SUVA, Fiji, May 4, 2022 – The development of outsourcing services (OS) could see Fiji tap into a global market estimated to be worth almost $1 trillion (FJ$2.1 trillion) while providing the economy with a climate-resilient source of growth and inclusive jobs, according to a new World Bank Group report.
The Fiji Country Private Sector Diagnostic (CPSD) report, by IFC and the World Bank, says the COVID-19 pandemic and a series of extreme weather events have been devastating for the economy and exacerbated some of Fiji's long-standing structural issues. It recommends a four-pronged approach for the future –unlocking new sources of growth beyond tourism, strengthening economic and climate resilience, leveraging Fiji's potential as an economic hub in the Pacific region and creating inclusive job opportunities.
"Fiji is the hub of the South Pacific with aspirations to become a more significant driver of growth for the wider Asia-Pacific region. Tapping into the $1 trillion opportunity that the global outsourcing sector represents is a key facet of Fiji's ongoing post-COVID recovery by creating good jobs that leverage our young and highly educated workforce," said Fijian Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum. "This report –– which is essential reading –– aligns well with our government's vision for an advanced and diversified Fijian economy."
In parallel with efforts to diversify the economy, the report says Fiji must prioritize areas and reforms that can help expand its external market and leverage its geographic centrality in the Pacific to become an economic hub for Pacific nations, and potentially the broader Asia-Pacific region. It says a focus on healthcare and agri-logistics as well as developing outsourcing services can help generate high numbers of quality jobs, especially for women and youth, who have historically experienced greater unemployment and have been disproportionately affected financially by COVID-19.
There is high potential in developing Fiji's OS sector to attract multinational corporations to open global capability centres, taking advantage of strong growth prospects for the industry in the Asia Pacific region which by 2023 is set to become the biggest OS market globally after North America. The OS sector also presents employment opportunities for Fiji's young population—around 50 percent are under 27 years of age—including the significant number of increasingly tech-savvy university graduates that Fiji generates each year.
"With fiscal space now limited due to the extraordinary volume of COVID relief spending, private sector financing and solutions are vital as Fiji works towards a more diverse and resilient economy, amid the lingering impacts of COVID-19," said Sameer Chand, Acting IFC Resident Representative for Fiji, Samoa, Tonga, Kiribati and Tuvalu. "The Fiji CPSD highlights some enormous opportunities for Fiji, at the heart of which is a pathway for diversifying the economy and developing a more robust private sector, which together can help insulate against future shocks while supporting the nation's ambitions."
Developing the OS sector, along with the healthcare and agri-logistics industries, would accelerate digital transformation in Fiji that could have economy-wide spillover effects and attract further private-sector investment in the next three to five years. With its central location in the Pacific Islands region, strong transport links, and a well-educated English-speaking workforce, Fiji also has potential to become a regional hub in other sectors, including healthcare, information and communication technology and manufacturing.
"This report serves as an economic roadmap to boost private sector financing and private sector-led solutions to complement Fiji's national development strategy in response to the unprecedented social and economic impacts of COVID-19 compounded by recent disasters," said Lasse Melgaard, World Bank Resident Representative for the South Pacific. "Our ongoing commitment to Fiji's sustainable and inclusive economic recovery will rely heavily on the diversification of its economy and supporting its efforts to create more jobs and strengthen resilience to better withstand future shocks."
With the ambitious goal of achieving 100 percent power generation by renewable energy sources, there is also a need to plan strategically, and explore technology and innovation for integration of hydro and solar generation to meet increasing future demand. Fiji is increasingly at risk given the large share of its population living in disaster-prone areas, the climate-sensitive locations of critical infrastructure and the economy's dependence on agriculture and tourism.
It is estimated that about $4.6 billion (F$9.8 billion) will be needed to address Fiji's climate-change exposure in the next eight to 10 years. In order to incentivize private participation, various elements such as climate financing incentives, enabling regulation, and climate-related workforce skills will need to be developed.
About the Country Private Sector Diagnostic
The World Bank Group's Country Private Sector Diagnostics aim to identify sectors where private sector solutions can create or expand markets and make substantial contributions to development impact. The diagnostics use a structured approach to analyze key sectors with unrealized private sector potential in each country, select several sectors for deeper analysis, and make recommendations for policy action. The sector analyses, conducted with significant input from teams across the World Bank Group and from external partners including governments, provide valuable information on the challenges and opportunities to better leverage the private sector to achieve developmental objectives. The CPSD aligns with the World Bank Group's Maximizing Finance for Development (MFD) approach, which looks to private sector solutions to reach the 2030 Sustainable Development Goals.
About the World Bank
The World Bank provides financing, global knowledge, and long-term commitment to help low- and middle-income countries end poverty, achieve sustainable growth, and invest in opportunity for all. We comprise the International Bank for Reconstruction and Development (IBRD), the world's largest development bank, and the International Development Association (IDA), one of the largest sources of funding for the world's poorest countries. With the other World Bank Group institutions as well as partners across the public and private sectors, we are helping build solutions to the global challenges of the 21st century in all major sectors of development. A world where no one lives in poverty and everyone has the opportunity for a better life is within our reach.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
