COVID-19’s Impact on Fiji
Over the last three years, COVID-19’s impact on Fiji has been devastating. The pandemic’s effects hit Fiji’s thriving tourism industry particularly hard, which in 2020 accounted for 38% of Fiji’s gross domestic product (GDP). As a result, Fijian leaders acted quickly to implement recovery efforts, aimed at supporting sustainable economic growth and adapting to the “new normal” that the pandemic imposed. While the general public met some of these measures with opposition, these measures remained necessary in the face of new unprecedented challenges.
The 2020 Initial Response
The COVID-19 pandemic sent shockwaves through Fiji in 2020, with businesses closing and international travel restrictions put in place to keep the country safe from outbreaks. During this time, the focus was on adapting to the short-term new market realities brought by the pandemic, which resulted in these business closures. By July 2020, 50% of tourism-focused businesses had either temporarily or fully closed and 20% of non-tourism-focused businesses “indicated a need to defer loans,” according to an International Finance Corporation (IFC) report.
In 2019, 24% of the population lived below the national poverty line, a number that has slowly grown since 2013. Unemployment figures also rose from 4.3% in 2018 to 4.9% in 2021.
The IFC conducted a survey to better assess the situation. The survey received 3,596 responses from businesses, with 17% of those primarily servicing the tourism industry. This survey’s findings helped establish strategies for moving forward, with the long-term goal of reducing COVID-19’s impact on Fiji.
The 2021 Outbreak
After a year of minimal COVID-19 cases, an outbreak occurred in April 2021. By July 2021, COVID-19’s impact on Fiji worsened, with the nation averaging more than 900 new COVID-19 cases daily. The Ministry of Health and Medical Services led Fiji’s response effort to this outbreak and successfully implemented quarantine and lockdown measures, provided COVID-19 vaccinations and utilized contact tracing and cluster investigations to surveil infection trends. By that same month, more than 31% of the target population had received their first doses of the vaccine and Fiji had already fully vaccinated many frontline workers.
International partners also showed their support during this critical time. Countries such as Australia, New Zealand and the United Kingdom assisted by providing life-saving medical supplies and pledging donations. Multilateral organizations such as the World Health Organization (WHO) and the EU assisted by ensuring better accessibility to COVID-19 vaccines and equipment, including testing machines and miscellaneous medical supplies totaling more than $2.6 million in value.
Curbing Concerns in 2022
Despite controversies and civil unrest surrounding hard-line regulations, such as Fiji’s “no jab, no job” policy, the country achieved a significant milestone by the end of 2021. Approximately 90% of the target population had received second doses of the COVID-19 vaccine.
Although the country’s health care efforts saw success in curbing the spread of the virus, the pandemic’s impact on Fiji’s economy continued, with significant public debt-to-GDP ratios resulting from the persisting 2020 deficits. In addition, the global economy witnessed some of the highest surges of inflation in the past 20 years. These inflated prices include shipping, import, energy and food costs.
To revive its tourism industry, Fiji re-opened its borders to travel with modified guidelines. However, despite these efforts, economic growth did not rebound as expected due to the lingering civil unrest from the previous year and the emergence of an Omicron variant outbreak.
Current Concerns and Trends
As of March 2023, Fiji has made significant progress in its vaccination campaign, with the Ministry of Health and Medical Services reporting a 95% full vaccination rate for the target population. Infection trends are continually decreasing as well, and over the past month, Fiji reported only one new case. One can attribute this positive development to the general public adhering to effective health measures.
The tourism industry is also gradually recovering, with international travel to Fiji fully resuming after a long hiatus. As of February 2023, travelers to Fiji no longer need to provide proof of COVID-19 vaccination or travel insurance. Initial figures from 2022 show that tourist arrivals sat at around 45% of pre-pandemic figures.
However, even with progress in the medical and tourism industries, economic figures are still hurting. David Gould, the World Bank’s lead economist for the Pacific, estimated that while economic output is growing, levels may not exceed pre-pandemic levels until 2024. One contributing factor may be the record-breaking 30% unemployment rate in 2022, according to the Fiji Times.
The World Bank’s Pacific Economic Update advises Fijian leaders to be cautious when accepting fiscal support. Concerns include global economic uncertainty, debt servicing and rising inflation rates. To address these concerns, re-budgeting and public spending cuts can help to maximize the efficiency of taxpayer dollars and to prevent future public debt. Once Fiji’s economic output recovers to pre-pandemic levels, policymakers can invest in fiscal buffers to allow for economic leeway during future economic disasters.
In 2021, the World Bank swiftly approved a $50 million credit for Fiji as vigorous support for unemployment assistance, strengthening the Fijian social protection system and ensuring equitable access to social protection services. While this relief is not a permanent solution to Fiji’s rising poverty levels, it did push GDP growth from -15.2% in 2020 to -4.1% in 2021 and then from 6.3% in 2022 to 7.7% in 2023.
To this day, the World Bank continues its support to lessen COVID-19’s impact on Fiji. After discussions held with the Fijian government and other civil and private organizations, the World Bank Group developed a Country Partnership Framework for Fiji with the primary goal of reducing poverty emphasized by the pandemic and increasing sustainable wealth from 2020 to 2024. To do this, officials prioritize fostering inclusive and private sector-led economic growth, building fiscal and climate-based resilience and increasing gender equality.
The framework paints a picture of a bright future for Fiji. However, humanitarian efforts from the broader international community must continue in order for Fiji to return to its once-booming economic self.
– Anthony Lee