverty increased between the three Household Income and Expenditure Surveys HIES ; with levels of 15 percent in25 percent inand 34 percent in EU trade policy sets the direction for trade in and out of the EU.
The Directorate-General for Trade in the European Commission helps to develop and implement EU trade policy.
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Its population, at over million, is also getting on for twice as much as that of the European Union. News on Policy, Exports, Imports, Trade Regulations, WTO and on Foreign Trade.
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Files with authors or sources listed to the right of the link are available from the NBER or are otherwise associated with the NBER research program. Governments in various countries, irrespective of the country׳s level of economic growth, seek to initiate macroeconomic policies towards achieving better economic performance in order to advance level of business activities and ultimately, ensure better quality of life for the people.