4. MANPOWER SITUATION IN RELATION TO THE ECONOMY

It goes without saying that one very important pre-requisite for industrial and commercial development is training in the appropriate skills required for growth to take place in this broad sector. Other important ingredients include investment capital, infrastructure, political stability, incentives, labour costs, trade agreements, market demand and so on. While all these together serve to determine the nature of the economic environment in any one of the small island countries in the Pacific and gives account of the potential for the economy to grow, only training will be considered in this brief study.

Fiji's economic and manpower situation, which had by 1986 begun to achieve a state of stable growth, with the size of the pool of available skills large enough to sustain a small but steady growth rate in the economy, changed abruptly in 1987. The two coups of that year interrupted a relatively long period of political stability, dynamited a steadily growing economy, and led to a sudden and virtual halt in both local and overseas public and private sector investment, with marked reduction in employment and incomes. What it did most of all, however, was to create the very urgent need for initial training, retraining and skills upgrading because of the relatively enormous chasms in the workforce created by the massive outward migration of skilled workers.

The two most salient features of the manpower situation following the coups of 1987 are, first, that they resulted in the emigration of between 5000-6000 persons per year up to 1990 of whom more than half of the economically active emigrants were occupationally classified as professional, technical, administrative, managerial and supervisory personnel. This pattern of emigration is said to have continued into 1992 and 1993 although at a slower pace.

The second and more significant feature of the manpower situation since 1987 is the distinct and very deliberate shift in the Fiji Government's economic development strategy from an inward-looking, self-sufficiency and import-substitution approach with all its inefficiencies, toward a more outward-looking, export-oriented approach designed to transfer the responsibility for economic development from the public to the private sector, thus making competitiveness the key objective. For this transition to take place efficiently and effectively therefore, training has had to take priority.

The foundation for this new approach by Government was laid down in a series of statements issued at the National Economic Summit held in May 1991 in which government undertook to:

(a) pursue a programme of deregulation, including the termination of import licensing, the phased reduction of tariffs and reform of the tax system, and the introduction of a Value-Added Tax in 1992;

(b) restrain growth in the public sector and public sector spending to ensure availability of resources for private sector growth;

(c) reduce its role in commercial activity by corporatization and eventually privatization of public enterprises such as the Posts and Telecommunication Department and the Fiji Broadcasting Commission;

(d) institute policies to seek the development of a labour market that is more responsive to market conditions in different industries; and

(e) encourage ethnic Fijians to play a greater role in the economy thereby widening the entrepreneurial base and therefore competition within the economy.

This economic development strategy has resulted in changes in the economic structure. As the economy has opened up and protection fallen, certain sectors which survived under protection are now beginning to face international competition in the face of which the less competitive producers are being forced to become more efficient or be driven out of business.

Deregulation has allowed competitive areas to develop, as resources move out of less competitive areas and are becoming available to more efficient and dynamic enterprises. In the search for competitiveness new and more efficient technologies are being introduced, new products manufactured, and new markets are being sought. The tax-free factory (TFF) and tax-free zone (TFZ) scheme are already contributing to this development.

As growth is driven more by private sector investment the need for new knowledge and skills is becoming more and more urgent. Fiji's requirements in this area would probably be more severe at this stage by comparison with other small Pacific Island Nations for two reasons:

(a) the substantial loss in skills and in private sector expertise that Fiji continues to face as a result of the coups resulted in manpower replacement levels far higher than at anytime in the past; and

(b) the rapid change in direction of Government's economic development strategy since 1987 and the consequent changes in technology and composition of output has necessitated not only increases in manpower requirements, but also changes in composition of the workforce and superior management skills.