Land issues, infrastructure bottlenecks, access to financial services and socio-political uncertainty are some issues that limit the development of Fiji s private sector, according to the latest Fiji Financial Services Sector Assessment.
The report, released by the Pacific Financial Inclusion Programme, said that although the role of the private sector in growth and development of the economy is recognized by key stakeholders including the government, certain key issues limit the sector's development.
According to the report, corruption is perceived as significant in Fiji.
Fiji was ranked 55th out of 158 countries in Transparency International s Corruption Perceptions Index for 2005 it was not ranked by Transparency International in 2006 or 2007, according to the assessment.
Fiji has a small population and a limited number of persons in positions of power, the reports said, and personal relationships can be a significant factor in business and government decisions.
Additionally, infrastructure is generally of poor quality and even where it is adequate, such as telecommunications, it is expensive.
For a private investor, other services such as air transport and port charges, are comparatively high.
The report also noted that small businesses and entrepreneurs interviewed complained about access to credit and the relative lack of long-term credit in the market. High interest spreads have come down as result of the Reserve Bank of Fiji directive; however, the lack of land tenure rights remains a deterrent to medium and long-term finance, the report noted.
Another key impediment is inefficiency in the land-lease market in Fiji. The report said the Agricultural Land Trustee Act (ALTA) hinders investment in agriculture because of uncertainties over lease renewal and the low rate of compensation for any investment in leased land.This uncertainty, it said, also affects private sector investment with consequent lower benefits to both indigenous landowners and prospective investors.
Euclid Infotech - Banks and Financial Institutions News 06-09-10
