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Developing economies face many challenges, such as severe poverty, high youth unemployment, gender inequalities, low agricultural productivity, skill deficiency, informal employment, and emigration. A sustainable employment policy is required to deal with these issues and to unleash the full potential of workforce skills and talents available in the country by improving the functioning of the labour market, minimising imbalances in the labour market, and enhancing the productivity of available workers. This paper designs an employment policy for Fiji based on its socio-economic background and labour market conditions. This exercise for Fiji illustrates the procedures to be undertaken in formulating employment policy for any other small island- or developing country.