THE ongoing conflict in the Gulf region is creating significant global economic uncertainty, raising concerns about the potential financial and economic repercussions for Fiji and other Pacific Island nations.
This was highlighted by the Fiji National University’s (FNU) College of Business, Hospitality and Tourism Studies (CBHTS) Acting Head of Department of Economic Development and Sustainable Studies, Ashwin Deo, while speaking about the ongoing conflict in the Gulf region.
He added that escalating geopolitical tensions in the Gulf could disrupt global supply chains and place pressure on food security across 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. The region’s strong dependence on tourism further heightens its exposure to external economic shocks.”
Deo noted that although Pacific Island countries primarily source most of their fuel imports from suppliers in Asia, particularly Singapore, it can still have significant ripple effects. A major concern stems from potential disruptions to oil supply routes, particularly through the Strait of Hormuz, one of the world’s most critical maritime chokepoints for global energy transport.
“Any disruption in this region has the potential to drive global fuel prices higher, which will inevitably affect transport costs, trade, tourism, and overall economic activity in Pacific Island countries,” he said.
Deo further explained that Pacific nations import substantial portions of staple foods and agricultural inputs, making them particularly susceptible to global supply chain disturbances.
“Disruptions in shipping or delays due to rising fuel prices could exacerbate vulnerabilities in local supply chains. In extreme scenarios, a total restriction of the Strait of Hormuz would not only elevate energy costs but also impede imports of fertilisers, machinery, and processed foods, creating cascading risks for domestic agriculture and food availability,” he highlighted.
From an economic perspective, Deo emphasised that diversification and resilience remain key buffers against global shocks, saying, “Fiji’s heavy dependence on tourism emphasises the need to expand alternative sectors such as fisheries, domestic agriculture, digital services, and renewable energy.”
“In the face of potential fuel constraints, flexible work arrangements, including work-from-home options, could help reduce commuting fuel demand. At the same time, remote work and global digital connectivity offer opportunities for service-based revenue streams, reducing reliance on physical travel and external demand.”
Meanwhile, Head of School of Economic Development and Border Management, Melvin Chand, stressed the importance of strengthening domestic capacity in food and energy production to reduce external vulnerabilities.
“We need to encourage local food production, diversify our trade partners globally, and maintain prudent fiscal and monetary policies. Developing diversified economic sectors and improving supply chain resilience would help reduce Fiji’s reliance on tourism-related activities while strengthening national economic stability,” Chand said.
Chand also highlighted the importance of a coordinated response from governments, policymakers, producers, and consumers to manage economic shocks effectively.
“Timely and coordinated interventions can help reduce the impact of sudden price increases while protecting vulnerable populations from economic hardship. These measures will help Fiji and other Pacific Island nations enhance economic resilience, safeguard livelihoods, and maintain stability amid ongoing global geopolitical and economic uncertainties,” he said.
Source: FNU Media