Oral Question – 64/2026: Can the Prime Minister update Parliament on the Millenium Challenge Co-operation recently signed between Fiji and the United States of America-(25-05-2026)

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Can the Prime Minister update Parliament on the Millenium Challenge Co-operation recently signed between Fiji and the United States of America

Salutations

  • Honorable Speaker Sir,
  • Honorable Ministers and Assistant Ministers,
  • Honorable Leader of Opposition,
  • Honorable Members of Parliament, and
  • Ladies & Gentlemen

Ni sa bula vina’a and a very good afternoon to you all.

  1. Mister Speaker Sir, I rise to respond to the question and I thank the Honourable member for this important question.
  2. At the outset, I wish to clarify that the agreement recently signed between the Coalition Government and the United States of America, through the Millennium Challenge Corporation (MCC), is the Compact Development Funding Agreement.
  3. This is not the final Compact Agreement itself, but rather an important preparatory arrangement that supports the development, analysis and design of a potential MCC Compact programme for Fiji.
  4. Mister Speaker Sir, the Millennium Challenge Corporation is an independent agency of the United States Government that partners with countries demonstrating commitment to good governance, economic freedom, institutional accountability and investment in their people.
  5. Fiji’s eligibility to develop an MCC Compact, announced in August 2025, represents an important milestone in Fiji–United States relations and reflects growing confidence in Fiji’s governance reforms, economic direction and development partnership agenda.
  6. This engagement is fully aligned with the Government’s overarching development priorities of strengthening economic resilience, improving national infrastructure, promoting private sector-led growth, creating employment opportunities, enhancing trade competitiveness and improving the overall ease of doing business in Fiji.
  7. Mister Speaker Sir, this initiative is also closely aligned to the Coalition Government’s broader economic transformation agenda of lifting Fiji’s long-term growth trajectory from the historical average of approximately 3.5 percent to 6 percent annual growth, as part of our pathway towards achieving high-income country status by 2050.
  8. Achieving this ambition will require sustained structural reforms across key sectors of the economy, particularly in areas that directly influence productivity, competitiveness, investment confidence, logistics efficiency and private sector expansion.
  9. The MCC process provides Fiji with an important platform to undertake targeted and evidence-based reforms that will strengthen the enabling environment for growth and allow Fiji to remain on a credible and sustainable path towards its long-term national development objectives.
  10. Mister Speaker Sir, this cooperation is also consistent with Fiji’s foreign policy approach of maintaining constructive and respectful partnerships with all countries, based on mutual respect, sovereignty, shared prosperity and development cooperation.
  11. Fiji remains committed to engaging with international partners in ways that support our national interests, regional responsibilities and long-term development aspirations.
  12. Mister Speaker Sir, Cabinet endorsed the Compact Development Funding Agreement in February 2026 and approved that the Minister for Finance, Commerce and Business Development execute the Agreement and any related documentation, on terms and conditions cleared by the Office of the Solicitor-General.
  13. The Agreement was subsequently signed on 28 February 2026 between the Government through the Ministry of Finance, and the MCC through the U.S. Deputy Secretary of State Christopher Landau.
  14. The Agreement provides up to USD$12 million in grant funding to support the development and preparation of a potential Compact programme.
  15. I wish to emphasise, Mister Speaker Sir, that this is grant funding. It is not a loan facility and therefore does not add to Government debt exposure.
  16. The funding will support technical analysis, stakeholder consultations, feasibility assessments, sector studies and the establishment of a dedicated Compact Development Team to work collaboratively with the MCC and relevant national stakeholders.
  17. Mister Speaker Sir, following the completion of the initial scoping and consultation phase, the Coalition Government has confirmed that the next stage of the Compact development process will focus on two strategic areas — Ports and the Business Regulatory Environment.
  18. These sectors are central to Fiji’s long-term economic transformation agenda and closely aligned with the National Development Plan and Government’s broader economic reform priorities and our ambition to position Fiji as a more competitive, efficient and investment-ready economy within the Pacific region.
  19. Improving port efficiency and maritime logistics is critical to strengthening Fiji’s position as a regional transport, trade and logistics hub. It directly affects the cost of doing business, export competitiveness, supply chain reliability, shipping efficiency, tourism connectivity and investor confidence.
  20. More importantly, Mister Speaker Sir, efficient ports and modern logistics systems are essential enablers of higher economic growth.
  21. For a geographically dispersed island economy such as Fiji, reducing logistics costs, improving cargo turnaround times and strengthening connectivity across domestic and international supply chains are fundamental to increasing productivity, expanding trade and supporting private sector-led economic activity.
  22. These reforms are therefore integral to Government’s objective of accelerating long-term growth towards the 6 percent target required to achieve high-income status by 2050.
  23. Similarly, reforms to the Business Regulatory Environment are essential to reducing administrative bottlenecks, improving transparency and consistency across Government processes, supporting local enterprise development and attracting quality domestic and foreign investment.
  24. The Coalition Government recognises that sustained economic growth cannot be achieved through public expenditure alone. It requires a strong and confident private sector, supported by modern, efficient and predictable regulatory systems that encourage entrepreneurship, innovation and investment.
  25. In this regard, the MCC reform process complements Government’s ongoing efforts to modernise regulatory frameworks, improve investor confidence, strengthen institutional coordination and create a more competitive business environment that supports economic expansion and job creation.
  26. Mister Speaker Sir, the MCC Compact development process is evidence-based and reform-oriented.
  27. It is not simply about identifying projects for financing. Rather, it seeks to identify the underlying structural constraints affecting economic growth and develop targeted, practical and sustainable solutions that can deliver long-term national benefits.
  28. As part of the current phase, the MCC and the Ministry of Finance are jointly undertaking a comprehensive Root Cause Analysis to better understand the underlying challenges affecting port performance and the business operating environment in Fiji.
  29. Consultations undertaken from 7 to 13 May 2026 on the Ports sector included workshops, focus group discussions and site visits to both the Suva and Lautoka Ports.
  30. These consultations involved representatives from Government agencies, Fiji Ports Corporation Limited, exporters, importers, shipping operators, cruise stakeholders, private sector representatives and other key users of port infrastructure and services.
  31. Preliminary findings from these consultations identified several areas requiring attention, including:
  32. long-term port planning;
  33. infrastructure and berth capacity limitations;
  • wharf and storage constraints;
  1. equipment and operational efficiency challenges;
  2. information management systems;
  3. workforce capability development; and
  • broader supply chain coordination issues.
  1. These challenges have direct implications for Fiji’s export competitiveness, the cost of imported goods and inputs, national productivity and Fiji’s broader ambition to strengthen its role as a regional logistics and maritime services hub.
  2. Mister Speaker Sir, consultations relating to the Business Regulatory Environment have focused on areas such as licensing systems, permitting processes, trade facilitation measures, investment approvals and inter-agency coordination mechanisms.
  3. Stakeholders consistently highlighted the need for greater efficiency, predictability, transparency and coordination across Government systems to better support business confidence, entrepreneurship, investment attraction and economic expansion.
  4. Mister Speaker Sir, these reforms are not isolated technical exercises. They form part of a broader national reform agenda aimed at improving the overall productivity and competitiveness of the Fijian economy.
  5. Streamlining approvals, reducing unnecessary compliance costs and improving coordination across agencies will help unlock greater private sector participation, stimulate domestic enterprise growth and attract higher levels of strategic investment into Fiji.
  6. The next phase of the process will involve the finalisation of the Root Cause Analysis and the development of detailed Concept Notes for the agreed priority sectors.
  7. These Concept Notes will define the key development challenges, identify the associated root causes and outline potential investment and reform pathways for further consideration.
  8. Subject to agreement between Fiji and the MCC, the identified areas may then proceed to more detailed feasibility assessments, engineering studies and project design work.
  9. Mister Speaker Sir, the Government will continue to work closely with the MCC, development partners, the private sector and civil society organisations throughout this process to ensure that outcomes are nationally driven, inclusive, sustainable and aligned with Fiji’s long-term development priorities.
  10. This initiative represents a positive and strategic opportunity for Fiji. It provides a pathway to address key structural constraints affecting trade, investment and private sector growth, while further strengthening Fiji’s economic partnership and engagement with the United States.
  11. It also reinforces the Coalition Government’s commitment to pursuing credible and sustained reforms that improve national productivity, strengthen economic resilience and position Fiji to achieve higher and more inclusive long-term economic growth.
  12. The MCC process therefore should not be viewed solely as a development financing initiative, but as part of a broader national transformation agenda aimed at modernising key sectors, unlocking private sector potential and supporting Fiji’s long-term pathway towards high-income country status by 2050.
  13. Ultimately, Hon. Speaker Sir, this partnership reflects Fiji’s broader commitment to pursuing practical, results-oriented and mutually beneficial international cooperation that advances national development, economic resilience and the wellbeing of all Fijians.
  14. Vinaka Vakalevu.
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