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The economic importance of the sugar industry for Fiji

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posted on 2006-01-01, 00:00 authored by Paresh Narayan, B C Prasad
© 2006 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. For over a century, the sugar industry has been perceived as the backbone of the Fijian economy, given its contributions to gross domestic product (GDP) and employment generation. However, due to the non-renewal of land leases and the gradual withdrawal of the preferential prices by the European Union, the industry is on the verge of collapse. We use the Fiji computable general equilibrium model to simulate the economy-wide impact of a 30% reduction in sugar production. Amongst our key results, we find that in the long-run a 30% reduction in sugar production leads to a 2.1% fall in exports, and government expenditure and real consumption fall by 1.9 and 1.6%, respectively. These declines in the aggregate demand components are reflected in a fall of around 1.8% in Fiji’s GDP. The negative repercussion of declining economic growth is reflected in a 1.5% decline in real national welfare.

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Title of book

Computable General Equilibrium Approaches in Urban and Regional Policy Studies

Pagination

189 - 203

Publisher

World Scientific Publishing

Place of publication

Singapore

ISBN-13

9789812707116

Publication classification

BN.1 Other book chapter, or book chapter not attributed to Deakin

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