Government will tread carefully when it comes to the privatisation of State-owned assets, said Deputy Prime Minister and Minister for Tourism and Civil Aviation Viliame Gavoka.
“I still have my reservations,” he said, following the launch of a new report from the Asian Development Bank, which studied the financial performances of State-owned enterprises (SOEs) of nine countries in the Pacific.
An Option
The report recommended privatisation as an option for improved performance.
“There are some strategic assets that we still need to be in control of.
“There are some small ones that still need the support of the government.
“F0iji Rice is one example.
“It still needs government support,” Mr Gavoka said.
Partial Privatisation
Fiji’s country profile included a portfolio of 19 State-owned enterprises, in which the Government has majority ownership.
“Partnerships with the private sector, through full or partial privatisation, supported by robust regulatory arrangements, are the most effective mechanisms for long-term improvement in State assets’ productivity,” the report said.
“Where full privatisation is not politically feasible nor the most suitable reform mechanism, partial privatisation – such as public listings, joint ventures, and public–private partnerships [PPPs], can help improve SOE performance.”
Misconception
Co-author of the report Laure Darcy said reducing government control in an SOE did not necessitate loss of control over the entity.
“There’s always the misconception that when you privatise, the people will suffer because prices will go up, and there will be no way to help poor people,” Ms Darcy said.
The government has tools to help target segments of the population, with reduced cost for services.
“They can always do that…and contract Energy Fiji Limited or any other provider to provide services at a reduced cost.
“The government doesn’t give up its ability to provide subsidies if it wants to, by privatising.”
Ms Darcy said there was a lot of power in regulating and determining what a sector would look like, whether it would allow competition or private investment.
Fiji’s 19 State-owned Enterprises
In 2021, Fiji’s 19 State-owned enterprises were valued at $4.2billion, according to the report.
The State-owned enterprises are:
- Energy Fiji Ltd,
- Airports Fiji Ltd,
- Fiji Pine,
- Fiji Airways,
- Fiji Development Bank,
- Fiji Broadcasting Corporation Ltd,
- Yaqara Pastoral Company Ltd,
- Post Fiji Ltd,
- Housing Authority,
- Public Rental Board,
- Unit Trust of Fiji (Management) Ltd,
- Air Terminal Services,
- Pacific Fishing Company Ltd,
- Fiji Rice Ltd,
- Fiji Public Trustee Corporation Ltd,
- Food Processors (Fiji) Ltd,
- Fiji Meat Industry Board,
- Copra Millers of Fiji, and
- Fiji Sugar Corporation.
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