Private sector ‘engine of growth’

A HEALTHY and vibrant private sector is key to growing any economy.

While appearing on The Fiji Times online news platform The Lens@177 this week, University of the South Pacific (USP) senior lecturer in economics Dr Neelesh Gounder said the private sector was really the “engine of growth” in any economy.

It was also where goods and services were not only produced but distributed by the private sector and consumed by households. Thus, most of the economic activity happened within the private sector.

“If we want to grow the economy, increase GDP, or grow the GDP, it’s important to ensure that the private sector is growing,” he said.

“The public sector, the government, provides the rules, regulations, and framework within which interaction and economic activity take place.

“Governments intervene to provide public services and build and invest in infrastructure which the private sector is generally not willing to do.

“The public sector, the Government has a specific role and the private sector contributes to the broader economic activity.

“It’s very important to ensure that we have the right rules, regulations, and policies in place for the private sector to grow.”

In Fiji, Dr Gounder said the majority of the businesses were small and medium-sized enterprises and they were an integral part of the economy.

He also stressed that these SMEs should continue growing.

“When businesses grow, they employ more people. As they employ more people, household incomes increase and the sustained source of income also increases.

“Growing the private sector is really the most important way to grow the economy, ensure that GDP is growing, household incomes are increasing, which will have the impact of reducing poverty. “So private sector growth is really important in terms of growing the economy.”