Claunch Foresees More Investment Opportunties
Promise of democracy opens up investment opportunities in Fijihttp://www.fdiintelligence.com/Locations/Asia-Pacific/Promise-of-democracy-opens-up-investment-opportunities-in-Fiji?ct=true10/02/2012 1:44 pm | (0 comments)|Political tensions have long kept Fiji off the investment map, making it difficult for the country to capitalise on its natural beauty and its bountiful resources. But with martial law lifted at the beginning of 2012 and the promise of free elections in the coming years, can Fiji convince the rest of the world that it is finally a safe place to invest?
Larry Claunch has one of the world’s most breathtaking commutes into work. The American businessman, who moved to Fiji 10 years ago and owns four islands in the northern reaches of country, flies several times a month by private seaplane over the exquisite greenish-blue waters for business meetings on Fiji’s main island, Viti Levu. While Mr Claunch openly admits that he loathes leaving his private paradise, Bekana Island, he is excited about the casino licence that his company, One Hundred Sands, was granted for Denarau Island by the Fijian government in December 2011.
It is the first gaming licence that the Fijian government has given and it means that One Hundred Sands will hold the exclusive rights to operate up to three casino gaming facilities in two locations. The F$290m ($164.75m) investment will break ground in March 2011, on Denarau Island – close to the country’s main airport in Nadi – and will include 2700 square metres of casino space, 500 slot machines, 57 game tables and an exclusive 160-square-metre area for high-stakes gaming.
The luxury property – at the end of an island that is already home to exclusive hotels such as Sofitel, Hilton and Westin – will also include 190 hotel rooms and villas, a 1500-seat conference space, an outdoor amphitheatre, two pools, two bars and a nightclub. A second phase of the resort will add an extra 200 hotel rooms, golf course apartments and a themed water park.
Catering for a crowd
Another advantage of the project is that Fiji does not currently have any large conference facilities, which has meant that opportunities in the conferences sector have had to be turned down in the past. “One company from India wanted to have a film industry awards show here but we could not do that because we did not have the facilities. Now we can have all sorts of events,” says Aiyaz Sayed-Khaiyum, the country’s attorney general and minister for justice, anti-corruption, public enterprises, communications, civil aviation, tourism, industry and trade.
Conference facilities will also mean that during the off-seasons – the first few months of any given year, and between August and October – One Hundred Sands can focus on conferences, which will create spillover into other hotels. “Pre- and post-[event] programmes are also really big selling points for conference planners,” says Mr Claunch. “So I think that is definitely going to help change tourism here.”
While Fiji may be an island paradise for holidaymakers, tourism represents only one-third of the country’s GDP. The political situation over the past two decades has caused investors to view the country with caution. Since 2006, Fiji has been under military rule, with the commander of the Fijian military forces, Josaia 'Frank' Voreqe Bainimarama, acting as president and Mr Sayed-Khaiyum acting as civilian deputy.
Since gaining independence from the UK in 1970, Fiji has gone through four coups, leading to concern that the country suffers from a 'coup cycle'. All four coups have been bloodless and have revolved around the ethnic tensions between Indo Fijians – who make up almost 40% of the population – and indigenous Fijians. The issues date back to the late 19th century, when the British brought Indian labourers to work in Fiji's sugar cane fields. Sugar cane is still Fiji’s most important crop and a significant contributor to the agriculture sector, which accounts for nearly 20% of the country’s GDP.
While Fiji's current government still has sanctions against it in countries including Australia and New Zealand, and has not been reinstated back into the Commonwealth after its suspension in 2009, there are strong signs that things are changing in a more positive direction from within. In January 2012, the government lifted a state of martial law that had been in place since 2009, while Mr Bainimarama has stated that there will be free elections held on or before September 2014 and that consultations are currently taking place regarding the creation of a new constitution, which will come into play by early 2013.