The latest International Monetary Fund Staff Report on Fiji stated that spending on wages and salaries for civil servants is relatively high in Fiji.

The report stated that the central government wage bill is over 10 percent of GDP but the share total of spending on wages and salaries which is nearly 40 percent, is relatively high.

The IMF said this reflects both high pay rates and the sizable civil service.

It also said the ratio of civil servants to the population is above comparator countries.

The report further stated that the Fiji authorities have taken some steps to reduce the number of civil servants.

It said the retirement age was reduced from 60 to 55 years in mid 2009 releasing 2,200 officials which was 7 percent of civil servants but it stated that 40 percent of these vacancies have already been filled.

Following meetings with Prime Minister Commodore Voreqe Bainimarama, Attorney General Aiyaz Sayed-Khaiyum, Reserve Bank of Fiji Governor Sada Reddy, Permanent Secretary for Finance John Prasad, other senior officials and donors, the IMF Staff Report stated that Fiji's water, procurement and printing services are being corporatized which will make 1,000 staff redundant.

At the time when the discussions were held, the IMF report said the Fiji authorities are planning a study on right-sizing government this year.

It said the aim is to reduce the wage bill and increase the efficiency of government services by focusing on core functions including health and education.
 
The IMF Staff Report stated that international experience suggested that these reforms should be comprehensive, with a well-designed redundancy package and retraining provided to laid-off workers.

It also suggested that the performance based pay system for civil servants should be a key component.   

Meanwhile, the Fiji authorities expressed interest in the IMF program to support structural reform and help fill a financing gap of more than $US500 million projected for 2010 to 2012.

Discussions are expected to be held on this issue when an IMF delegation visits Fiji in the next few weeks.