The Perils of Unmanaged Export Growth: The Case of Kava in Fiji

By Prasad, Naren; Raj, Shiu | Journal of Small Business and Entrepreneurship, Fall 2006 | Go to article overview

The Perils of Unmanaged Export Growth: The Case of Kava in Fiji


Prasad, Naren, Raj, Shiu, Journal of Small Business and Entrepreneurship


Introduction

Small island countries face significant challenges associated mainly with their small size, remoteness and vulnerability when trading and competing in the global market. Smallness combined with insularity has been synonymous with small domestic markets, and lack of scale economies, human capital and entrepreneurship. Recent empirical studies also show that small islands are in a disadvantaged position in doing business in the global market as a result of their inherent cost associated with smallness. For example, the cost disadvantage for (micro) islands in the manufacturing sector (clothing and electronic assembly) is 36% higher compared to a median-sized country, and 58% higher for tourism industry (Winters and Martins, 2004).

These issues lead us to ask how the business sector survives in these islands at all and the consequences that this may have on the consumer. In the South Pacific, the economy of small island countries is characterized by a large informal sector and widespread subsistence agriculture and fishing. Cultivation and export of indigenous root crops, export of some specialized agricultural products, fishing to supply foreign fishing fleets within territorial waters, prevalent but mainly small tourist sectors, small industries manufacturing products that are costly to transport, retail outlets, and at times substantial mineral resources exploitation are common economic activities in these islands (Asian Development Bank, 2004). Discussing the private sector in the small islands can also be misleading since there are only a few "big" businesses (mostly engaged in natural resource extraction or retailing); the very large majority of firms are small or micro livelihood businesses.

Armed with such evidence, can small island countries produce and export their goods and services competitively? Or, are they doomed to failure because of their size and geography? Despite their huge cost disadvantage, several island economies have managed to survive through trade, capitalizing on preferential trading agreements, using their sovereignty, developing small transient market niches which create quasi-rents, and through support from remittances and aid (Prasad, 2004). In fact, some small islands have excelled in small-scale, high-value products and have put to good use their island identity (Baldacchino, 2002). Recently, the concept of "resourcefulness" of small island economies has drawn attention from scholars. Baldacchino (1999a, 1999b, 2002, 2005a, 2005b) has done extensive research on this concept of uniqueness of small economies and their inherent political and economic capacities. There is a shift from focusing exclusively on vulnerabilities of small islands towards a more positive element of resilience of small islands.

This article looks into how small-scale informal sector activities in a small island country can propel a niche product in international trade. It explores how Fiji's small-scale farmers have contributed to the exports of kava in international markets and how it has affected their livelihoods. It also demonstrates how success can breed failure and why small island countries should be vigilant in order to stay competitive in the global market.

Fiji's Experimental Economic History

Fiji, independent since 1970, is an island archipelago in the central South Pacific, with Suva as its capital city, and a total population of 846,085 (Fiji Bureau of Statistics, 2006). Since its occupation by Europeans, Fiji's initial development has been based on the plantation colony model. Fiji had been trying to find its holy grail for exports as early as the 1850s, when it was already trading in coconut oil, tortoise shell, sandalwood and bechede-mer (Stokes, 1969). Westerners who had settled the country tried raising sheep and cattle, but cotton planting became successful in the 1860s (Seemann, 1861). It is worth remembering that Britain first became interested in Fiji for its potential of supplying cotton to the Empire as an independent source (rather than obtaining it from the United States). …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Perils of Unmanaged Export Growth: The Case of Kava in Fiji
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.