The Asian Development Bank has warned that thousands of jobs are expected to be lost in key industries in Fiji over the next few years.
The ADB has also warned that low levels of growth forecast from now until 2008 will not be able to make up for the shortfall.
The Fiji Times reports that the comments are made in the ADB's Country Strategy and Program Update for Fiji released yesterday.
It says investment levels in Fiji are substantially lower than the average for other developing countries.
The ADB says to a large extent political instability has caused the lower than desirable levels of investment, which is a major growth constraint.
It says the government's effort to pursue necessary reform is constrained by the coming general election.
Yesterday, the ADB announced that it was prepared to lend Fiji 125-million US dollars for five projects to upgrade roads, develop rural and outer islands, rehabilitate airports and develop the natural resource base and renewable energy.
The chief executive of the finance ministry, Paula Uluinaceva, says external factors are limiting growth efforts and forcing sharp declines in garments and sugar.