ECONOMIC

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R000800280001-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: February 12, 1999
• Sequence Number: 1
• Publication Date: July 7, 1953
• Content Type: REPORT

? 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