Download Growing Fiji’s Manufacturing Sector

Growing Fiji’s Manufacturing
Sector
A presentation at the Fiji Business Forum
Suva
4-Jun-2011
Factors enabling Manufacture
• Land
– Raw Material
• Labour
– Intelligent workforce
– Cost-effective
• Capital
– Equipment, Plant & Machinery
• Entrepreneurship
• Market Access
Where we have a natural advantage
• Raw Material proximity:
– Timber / wood (furniture)
– Agri processing (sugarcane, pawpaw, pineapple, dalo,
cassava, coconut, ginger, tobacco, herbals)
– Processed Marine based (e.g., Starkist)
– Mining & minerals (incl cement?)
– Water
– ‘Natural / Eco’ (organic, bio-tech)
– Dairy, meat & poultry processing
Fiji's Import of Wooden Furniture
$14.35 m
16
14
Jan-Sep
$10.76 m
FJ$ million
12
10
8
6
$2.32 m
4
2
Source: Fiji Bureau of Statistics
2001
2009
Where we have a natural advantage
• Raw Material proximity:
– Timber / wood (furniture)
– Agri processing (sugarcane, pawpaw, pineapple, dalo,
cassava, coconut, ginger, tobacco, herbals)
– Processed Marine based (e.g., Starkist)
– Mining & minerals (incl cement?)
– Water
– ‘Natural / Eco’ (organic, bio-tech)
– Dairy, meat & poultry processing
Other advantages / reasons
• Non-price competition:
– ‘Fiji’ – perception of pure & unspoiled (can we do herbals?)
– Consumer culture similar to PICs and A&NZ (comfort in dealing,
quality and disclosure standards)
• Strategic:
– Food security (Oxfam prediction)
– Trade Balance & forex imperatives
– Employment & income generation
• Based on EPAs, RTAs:
– TCF
• Historical: entrepreneurial daring
What we DON’T always have
• Large domestic market
• Economy of scale
• Labour Productivity
• Adequate supply of skilled tradespeople
• Access to R&D / Technology
• Geographic / Logistic convenience
Why we need to continue with Manufacture
• Spine of sovereignty
• Value addition opportunities / backward
integration / market access
• GDP growth
• Multiplier Effect
• Flow-on effect
• Employment & Income generation
Why Americans can’t find
Jobs…*
John Smith started the day early having set his
)for 6 A.M.
alarm clock (Made in Japan
While his coffeepot (Made in China
he shaved with his electric razor
(Made in Philippines
)
* - source unknown
)was perking,
) , his
He put on a trendy shirt (Made in Sri Lanka
) and tennis
designer jeans (Made in Singapore
shoes (Made in Vietnam )
After cooking his breakfast in his new electric skillet
(Made in India ) , he sat down with his calculator
to see how much he could
(Made in Mexico
)
spend that day.
) to the radio
Setting his watch(Made in Taiwan
(Made in India ) , he got into his car
(Made in Germany ), filled it with gas
(From Saudi Arabia
) and continued his search
for a good paying AMERICAN JOB
.
At the end of yet another discouraging and fruitless
),
day checking his computer (Made in Malaysia
John decided to relax for a while.
He put on his sandals (Made in Brazil ),
poured himself a glass of wine
(Made in France
), turned on his TV
(Made in Korea
) and wondered why he can't
find a good paying job in AMERICA
.
AND NOW HE'S HOPING HE CAN GET
SOME HELP FROM HIS PRESIDENT…
( Made in Kenya
)
Industry %
to GDP
Industrial
Growth
Forex
Reserves
Ranking
Foreign
Direct
Investment
Ranking
Brazil
29%
4.4%
7
16
Russia
41%
1.9%
3
12
India
29%
4.8%
5
29
China
49%
10.7%
1
5
Mauritius
25%
5%
110
Fiji
13.5%
2.5%
~ 132
Therefore:
What will help ….1
• Continuing tariff support (small domestic market & no economies of
scale)
• Cautious approach on EPAs with countries that are ‘kicking away
the ladder’
• Recognition of our size & limitations when mingling with
manufacturing giants
• National focus on Productivity & Quality
– Skill based National Training Plan
– Quality initiatives
– Enabling IR environment
• Improved infrastructure (roads, bridges, electricity, water, telecom)
What will help ….1
• Continuing tariff support (small domestic market & no economies of
scale)
• Cautious approach on EPAs with countries that are ‘kicking away
the ladder’
• Recognition of our size & limitations when mingling with
manufacturing giants
• National focus on Productivity & Quality
– Skill based National Training Plan
– Quality initiatives
– Enabling IR environment
• Improved infrastructure (roads, bridges, electricity, water, telecom)
• Stability / predictability in Taxes & Legislation
What will help ….
2 too!
• Long Term Industrial Policy (LTIP) based on competitive advantage/
strategic needs (FEDB ?) and a consultative process
• Trade delegations & overtures based on LTIP (publicity / leaflets
based on that)
• Tax Free Zones in viable areas of Viti Levu (Naitasiri, Tailevu,
Namosi, Rakiraki)
• Forced value addition?
• Price controls that encourage investment
• Control over imports / level playing field on contents (fortification,
NIPs, ingredients)
• Encouraging display of Local products
• Continue export incentives
• Job creation subsidy
What will help ….
2 too!
• Stability / predictability in Taxes & Legislation
• Long Term Industrial Policy (LTIP) based on competitive advantage/
strategic needs (FEDB ?) and a consultative process
• Trade delegations & overtures based on LTIP (publicity / leaflets
based on that)
• Tax Free Zones in viable areas of Viti Levu (Naitasiri, Tailevu,
Namosi, Rakiraki)
• Forced value addition?
• Price controls that encourage investment
• Control over imports / level playing field on contents (fortification,
NIPs, ingredients)
• Encouraging display of Local products
• Continue export incentives
• Job creation subsidy
Vinaka vakalevu