THE Government has been found to have anti-competitive biases that hamper economic growth due to its ownership in certain companies. And it needs to fully map out the extent of this ownership to help it roll back its involvement from areas where private companies can compete and be profitable.
This was part of the findings of the World Bank in its inaugural Fiji Country Economic Memorandum (CEOM) launched in Suva last week.
“It’s important to limit the state ownership to sectors where state presence is needed and where there is very limited possibility of attracting private sector to invest in,” World Bank senior economist Mehwish Ashraf, who led a World Bank team of over 30 staff over a period of “a couple of years” to compile the Fiji CEM, said at the launch.
“It’s also important to think at the same time on divesting or liquidating some businesses of the state that are operating in sectors where firms can be viable, private firms can come and invest, but also more importantly, if they are loss making, they’re basically a drag on government’s balance sheet.
“So it’s important, that if they are in competition, first if they’re in competitive sectors or contestable sectors. And the second condition is if they are loss making, then there is no other way than to divest or liquidate those or open them up for private firm participation.
“That will redirect some of the State aid that’s going to these businesses to more productive use.
“Our analysis showed that one per cent of GDP from your fiscal budget could be freed as a result of that, and that could be used to improve your investment, for instance, public investment, public infrastructure.
“So there could be a good use of this one per cent of GDP for higher growth rather than for unproductive uses right now for, especially if it’s going mostly into loss-making state-owned enterprises and other businesses of the state,” Ms Ashraf said.
Using a new methodology to determine state involvement in the economy, where even firms indirectly owned by the State qualify as a “Business of the State” (BOS), the World Bank found Fiji’s ownership footprint to be much bigger than if only state-owned enterprises were considered.
In 2019, Fiji’s ownership footprint extended to 59 domestic business entities, where the Ministry of Communications held 18, another 12 were linked to the Fiji National Provident Fund, seven were in the books of the Ministry of Finance and four linked to the Ministry of Agriculture.
Other notable holdings included the Ministry of Public Enterprises, the Ministry of Tourism and Civil Aviation and the Ministry of Forestry.
“The suggestion from our side is to basically map out the full state ownership,” Ms Ashraf said.
“Right now the data is very fragmented and limited. So it’s important to do that as a first step.”
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Note: This article was first published under the headline: 1% of GDP locked in SOEs in Page13 of the print version of The Fiji Times dated Monday September 22, 2025
