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Development assistance in Fiji

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Pillar 3 – economic recovery in Fiji

Overview

Australia is committed to supporting Fiji's economic recovery from the severe impacts of COVID-19. We are collaborating with the International Finance Corporation (IFC) and the Fijian Government to assess the business impacts of the downturn, and to develop policy guidance for reopening tourism. We are working with partners, including banks, to assist micro, small and medium enterprises to access finance; develop new markets and refresh marketing strategies for Fijian tourism following tax cuts in the 2020-2021 budget to make the sector more competitive

Related initiatives

DFAT-IFC partnership: supporting private sector development

Up to $14.68 million 2016-2021

We are partnering with the International Finance Corporation (IFC) to support the Fiji Government to achieve its economic development priorities of improving small-medium enterprise performance, building Fiji's international trade competitiveness and stimulating inclusive private sector-led growth.

Significant work is underway to support Fiji's 2021 Tourism Development Plan, a market assessment for the Special Economic Zone in the western region, and a review of Fiji's Investment Policy Framework and Act. Under the partnership, we are also supporting the provision of low-cost housing and investments in renewable energy.

Market Development Facility (MDF)

Up to $17.5 million for Phase 2, 2017 – 2022

Market Development Facility (MDF) is a multi-country program that began in Fiji in 2011 and has since expanded to Timor Leste (2012), PNG and Sri Lanka (2015). MDF stimulates business innovation and private sector investment for development outcomes, particularly poverty reduction and women's economic empowerment. Following strong results from Phase 1, Australia extended the MDF program in Fiji for five years, 2017-2022. Market Development Facility (MDF) Phase 2 commenced in July 2017 and is for 5 years (until June 2022). The MDF Fiji budget for Phase 2 is $17.5 million, almost double its budget in Phase 1. MDF's outcomes are: (i) increased competitiveness of sectors that involve poor men and women; and (ii) supporting local firms to create new market opportunities that benefits poor people. It aims to achieve these outcomes by facilitating partnerships with market actors (public and private) to address market failures and facilitate systemic, market-wide changes that are sustained by market actors after MDF's activities conclude. MDF aims to implement approximately 65 partnerships and 12 formal influencing events to achieve the following results by 2026: reach 48,500 beneficiaries, leverage USD5m in private investment, and generate USD18.5m in market transactions and 2,250 jobs. MDF has reoriented its activities Fiji to support businesses recovery from COVID-19. Its interventions have supported the local production of hand sanitiser and face shields, the provision of business counselling and the development of food delivery and mobile money apps.  MDF has also supported tourism operators to target local tourists by providing market intelligence and advice.

The Pacific Labour Scheme

Fiji joined the Pacific Labour Scheme(Scheme) in April 2019. The Scheme is helping to meet business demand across all sectors in rural and regional Australia. Workers from Fiji, Kiribati, Nauru, Samoa, Solomon Islands, Tuvalu and Vanuatu are currently able to apply for low and semi-skilled employment in Australia under the Scheme. Fiji is currently the largest sending country under the Pacific Labour Scheme (PLS) with 576 Fijians in Australia in January 2021.

Pacific Horticultural and Agricultural Market Access - PHAMA Plus

Up to $0.3 million, 2018 – 2022

PHAMA Plus has identified Kava and Root Crops as the lead commodities that it will focus on. In Kava, PHAMA Plus aims to develop a self-regulating and profitable kava industry supplying a diverse range of products/markets as a result of increased volume of supply and importing country confidence through adherence to export compliance. In Root Crops, PHAMA Plus would like to see improved farming practices to produce high volume, high quality taro and exporters who are willing to invest in processing and/or value add that meets export compliance to deepen existing or to access new markets.

With the drastic reduction in passenger flights resulting from COVID the cost of air freight from Fiji increased by an average of 200%. PHAMA Plus liaised with exporters, business organisations, Fiji Airways and other freight providers to encourage uptake of the once weekly services which continued to fly to Sydney, Auckland and Los Angeles with the focus on maintaining existing markets. Uptake of the available flights by fresh produce exporters has been high and PHAMA Plus is continuing to monitor the viability of these essential flights.

Pacific Financial Inclusion Program (PFIP)–Phase 2

Up to $9 million, 2014 – 2021

Pacific Financial Inclusion Program (PFIP) is a Pacific-wide program that has helped over 1.78 million low-income Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supporting policy and regulatory initiatives, and empowering consumers.

The UN Pacific Financial Inclusion Programme (PFIP) has supported Vodafone Fiji since 2010 with its MPAiSA mobile money platform.  This has provided Fijians with accessible and practical services that overcome key barriers to access, such as distance and transaction costs. PFIP supported Vodafone with a grant and technical assistance to develop new financial services to encourage Fijians to adopt and actively use MPAiSA. There are currently around 580,000 registered MPAiSA users in the Pacific and 834,000 active connections on the network.

Bilateral budget support

To support Fiji's economic stability and assist in financing the Fiji Government's effective response to COVID-19 and Tropical Cyclone Harold, Australia committed a total of $19.5 million of direct budget support in April 2020. This support was directed to the following areas: (i) health, disaster management (following TC Harold which hit at the same time as the pandemic), social protection/welfare schemes and as part of general budget support.

Recognising the ongoing impact of COVID-19 on Fiji's Economy, Australia provided a further $20 million (including 20 million from the Pacific COVID-19 Response Package) to the recipients of the Poverty Benefit Scheme, Care & Protection Allowance and the Disability Allowance. This funding is expected to support approximately 118,000 people (representing 13 per cent of Fiji's total population) and was in addition to $5.2 million (out of the 19.5 million) of budget support directed to these schemes in April 2020.

Supporting programs

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