Business Environment in Fiji

Fiji business environment is a combination of several factors that govern the business and trades of this island nation. Fiji business environment is generally good and promising for taking initiative of new ventures apart from some occasional disturbing factors. Fiji is one of the most progressive island nations in the central south of Pacific Ocean. It has many industries and other natural resources that help together to make a good business environment in this country. But Fiji faces a number of troubles also in the business sector. There are some political strife in the country that has originated from the clash between the cultural communities belonging to different ethnicity. Moreover, Fiji has some other problems also which are not favourable for creating a sound business environment in Fiji. Some of these problems are, natural disasters, deficiencies of sound economic plans and some others. But overall, Fiji business environment is good and promising enough for further developments. Business is affected by the external environment as it is by the competitors. It is important that firms are aware of the changes in the external environment to be successful. Understanding the influence of Macroeconomic factors helps the firms to determine the current market conditions and how beneficial will they be for the success of their business. Various macroeconomic factors that influence the business are: Macroeconomic factor a. Economic Growth. Economic activities refer to the level of buying and selling activities happening in an economy over a time period. Economic activity changes could happen due to the following reasons: †¢Changes in income levels †¢Future prospects of individuals. †¢Future of the economy †¢The level of economic activity in the world as a whole †¢Political activities around the world †¢Natural disasters – like hurricanes, earthquakes, or flood etc †¢Changes in prices of raw materials – oil, metals, fuel, energy and so on †¢Changes in world stock markets b. Inflation: With the increase in Inflation there will be an increase in the level of prices of products and services over a specific period of time. As a result the firms will have to incur higher costs of operations. This will be also due to the increase in wages of the employees. c. Interest Rates: Interest rates are the charges levied by the banks for lending a loan. Increase in Interest rates will directly influence the business as businesses borrow money from the banks from time to time. Increase in interest rates will lead to higher interest expense: Businesses will have to incur higher costs to repay the loan. Interest rate changes also affect customers who in turn will affect the business. In case of increase in interest rates the amount that individuals need to pay to borrow the money will increase thereby, reducing the demand for large products in the market. Further, if the interest rates decrease then the charges on a loan to buy larger items like cars, electrical equipments are likely to fall. As a result, a large number of people might be willing to buy such items. There will be a sudden increase in the demand for the products offered by such businesses.