About the CBI

September 2005
Background Note: Fiji

Fiji flag: light blue; U.K. flag in upper hoist-side quadrant; Fijian shield
on the outer half.

PROFILE

OFFICIAL NAME:
Republic of the Fiji Islands

Geography
Area: 18,376 sq. km (7,056 sq. mi.).
Cities: Capital--Suva (pop. 167,000), Lautoka (pop. 30,000), Nadi.
Terrain: Mountainous or varied.
Climate: Tropical maritime.

People
Nationality: Noun--Fiji Islander; adjective--Fiji or Fijian.*
Population (2004 est.): 880,874.
Age structure: 31.7% under 14; 4% over 65.
Annual growth rate (2004 est.): 1.41%.
Ethnic groups: Indigenous Fijian 54%, Indo-Fijian 40%.
Religion: Christian 52% (Methodist and Roman Catholic), Hindu 33%, Muslim 7%.
Languages: English (official), Fijian, Hindi.
Education: Literacy--93%.
Health: Life expectancy--male 66.74 years; female 71.79. Infant mortality
rate--12.99/1,000.
Work force: Agriculture--67%.

*The term "Fijian" has exclusively ethnic connotations and should not be used
to describe any thing or person not of indigenous Fijian descent.

Government
Type: Parliamentary Democracy.
Independence (from U.K.): October 10, 1970.
Constitution: July 1997 (suspended May 2000, reaffirmed March 2001).
Branches: Executive--president (head of state), prime minister (head of
government), Cabinet. Legislative--bicameral parliament; upper house is
appointed, lower house is elected. Judicial--Supreme Court and supporting
hierarchy.
Major political parties: Soqosoqo Duavata ni Lewenivanua (SDL), Fiji Labor
Party (FLP), Conservative Alliance Matanitu Vanua (CAMV), National Federation
Party (NFP).

Economy
GDP (2004): $2.9 billion.
GDP per capita (nominal): $3,436.
GDP per capita (purchasing power parity): $3,707.
GDP composition by sector: Services 59.7%, industry 30.4%, agriculture 9.9%.
Industry: Types--tourism, sugar, garments.
Trade: Exports--$618.8 million; sugar, garments, gold, fish, mineral water.
Major markets--Australia, New Zealand, Japan, U.S., U.K. Imports--$721
million; basic manufactures, machinery and transport equipment. Major
sources--Australia, New Zealand, U.S. ($50.7 million).
External debt (2004): $112.8 million.

GEOGRAPHY
Fiji comprises a group of volcanic islands in the South Pacific lying about
4,450 km. (2,775 mi.) southwest of Honolulu and 1,770 km. (1,100 mi.) north
of New Zealand. Its 322 islands range in size from the large--Viti Levu
(about the size of the "Big Island" of Hawaii, and where Suva and 70% of the
population are located) and Vanua Levu--to much smaller islands, of which
just over 100 are inhabited. The larger islands contain mountains as high as
1,200 meters (4,000 ft.) rising abruptly from the shore.

Heavy rains--up to 304 cm. (120 in.) annually--fall on the windward
(southeastern) side, covering these sections of the islands with dense
tropical forest. Lowlands on the western portions of each of the main islands
are sheltered by the mountains and have a well-marked dry season favorable to
crops such as sugarcane.

PEOPLE
Most of Fiji's population lives on the island coasts, either in Suva or in
smaller urban centers. The interior is sparsely populated due to its rough
terrain.

Indigenous Fijians are a mixture of Polynesian and Melanesian, resulting from
the original migrations to the South Pacific many centuries ago. The
Indo-Fijian population has grown rapidly from the 60,000 indentured laborers
brought from India between 1879 and 1916 to work in the sugarcane fields.
Thousands more Indians migrated voluntarily in the 1920s and 1930s and formed
the core of Fiji's business class. The native Fijians live throughout the
country, while the Indo-Fijians reside primarily near the urban centers and
in the cane-producing areas of the two main islands. Nearly all of the
indigenous Fijians are Christian; more than three-quarters are Methodist.
Approximately 80% of the Indo-Fijians are Hindu, 15% are Muslim, and most of
the rest are Sikh, while a few are Christian.

Some Indo-Fijians have been displaced by the expiration of land leases in
cane-producing areas and have moved into urban centers in pursuit of jobs.
Similarly, a number of indigenous Fijians have moved into urban areas,
especially Suva, in search of a better life. Meanwhile, the Indo-Fijian
population has declined due to emigration and a declining birth rate.
Indo-Fijians currently constitute 40% of the total population, down from over
50% in the 1940s. However, Indo-Fijians dominate the professions and
commerce.

HISTORY
Melanesian and Polynesian peoples settled the Fijian islands some 3,500 years
ago. European traders and missionaries arrived in the first half of the 19th
century, and the resulting disruption led to increasingly serious wars among
the native Fijian confederacies. One Ratu (chief), Cakobau, gained limited
control over the western islands by the 1850s, but the continuing unrest led
him and a convention of chiefs to cede Fiji unconditionally to the British in
1874.

The pattern of colonialism in Fiji during the following century was similar
to that in many other British possessions: the pacification of the
countryside, the spread of plantation agriculture, and the introduction of
Indian indentured labor. Many traditional institutions, including the system
of communal land ownership, were maintained.

Fiji soldiers fought alongside the Allies in the Second World War, gaining a
fine reputation in the tough Solomon Islands campaign. The United States and
other Allied countries maintained military installations in Fiji during the
war, but Fiji itself never came under attack.

In April 1970, a constitutional conference in London agreed that Fiji should
become a fully sovereign and independent nation within the Commonwealth. Fiji
became independent on October 10, 1970. Post-independence politics came to be
dominated by the Alliance Party of Ratu Sir Kamisese Mara. The Indian-led
opposition won a majority of House seats in 1977, but failed to form a
government out of concern that indigenous Fijians would not accept
Indo-Fijian leadership. In April 1987, a coalition led by Dr. Timoci Bavadra,
an ethnic Fijian supported by the Indo-Fijian community, won the general
election and formed Fiji's first majority Indian government, with Dr. Bavadra
serving as Prime Minister. Less than a month later, Dr. Bavadra was forcibly
removed from power during a military coup led by Lt. Col. Sitiveni Rabuka on
May 14, 1987.

After a period of deadlocked negotiations, Rabuka staged a second coup on
September 25, 1987. The military government revoked the constitution and
declared Fiji a republic on October 10. This action, coupled with protests by
the Government of India, led to Fiji's expulsion from the Commonwealth of
Nations and official nonrecognition of the Rabuka regime from foreign
governments, including Australia and New Zealand. On December 6, Rabuka
resigned as head of state and Governor General Ratu Sir Penaia Ganilau was
appointed the first President of the Fijian Republic. Mara was reappointed
Prime Minister, and Rabuka became Minister of Home Affairs.

The new government drafted a new Constitution that went into force in July
1990. Under its terms, majorities were reserved for ethnic Fijians in both
houses of the legislature. Previously, in 1989, the government had released
statistical information showing that for the first time since 1946, ethnic
Fijians were a majority of the population. More than 12,000 Indo-Fijians and
other minorities had left the country in the 2 years following the 1987
coups. After resigning from the military, Rabuka became prime minister under
the new constitution in 1993.

Tensions simmered in 1995-96 over the renewal of land leases and political
maneuvering surrounding the mandated 7-year review of the 1990 constitution.
The Constitutional Review Commission produced a draft constitution that
expanded the size of the legislature, lowered the proportion of seats
reserved by ethnic group, and reserved the presidency for ethnic Fijians, but
opened the position of prime minister to all races. Prime Minister Rabuka and
President Mara supported the proposal, while the nationalist indigenous
Fijian parties opposed it. The reformed constitution was approved in July
1997. Fiji was readmitted to the Commonwealth in October.

The first legislative elections held under the new constitution took place in
May 1999. Rabuka's coalition was defeated by the Fiji Labor Party, which
formed a coalition, led by Mahendra Chaudhry, with two small Fijian parties.
Chaudhry became Fiji's first Indo-Fijian prime minister. One year later, in
May 2000, Chaudhry and most other members of parliament were taken hostage in
the House of Representatives by gunmen led by ethnic Fijian nationalist
George Speight. The standoff dragged on for 8 weeks--during which time
Chaudhry was removed from office by the then-president due to his
incapacitation. The Republic of Fiji military forces then seized power and
brokered a negotiated end to the situation. Speight was later arrested when
he violated its terms. In February 2002, Speight was convicted of treason and
is currently serving a life sentence.

Former banker Laisenia Qarase was named interim prime minister and head of
the interim civilian administration by the military and Great Council of
Chiefs in July. The Supreme Court reaffirmed the validity of the Constitution
and ordered the Chaudhry government returned to power in March 2001, after
which the President dissolved the Parliament elected in 2000 and appointed
Qarase head of a caretaker government until elections could be held in
August. Qarase's newly formed Soqosoqo Duavata ni Lewenivanua (SDL) party won
the elections. The SDL declined to include the largely Indo-Fijian Fiji Labor
Party (FLP) in the Cabinet on a legal technicality. The 1997 Constitution
states that any party receiving 10% or more of the seats in Parliament must
be given an opportunity to be represented in the Cabinet in proportion to its
numbers in the House of Representatives. In 2004, the Supreme Court affirmed
the constitutional provision and instructed the Prime Minister to offer
cabinet seats to the FLP. Subsequent negotiations between the two sides
regarding the cabinet portfolios proved unsuccessful until November 26, 2004,
when Prime Minister Laisenia Qarase, of the ruling SDL party, and Mahendra
Chaudhry, of the opposition FLP, agreed not to pursue further the dispute
over the composition of the cabinet.

GOVERNMENT
The president (head of state) is appointed for a 5-year term by the Great
Council of Chiefs, a traditional ethnic Fijian leadership body. The president
in turn appoints the prime minister (head of government) and Cabinet from
among the members of Parliament. Both houses of the legislature have some
seats reserved by ethnicity. Other seats can be filled by persons of any
ethnic group. The Senate is appointed; the House of Representatives is
elected.

Fiji maintains an independent judiciary consisting of a Supreme Court, a
Court of Appeals, a High Court, and magistrate courts. The judiciary remained
independent through the coups and the consequent absence of an elected
government. All but one of the five judges on the Supreme Court also is a
serving judge in Australia or New Zealand.

There are four administrative divisions--central, eastern, northern and
western--each under the charge of a commissioner. Ethnic Fijians have their
own administration in which councils preside over a hierarchy of provinces,
districts, and villages. The councils deal with all matters affecting ethnic
Fijians.

The Great Council of Chiefs (Bose Levu Vakaturaga) is made up of 55
hereditary chiefs, most of whom are nominated to the Council by their
respective provincial councils. It is established under the Fijian Affairs
Act and recognized by the constitution.

Principal Government Officials
Head of State (President)--Josefa Iloilo
Head of Government (Prime Minister)--Laisenia Qarase
Minister of Foreign Affairs--Kaliopate Tavola
Ambassador to the United States--Jesoni Vitusagavulu
Ambassador to the United Nations--Isikia Savua

Fiji maintains an embassy at Suite 240, 2233 Wisconsin Avenue NW, Washington,
DC 20007 (tel: 202-337-8320).

POLITICAL CONDITIONS
For 17 years after independence, Fiji was a parliamentary democracy. During
that time, political life was dominated by Ratu Sir Kamisese Mara and the
Alliance Party, which combined the traditional Fijian chiefly system with
leading elements of the European, part-European, and Indian communities. The
main parliamentary opposition, the National Federation Party, represented
mainly rural Indo-Fijians. Intercommunal relations were managed without
serious confrontation. However, when Dr. Bavadra's coalition democratically
installed a cabinet with substantial ethnic Indian representation after the
April 1987 election, extremist elements played on ethnic Fijian fears of
domination by the Indo-Fijian community. The racial situation took a turn for
the worse from which it is only now recovering. Three coups, two discarded
Constitutions, and political and economic uncertainty have been the result.

One of the main issues of contention is land tenure. Indigenous Fijian
communities very closely identify themselves with their land. In 1909 the
land ownership pattern was frozen by the British and further sales
prohibited. Today, 83% of the land is held by indigenous Fijians, under the
collective ownership of the traditional Fijian clans. Indo-Fijians produce
more than 75% of the sugar crop but, in most cases, must lease the land they
work from its ethnic Fijian owners instead of being able to buy it outright.

The long-term leases provided for under the 1976 Agricultural Landlord and
Tenants Act (ALTA) began to expire in the late 1990s, and some indigenous
landowners have declined to renew the leases of their land to others.
Thousands of displaced Indo-Fijians have moved to urban centers to look for
jobs, and 35% of the land has been taken out of production. The continued
impasse over ALTA is adversely affecting the sugar industry. The Indo-Fijian
parties' major voting bloc is made up of sugarcane farmers, and the farmers'
main tool of influence has been their ability to galvanize widespread
boycotts of the sugar industry, with the potential of crippling the economy.

Prime Minister Qarase and FLP leader (and former Prime Minister) Mahendra
Chaudhry have resumed dialogue on critical issues affecting the country,
including the ALTA. Mounting pressure from nearly every sector of the
community is forcing these leaders to put aside their personal differences
and work for the betterment of the country.

The next parliamentary election is due in 2006, although the government could
call an election at any time before then.

ECONOMY
Fiji is one of the most developed of the Pacific island economies, although
it remains a developing country with a large subsistence agriculture sector.
The effects of the Asian financial crisis contributed to substantial drops in
GDP in 1997 and 1998, with a return to positive growth in 1999 aided by a 20%
devaluation of the Fijian dollar. According to the Asian Development Bank,
the economy contracted by 4.7% in 2000, but recovered quickly and grew by
about 4% a year, every year since. Recent estimates for 2004 show an economic
growth rate of 3.5%. The Government of Fiji reported that growth was driven
by a recovery in the tourism industry as well as by improved performance in
mining, the harvesting and processing of mahogany, and fresh fish exports.

Tourism has expanded rapidly since the early 1980s and is the leading
economic activity in the islands. Approximately 445,000 people visited Fiji
in 2004. About one-third came from Australia, with large contingents also
coming from New Zealand, the United States, the United Kingdom, and Japan.
More than 70,000 of the tourists were American, a number that has steadily
increased since the start of regularly scheduled nonstop air service from Los
Angeles. In 2004, Fiji's gross earnings from tourism were about $430 million,
an amount double the revenue from its two largest goods exports (sugar and
garments). Gross earnings from tourism continue to be Fiji's major source of
foreign currency.

Fiji runs a persistently large trade deficit, although its tourism revenue
yields a services surplus. Australia accounts for between 35% and 45% of
Fiji's trade, with New Zealand, the United States, the United Kingdom, and
Japan varying year-by-year between 5% and 15% each. Fiji's two largest
exports are sugar and garments, with each accounting for about one-quarter of
export revenue in 2004--roughly $145 million each. The potential collapse of
Fiji's sugar industry, due to quality concerns, poor administration, and the
phasing out of a preferential price agreement with the European Union
possibly beginning in 2005, also poses a major threat to Fiji's already
uncertain economic well-being. The Fijian garment industry has developed
rapidly since the introduction of tax exemptions in 1988. The industry's
output has increased nearly ten-fold since that time, but the lower labor
costs of Chinese competitors, the softening of a trade preference agreement
with Australia, and elimination of quota restrictions imposed on competing
nations by the U.S., have resulted in closures of most garment factories in
the country.

Other important export crops include coconuts and ginger, although production
levels of both are declining. Fiji has extensive mahogany timber reserves,
which are only now being exploited. Fishing is an important export and local
food source. Gold and silver are also exported. The most important
manufacturing activities are the processing of sugar and fish. Since 2000 the
export of still mineral water, mainly to the United States, has expanded
rapidly. By mid-2004, it was more than $35 million per year.

Since the 1960s, Fiji has had a high rate of emigration, particularly of
Indo-Fijians in search of better economic opportunities. This has been
particularly true of persons with education and skills. The economic and
political uncertainty following the 1987 and 2000 coups added to the outward
flow by persons of all ethnic groups. In recent years, indigenous Fijians
also have begun to emigrate in large numbers, often to seek employment as
home health care workers. Unemployment is high, and wages are very low.
Advertised white-collar job openings often attract hundreds of applicants,
many of whom are well-qualified.

Other long-term economic problems include low investment rates and uncertain
property rights. Investment laws are being reviewed to make them more
business-friendly, including a relaxation of work permit requirements.
Investor confidence in Fiji dropped significantly immediately after the coup
in 2000. However, in April 2002, Moody's Investor's Service upgraded its Ba2
sovereign rating of Fiji from negative to stable, noting that despite
continuing domestic political uncertainties, the country's external financial
position had weathered the past 2 year's volatility without significant
deterioration. External liquidity remained adequate.

FOREIGN RELATIONS
Fiji maintains a pro-Western foreign policy. It has traditionally had close
relations with its major trading partners Australia and New Zealand, although
these relations cooled after both the 1987 and 2000 coups. Following free and
fair elections in September 2001, relations with Australia warmed
considerably. Australia is easily Fiji's most important bilateral partner.
Fiji has recently adopted a "look north policy," establishing closer
relations with the People's Republic of China. A significant increase in aid
from China as well as an increase in Chinese immigration has resulted.

Since independence, Fiji has been a leader in the South Pacific region. Fiji
is host for the secretariat of the 16-nation Pacific Islands Forum, as well
as a number of other prestigious regional organizations. Fiji hosted the
Forum's annual summit in 2002 at which the Nasonini Declaration against
terrorism was adopted. In 2002, Fiji also hosted the Africa, Caribbean and
Pacific (ACP) Summit with more than 80 countries represented. During the ACP
Summit, the Nadi Declaration was adopted regarding economic cooperation with
the European Union. In July 2003, Fiji hosted the South Pacific Games, a
prestigious event that went far beyond athletics and symbolized the country's
return to normalcy. Over the years, other Pacific Island governments have
generally been sympathetic to Fiji's internal political problems and have
declined to take public positions.

Fiji became the 127th member of the United Nations on October 13, 1970, and
participates actively in the organization. Fiji's contributions to UN
peacekeeping are unique for a nation of its size. It maintains about 600
soldiers overseas in UN peacekeeping missions, with MFO Sinai in the Middle
East, East Timor, and Iraq. Fiji also has a number of private citizens
working in Iraq and Kuwait, mostly in security services.

U.S.-FIJI RELATIONS
Fiji maintains an embassy in Washington DC, as well as a Permanent Mission in
New York at the United Nations. Although the United States provides
relatively little direct bilateral development assistance, it contributes as
a major member of a number of multilateral agencies such as the Asian
Development Bank. The U.S. Peace Corps, withdrawn from Fiji in 1998 for
budgetary reasons, resumed its program in Fiji in late 2003.

Principal U.S. Embassy Officials
Ambassador--Larry M. Dinger
Deputy Chief of Mission--Ted Mann
Political/Economic/Commercial Affairs--Brian J. Siler
Consul--Kirk Lindly
Management Officer--Jeffrey Robertson

The U.S. Embassy in Fiji is located at 31 Loftus Street, Suva; tel:
679-331-4466, fax: 679-330-0081. The mailing address is U.S. Embassy, P.O.
Box 218, Suva, Fiji.