Till the 1980s, the descendants of Indian laborers that the British had brought on the islands dominated the country. Since 1987, the islands have faced a number of military coups that have disrupted attempts to form a democracy. The 1990 constitution of Fiji strengthened the powers of the native Melanesian community over the political scenario although an amendment in 1997 gave equal powers to the Indians and the natives. However, political turmoil has continued in the islands resulting in disturbances in the economic activities of the population and trade relations with the rest of the world (CIA).
Fiji had an estimated population of 918,675 in 2007, of which 30.9 percent is below 15 years of age, 64.7 percent between 15 and 64 years and 4.4 percent above 64 years (CIA). 54.8 percent of the population are native Fijians, mostly Melanesian and Polynesian mix, 37.4 percent Indians and the remaining 7.9 percent others comprising of Europeans, other Pacific islanders and Chinese. About 92 percent of the Fijian population is literate (Bank of Hawaii, 1998).
Fiji is richly endowed with natural resources, with forest, fish and mineral assets and is among the most developed among the Pacific Ocean islands. Yet, the economy of Fiji is still dependent on revenues from sugar export, tourism and remittances from Fijians abroad. 8.9 percent of Fiji's GDP of $2.033 billion in 2007 was accounted for by agriculture, 13.5 percent by industry and 77.6 percent by services, mostly tourism.
One third of Fiji's industrial activity is related to sugar but processing of sugar is inefficient. Fiji exports most of the sugar output to Europe and may be hit by proposed subsidy cuts on sugar by the European Union. Tourism has also been affected by the repeated coups in the country. The Reserve Bank of Fiji anticipated a contraction of the economy by 3.1 percent in 2007-08 (CIA) and a runaway current account deficit, which was 23 percent of GDP in 2006.
Relative Economic Development and Concerns
Fiji ranks 92nd in the Human Development Index (HDI) and in terms of per capita Gross Domestic Product at Purchasing Power Parity, with $6,049 and 108th in terms of life expectancy at birth, which is 68 years (HDR). In 1998, Fiji ranked top of the World Bank's list of lower-middle income group countries and was in the same category as Latvia, Peru, Lebanon and Costa Rica (Bank of Hawaii, 1998). However, political instability and lack of industrial activity have resulted in some contraction of the economy since then.
Fiji is a small country, slightly smaller than New Jersey. The economy is also far smaller than the United States. The per capita GDP at official rates in Fiji in 2007 was $4,100, less than one-tenth of what it was in the US, at $46,000. Life expectancy at birth in Fiji, at 68 years, was also lower than in the US, 78 years. Population below the poverty line in Fiji in the last estimated year, 1990-91 was 25.5 percent and the unemployment rate was 7.6 percent. On the other hand, only 12.4 percent of the population in the US was below the poverty line in 2004 and the unemployment rate in 2007 was 4.6 percent. Fiji exports primary products, mostly agricultural to the US and Europe, and imports manufactured commodities.
The major concern for the Fijian economy is the political uncertainty that the islands have been facing over the last two decades. This has resulted in