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Document Creation Date: 
November 9, 2016
Document Release Date: 
February 12, 1999
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Publication Date: 
July 7, 1953
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PDF icon CIA-RDP83-00423R000800280001-2.pdf391.62 KB
? Approved For Release 1999/09/10 : CIA-RDp83-00423R00080028do0I?2 7 7 4 25X1A2g Date: 7 July 1953 COUNTRY: Fiji Islands SUBJECT: Economic PLACE ACQUIRED: DATE OF INFO: Jun 53 DATE ACQUIRED: 25X1X6 this Oneualasta lntor at' n for eiSt O pgs . r'Wq Only is supplied lei to rQ s. your ana ,_air-RI vissemi- tion 1~ 25X1A2g 25X1 A6~ "THE COLONY OF FIJI 1. "The British Crown Colony of Fiji is a group of 322 islands, only 106 of which are populated, situated about 1,100 miles north of New Zealand. The two largest islands, Viti Levu and Vanua Levu, have areas respectively of about 1+,000 and 2,000 square miles, and support the great majority of the population, which at the end of 1951 totalled 301,999. "The native Fijians, still living a feudal and communal existence under their chiefs, have been outnumbered by the Indians who now form the largest racial component, numbering 143,000 against 133,000 native Fijians. Indians were originally introduced to Fiji to work the sugar plantations, and the present community includes those who elected to stay after their indentures expired, their descendants, and those admitted under quota after the indenture system was abolished in 1920. In addition there are 6,000 white people of European origin (mainly from the UK, Australia, and New Zealand) who manage the main industries and provide the executive staff for the public service, 4,000 Chinese, and several thousand natives from other polynesian islands. If existing trends are maintained, population should exceed 500,000 by 1970, and so rapid an increase is likely to strain the present structure of the Colony unless efforts RMIRN TO C ttuovernment L!CAY 2. "As a Crown Colony, Fiji is administered by a Governor directly responsible to the United Kingdom Colonial Office. Since he exercises very wide powers, in theory at least the office in London may impose on the Colony any laws it wishes. But in practice, and in accordance with the British principle of encouraging ultimate self-government, the residents of Fiji have a consider- able influence on the law-making of the Colony through a Legislative Council of 31 members, six of whom are elected, nine nominated by the Governor and ASp ~Md' `81a ' ff 10 0C98 f6 SF 0ftV28O} 1-2x officio. Approved For Release 199.9/09/10 : CIA-RQP83-00423R000800280001-2 25X1 A2g Fijians, Indians, and Europeans are represented separately on the Council. Under this system, for a long period of years Fijian public finances have followed a sound and rather unspectacular course. As in many other countries, external inflationary forces have affected them both directly and indirectly. "FIJIAN ORDINARY BUDGET (Including expenditure from pact surplus budgets) 1951 1952 1953 Actual 4'F000 Rev. Estimate #F000 Budget Estimate i' F000 Customs and Exc ise 1,675 1,896 2,055 Income tax 745 950 .950 Post Office loo 115 127 Other 1,089 1,075 908 3,613 4,036 1+, 01+0 Expenditure 3,574 1+,129 4,050 Surplus + Deficit - 4. 39 - 93 "Customs revenue and income tax receipts have been stimulated by high prices in external trading, and local administration costs have also risen. Customs duties are the largest single revenue item, yielding 51% of current receipts in the 1953 estimates, while income tax, which is on a relatively low scale, will provide only 23%. "Development Plans 3. "In general, the Fijian Government has remained financially independent. But since the war, in accordance with the broad aim of the Colonial Development and Welfare Act, the British Government has been prepared to provide special financial assistance. "Within the framework of the new policy, Fiji prepared a detailed programme of desirable public works and special research and survey projects. Initially, a total expenditure ofa1+.5m. spread over ten years was contemplated, and it was expected that finance could be provided wholly outside the ordinary budget by contributions from accumulated surplus balances. Subsequently it was decided to provide 50,000 per year from the ordinary budget, and the original plan has been reviewed on several occasions, and considerably recast. Some Approved For Approved For Release 1999/09/1'0: CIA-RDP83-00423R000800280001-225X1A2g r!nnTPTrnWnrmTAT /0VriTrQTrsrv TWT" ,nh,rA mT^TT/rT l1T T~T(YTI T .-3- of the most important projects,in.cluding the dammi of the Navua River for hydroelectric power production at a total cost of 2.3m, O.6m. of which was included in the development budget, have been abandoned, and rising costs have caused a recasting of a number of other schemes. "The report of the most recent Committee of Review opens by pointing out that the original scheme placed too much emphasis on welfare, and too little on projects with an economic basis. Subsequently this emphasis was changed, although the most important welfare schemes were left, such as the erection and equipping of a medical Centre in Suva. On abandonment of the Navua River Scheme, which was found to be impractical on closer examination, the alloca- tion between economic projects and welfare schemes again became unbalanced, and a further review of the whole plan was made. What effect-his will have on the costs and financing of the scheme is not yet clear, but it seems likely that the final total cost to the end of 1958 will be rather more than.'5m. if all the schemes projected are to be completed. In the present year it is proposed to spend1+2,000. "Industry and Trade 4. "The economy of Fiji is based on four main commodities, all entering into world trade - sugar, copra, gold, and fruits. Of these, sugar has been by far the most important to Fiji. From small farms covering a total of about 90,000 acres, Indian small-holders produce cane yielding annually some 130,000 tons of raw sugar, although crops in recent years have been rather lower because of unsatisfactory seasonal conditions. In the current year it is hoped to harvest a crop of about 170,000 tons. The Colonial Sugar Refining Co, Ltd, which first operated in the Colony in 1882, owns all the sugar mills and so controls the industry. It conducts research and plant breeding stations, gives technical advice to cane farmers, finances farmers and engages in numerous activities designed to improve the welfare of those connected with the industry and to raise efficiency. Labour is almost entirely Indian. Contracts with the British Ministry of Food and the terms of the Commonwealth Sugar Agreement assure a ready market for all the sugar Australia can produce up to 1957. "While the sugar industry is almost entirely dependent on Indian labour, the main native Fijian industry is cocoanut .growing. In addition to the direct export of copra, two mills are producing cocoanut oil, copra cake and meal, and the value of oil exports now exceeds that of copra. The British Ministry of Food has contracted to take the wholes exp rt surplus of copra and cocoanut oil up to 1958, with a commencing price kstg48 per ton f o b (copra basis) and annual price adjustments not exceedin 10p. "While the industry remains the second most important, and is likely to continue so, it is declining mainly because a large proportion of the palms on non-Figian plantations are already ,over 50 years old, and many are over 70. If production is to be maintained, new planting is essential, but European plantation owners in particular appear to have doubts on the economic future Approved For Relea,%p,4$U P(T1 OT? CIA--111233 _Q0423R0008nn9Rnnn~ Approved For Release 1999/09110 : CIA-RDP83-00423R000800280001-2 25X1A2g of the crop, and refuse to risk further capital in it. "Bananas are the most important fruit crop, and the bulk of the annual output is sent to New Zealand, which has been willing and able to absorb all the bananas which Fiji could supply since the war, but has been unable to lift the whole crop because of shipping difficulties. A new ship entered the run late in 1951, but in January 1952 virtually the whole crop was destroyed in a hurricane which also caused serious damage in Suva. Its effect was magnified because almost the entire crop is now grown in the south-east of Viti Levu. This concentration followed the imposition of a heavy import duty by Australia in 1920, which wholly closed this market to Fijian bananas - a blow from which the industry has never really recovered. "Gold mining, the fourth main industry, did not begin until 1932, but has since progressed steadily. Though the gold bearing area is limited, there is probably considerable scope for further developments, given a measure of government co-operation in tax policy or the import tion of necessary equipment. Gold exports are fairly steady at aboutln.. annually. "Fiji has very little secondary industry except for the processing of primary products consumed locally or exported. As a result, imported goods cover a very wide range and are derived mostly from the UK and Australia. Principal markets for exports are the UK, New Zealand, US, and Canada. "Principal Exports dit Comm Unit 1938 1950 1951 y o Quan- F000 Wan- af'FOOO Quaan- 000 tit titY tity -' Sugar 000 tons 1 1,338 114 3,751 625 73 2 ra Co 33 271 10 544 15 908 p Cocoanut Oil 3 10 946 10 1,034 Cocoanut Meal - 5 62 5 91 Gold 000 fine oz. 89 701 103 1,421 94 1,29 6 Bananas 000 bunches 315 74 261 102 338 137 "Generally speaking, the Colony's exports have been virtually static in quantity, but the value has risen greatly since the war. 6. "Imports "Imports cover a very wide range, and we have information only as to value in broad classes. Principal items in 1951 were Food, Drink, and Tobacco V 2.5m), Metals and Metal Manufactures ((2.2m.) and Fibres, Yarns, and Textiles (E1.7m.). 7. "Statistics of total overseas trade in 1938 and post-war years are set out below: Approved For Release 1999/09/10 : CIA-RDP83-00423R0008002800 - 111ull U11 Approved For Release 1999/09/10 CIA-RDP83-00423R00080028000'y1A2g 8. "General Outlook "Because Fiji is dependent on oversea trade to an even greater extent than Australia and New ZFa1and, The Colony relies almost entirely on the prosperity of her export industries and the terms on which these exchange for other world products needed, to maintain living standards. "At present the prices being received for sugar, copra, and gold seem attractive and great comfort is drawn from the long-term contracts with the British Ministry of Food. To quote a former Governor, 'Fiji is now in a position of comparative economic security such as has never been attained by any Colony in the past.' But the real security can be over- emphasized. The contract prices, which are adjustable annually, could get out of line with the price of imports, despite limited changes each year. Local production costs are increasing fairly rapidly and Fiji cannot escape the rising cost of her import requirements, as 'is indicated by movements in the unofficial cost of living index set out below. Indian Workmen Earning European Less than 50 - weekly Families in 1943 Suva Country August 1939 100 100 100 October 1945 166 186 140 October 1946 174 191 151 October 1947 196 221 164 October 1948 209 238 174 October 1949 211 237 179 October 1950 219 243 189 September 1951 251 283 212 June 1952 263 297 221 Imports Exports Surplus Imports of Surplus of Exports FOOD FOOO , f'FOOO 1938 1,675 2,535 860 1946 3,571 3,604 33 1947 5,116 6,143 1,027 1948 5,945 7,790 1,845 1949 6,991 6,844 147 1950 6,961 9,368 7,812 7,313 2,055 851 Approved For Release 1999/09/10 : CIA-RDP83-00423R000800280001-2 Approved For Release 1999/09/10 : CIA-RDP83-00423R000800280001-2 25X1A2g -6- "The emphasis in the Government's economic policy today is obviously on 'development' in accordance with broad colonial policy leCd down in Whitehall. That word is open to many different meanings and the Fijian administration has rather happily taken the view that it need not involve any radical departure from existing practices nor any purely spectacular innovations. The present development programme is designed to improve the productive efficiency and therefore the economic resilience of the Colony, but how fast it can be pursued at the present time without further forcing up wage rates all round, and thus encouraging inflation, is rather more open to doubt. In that respect, Fiji has a problem common to her larger neighbours, although seemingly less serious at present." Approved For Release 1999/09/10 : CIA-RDP83-00423R000800280001-2