Forestry Sector Injects Over $66 Million Net Income into the Economy
Fiji’s forestry sector injected about $66 million net income into Fiji’s economy in 2020. This included export earnings of $76 million and an import value of $9.3 million.
And, out of the $76 million of export earnings, 74 percent or $56.7 million was injected within five months from August 2020 when the Ministry introduced its on-line export and import license permitting system.
The Ministry of Forestry, on behalf of Government, wishes to thank the stakeholders in the sector for their efforts to reignite the economy and create employment opportunities.
Permanent Secretary Pene Baleinabuli said the export revenue generated in the 12 months to December 2020 is largely from the sale of pine chips to Japan, and pine timber of all sizes by the Fiji Pine Group of Companies. The revenue also includes mahogany products like sawn timber, decking and flooring which are exported to the Dominican Republic, New Zealand, Australia and the United States of America. They also include some native and exotic timber species.
Mr. Baleinabuli said last year’s export revenue is a promising sign for the sector because it far outweighed imports by over $66 million.
“The preference for any country is to increase exports and decrease imports. And the forestry sector is showing that it can do this through downstream processing, and by importing only the products that we cannot produce locally due to technical specifications and the need to use specialised machines like those for certain thickness of ply-board,” he said.
He said in keeping the exports high and the imports low, the stakeholders in the forestry sector are doing all they could to keep local jobs afloat and reignite the economy, especially given the impacts of COVID-19 and the series of natural disasters.
“The results of the past year are hugely encouraging because it is an increase of net income over the past decade when the net income was less than $40 million annually, which in turn constituted about 0.2 percent of Fiji’s annual Gross Domestic Product. Last year’s results should see an increase in the forestry sector’s contribution towards the national GDP,” he said.
He commended the efforts of the Fiji Pine Group of Companies, the leading player in the sector.
“We are greatly encouraged with the Fiji Pine Group of Companies for its efforts to keep the economy growing. They did not lay off any staff during the difficult financial period and continued to maintain its markets while exploring new markets. And we are now seeing very positive results – the group has secured a market for pine chips in China while also maintaining its Japanese market,” he said.
He said the Fiji Hardwood Corporation Limited is also picking up quite well given that a significant amount of products exported were mahogany products. He also acknowledged the private companies and individuals who have made the effort to promote Fiji’s forestry products.
Companies like Yavutu ni Vanua Investment Pte Ltd which exported 26 cubic metres of kiln dried mahogany products with a value of $37,552 to New Zealand in August of last year. It was the first company to use the on-line export license permitting system.
A World Bank Report in 2020 compared business regulations in 190 economies, and revealed that Fiji ranked 102 in the Ease of Doing Business category. The report stated that among the 10 economies that advanced the most, efforts were focused on the areas of starting a business, dealing with construction permits, and trading across borders. In general, economies that scored the highest shared several features, including the widespread use of electronic systems and online platforms to comply with regulatory requirements.
Mr. Baleinabuli said that the Ministry of Forestry is making some progress in the area of electronic systems through its online application for export and import permits.
He said the online export and import permit application process enables decisions to be made within 24 to 48 hours.
Since introducing its online system in August 2020, the Ministry facilitated over 200 export licenses which fetched over F$56.7 Million. So, out of the $76 million of export revenue, 74 percent was generated within five months of the on-line system.
“This goes to show that the introduction of the online application system has been of great help,” Mr. Baleinabuli said.
“This is part of Government’s reform efforts especially in facilitating the ease of doing business across all sectors.”
He said the Ministry is continuing to invest in electronic systems and technology and hopes to extend the online system for harvesting licenses. This is work in progress and we hope to launch this in next few weeks.
Mr. Baleinabuli said it is vitally important to be able to provide an enabling environment for the private sector as it is the engine of economic growth.
“The private sector employs people and pays taxes. So, the thinking in the Ministry of Forestry is to shift quickly towards facilitating the work of the stakeholders in the forestry sector,” he said.
He said another important development in the Ministry now is to help Fiji have a better appreciation of its forest resources.
“This is happening now through a National Forest Inventory which is crucial to informing Government and the stakeholders on how we can better manage our resources to cater for the immediate period and also for the future.”
The NFI is scheduled to be completed by July with the report ready towards the end of this year.
Whilst the Ministry is coordinating the NFI, it is also continuing to work with stakeholders in reforesting degraded lands and forest areas.
“It is pleasing to note that on this count, Fiji’s tree-planting revolution is helping to balance the use of our forests for timber and our replenishment to help address climate change, protect the environment, enhance ecosystem services and biodiversity, while also facilitating our need for socio-economic development.
“It is absolutely logical to be planting and growing trees for the myriads of benefits they provide, and Fiji’s signing of the carbon trade arrangements with the World Bank provides another opportunity for the country,” he said.
Fiji’s national tree-planting and growing initiative which was launched by His Excellency the President in January 2019 has seen the planting of about 6.5 million trees. These include the trees planted by the communities, civil society organisations, and faith-based organisations in coordination with the Ministry of Forestry and trees planted by key stakeholders in the forestry sector especially Fiji Pine Limited.
The number of trees planted by the various stakeholders is another hugely encouraging sign that our Nation is on the right path towards addressing climate change while also trying to grow our economy,” he said.
“The act of growing the economy from the forestry sector and maintaining a strong balance with nature is something that the Government holds very seriously. And we thank all stakeholders out there who are helping with the national efforts,” he said.