The ongoing conflict in the Gulf region is prompting economic concerns in Fiji and across the Pacific Islands, with potential disruptions to fuel supplies, trade, and tourism, according to Fiji National University (FNU) experts.
Ashwin Deo, Acting Head of Department for Economic Development and Sustainable Studies at FNU’s College of Business, Hospitality and Tourism Studies, warned that escalating geopolitical tensions could disrupt global supply chains and exacerbate food security challenges in the Pacific. “Although geographically distant from the Middle East, Fiji and its Pacific neighbours remain vulnerable to global disruptions due to their heavy reliance on imported fuel, food, and other essential commodities,” Deo stated.
Fiji’s dependence on tourism makes it particularly susceptible to external economic shocks, Deo added. While Pacific nations primarily source fuel from Asia, particularly Singapore, any disruption to global oil supply routes – especially through the Strait of Hormuz – could significantly impact the region. The Strait of Hormuz is a critical maritime chokepoint for global energy transport, and any interruption there could drive up fuel prices, affecting transport costs, trade, tourism, and overall economic activity.
The Pacific Islands as well rely heavily on imported staple foods and agricultural inputs, making them vulnerable to supply chain disruptions and rising shipping costs. Rising fuel prices and potential delays in shipping could worsen these existing challenges, according to Deo.
Deo suggested that Fiji needs to diversify its economy to reduce its reliance on tourism, advocating for expansion in sectors such as fisheries, domestic agriculture, digital services, and renewable energy. He also proposed that flexible work arrangements, including remote work, could help reduce fuel demand, while improved digital connectivity could create new income opportunities less dependent on travel.
Melvin Chand, Head of School of Economic Development and Border Management at FNU, emphasized the importance of strengthening domestic food and energy production. He called for encouraging local food production, diversifying trade partnerships, and maintaining sound fiscal and monetary policies to mitigate external risks. Chand stressed the need for a coordinated approach involving governments, policymakers, producers, and consumers to effectively manage economic shocks.
The concerns come as the conflict in the Gulf region continues, creating global economic uncertainty. The potential for increased fuel prices and supply chain disruptions is being closely monitored by Pacific Island nations as they assess the potential impact on their economies.
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