Jonathan Pryke, Lead Economist at the Australian Department of Foreign Affairs and Trade (DFAT), presented an in-depth analysis of the Vuvale Economic Partnership between Australia and Fiji at the 28th Fiji-Australia/Australia-Fiji Business Forum in Suva in August. His presentation examined the evolution of the bilateral economic relationship across various sectors, highlighting significant economic trends, opportunities, and challenges in trade, investment, tourism, and labour mobility.
One of the key aspects discussed is the economic impact of the COVID-19 pandemic on Fiji, which experienced one of the world’s most significant economic contractions due to border closures in 2020 and 2021. However, Fiji recovered quickly, and over the course of 2022 and 2023, it became the fastest-growing economy globally, demonstrating strong resilience and recovery capacity.
In terms of trade, Australia plays a critical role as one of Fiji’s most important trading partners. As of 2024, Australia is Fiji’s third-largest export partner and second-largest import partner. The presentation highlights that gold is Fiji’s primary export to Australia, while textiles, which had been trending downwards, are now being replaced by the growth in other goods. Meanwhile, Australian exports to Fiji have surged in recent years, with wheat leading the charge, followed by significant growth in ship and boat exports.
Foreign Direct Investment (FDI) trends show that while Australia remains Fiji’s number one investment partner, its share of total FDI is gradually declining. This could represent an opportunity for Australia to reinvigorate its investment strategies in Fiji and other Pacific nations.
Tourism, a vital component of Fiji’s economy, has also seen an interesting trend. While Australian tourists to Fiji have grown in absolute numbers, their proportion of total tourist arrivals to Fiji had declined prior to the pandemic. However, as of 2023, Australian tourist numbers were 20 per cent above 2019 levels, a positive sign of recovery. Fiji has also moved up from being Australia’s tenth most popular travel destination before the pandemic to now ranking eighth, reflecting its growing appeal as a travel hotspot.
Labour mobility, particularly through the Pacific Australia Labour Mobility (PALM) scheme, has seen a significant increase. Pre-COVID, remittances to Fiji averaged FJD 50 million per month, but post-pandemic, these have doubled to approximately FJD 100 million per month. Fiji’s outward migration in 2023 and 2024 has reached roughly 5 per cent of the population each year, with only 20 per cent of these migrants participating in the PALM scheme.
Australia is actively supporting private sector development in Fiji through various initiatives such as the Pacific Digital Economy Program, International Finance Corporation (IFC) partnerships, and the Pacific Horticulture and Agriculture Market Access (PHAMA) program. This is complemented by Australia’s ongoing investment in infrastructure through the Australian Infrastructure Finance Facility for the Pacific (AIFFP).
The Vuvale Economic Partnership is poised to deepen economic ties between Australia and Fiji, focusing on enhancing trade, fostering people-to-people flows, and creating new opportunities for collaboration in financial markets, taxation, and biosecurity measures. The partnership underscores both nations’ commitment to economic recovery and sustained growth in the post-pandemic era.
