Fiji

Key trends and development challenges

Fiji is a small island developing state located in the Pacific sub-region of Melanesia. With a 2022 GDP of $4.94 billion, Fiji is the second-largest economy in the Pacific, and accounts for 12% of regional GDP. Fiji has a population of 932,000 (2022), resulting in a GDP per capita of $5,300, the seventh-highest in the Pacific. The country’s Exclusive Economic Zone (EEZ) covers more than 1.28 million square kilometres, the 26th-largest globally, and is comparable in size to the EEZ of Argentina.

Fiji historically has one of the lowest Official Development Assistance (ODA) to Gross National Income (GNI) ratios in the Pacific Islands region, with aid accounting for only 2.5% of national income between 2008 and 2020. However, in the wake of the pandemic, this share spiked to 15%. The jump was a product of both increased development support to the country during the pandemic and a contraction in Fijian incomes. In a global context, Fiji is now among the most aid-reliant countries in the world, ranking 30th among 127 developing countries for its ODA/GNI ratio. At 0.729, Fiji’s Human Development Index score ranks 104th out of 193 ranked countries.

Fiji’s post-Covid economic recovery has been strong, with growth returning to pre-pandemic trends. However, the risk of major climatic shocks poses a persistent threat to the country’s development trajectory and economic stability. As such, the Fijian government’s development agenda places a strong emphasis on climate-adapted infrastructure and disaster preparedness measures.

Between 2008 and 2022, annual Official Development Finance (ODF) to Fiji — including grants, loans, and other forms of assistance — averaged $287 million. As a share of Fiji’s total received development support, loan-financed projects have increased significantly. In 2008, loans accounted for just 5% of total incoming ODF, while in 2021 and 2022 they made up 51% and 79%, respectively. Despite this jump, the International Monetary Fund still ranks Fiji’s risk of debt distress as moderate, in part a result of the high concessionality of the loans received by the country.

Development partners and sector trends

Three-quarters of the ODF support to Fiji comes from its largest five development partners, led by Australia (23%), the Asian Development Bank (18%), the World Bank (12%), Japan (11%), and China (11%). Fiji has one of the lowest levels of donor concentration in the Pacific, with its incoming ODF coming from a variety of bilateral and multilateral sources.

ODF in Fiji was largely in line with regional trends in terms of sector distribution. Fiji’s only sectoral outliers relate to its higher level of incoming humanitarian assistance and spending on industry, mining, and construction. Distinct from regional trends, infrastructure spending declined in Fiji in the mid-2010s, only increasing in the wake of the pandemic.

Since 2008, Fiji has received $160 million in development financing with a “principal” focus on either climate adaptation or mitigation. Over this same period, the country has seen $783 million in development financing with a “significant” focus on climate outcomes. Since the early-2010s, Fiji has seen steady growth in climate-targeting projects, a trend mirrored across most of the Pacific. As a share of total ODF received by Fiji, “principal” climate projects make up 9% of total spending, in line with the Pacific regional average. Spending on “significant” climate projects in Fiji makes up 16% of incoming funds, above the regional average of 13%. To date, the largest climate ODF investment in Fiji has been the Fiji Urban Water Supply and Wastewater Management Project financed by the Green Climate Fund.

Between 2008 and 2022, Fiji received $337 million in development financing with a “principal” focus on gender equality, and $1.2 billion in development financing with a “significant” focus on gender equality. “Principal” gender equality financing constituted 8% of ODF received by the country, well above the regional average of 2%. Notably, “significant” marked gender financing made up 27% of incoming ODF, above the regional average of 21%. The largest project directly targeting gender equality in Fiji was the multi-year $44 million Pacific Women Shaping Pacific Development program, funded by Australia.