www.fijitimes.com
MERESEINI MARAU
Thursday, February 21, 2008
REMITTANCES from overseas had dropped by $64million last year, says Reserve Bank of Fiji governor Savenaca Narube.
He said the Reserve Bank would like to see lower remittances charges.
The Reserve Bank was exploring alternative ways of sending money to Fiji at a more reasonable charge.
Mr Narube said remittances had shot up since 2001 to a peak of $320m in 2006 to become the second biggest foreign exchange earner next to tourism.
"But last year they declined by about 20 per cent," he said.
Mr Narube said they believed the main reason for the drop was the number of security personnel in the Middle East that had tumbled significantly.
He pointed out another reason was families receiving remittances might have migrated.
The high transaction costs could also be a reason for the drop in remittances, Mr Narube believes.
He said many were resorting to sending money through mail or friends that were visiting the country.
"Those are not captured in the official statistics," he said.
Mr Narube said the exchange rate might also be a contributing factor as the US dollar had weakened against the Fiji dollar.
"All these reasons however may still not fully account for the $64m drop in remittances last year. There may be other technical reason which we are examining.
"These charges to do not appear to reflect the actual cost of remitting funds," he said.
In the current status, Mr Narube said the sender paid a lot of those charges which ultimately result in the receiver getting less Fiji dollars.
"And then at some outlets here in Fiji, the receiver gets slammed by another receiving charge."
He said in some cases, the charges amount to 50 per cent of the amount sent.
Mr Narube said the comparison of the charges internationally shows it cost $US10 to send money from the US to the Phillipines "but cost $US30 to send the same money to the Pacific."
"In my view there is no basis of these high charges."
Mr Narube said the Reserve Bank was in the process of collecting information on those charges and it intended to publish them for general information.
"We are also keen to mount an awareness program to educate people leaving our shores for work overseas and also the Fiji communities abroad on cheaper ways to send money to Fiji."
February 22, 2008
February 13, 2008
SDL company raised $1.7m
www.sun.com.fj - Last updated 2/12/2008
A Fiji Inland Revenue and Customs Authority audit into the Soqosoqo Duavata Ni Lewenivanua’s company, the Duavata Initiative Limited, ordered by the interim Finance Minister, Mahendra Chaudhry, found that it had collected over $1.7milion in donations between 2005 and 2007.
The report also revealed that businessman Ballu Khan made a telegraphic transfer of $100,000 on March 7, 2006 to DIL but another cheque of $20,000 was dishonoured in 2005.
The DIL’s receipts for the period January 1, 2005 to October 31, 2007 were over $1.7 million, according to the report dated January 15, 2008, which recommended that the directors should be re-interviewed to explain the source of the large deposits and the destination of large withdrawals.
FIRCA assumed that the $1.7million represented donations or contributions by members, presumably in the large business sector.
Total withdrawals for the same period, according to the report, from two accounts in a Suva bank were over $1.8million.
Mr Chaudhry, according to FIRCA sources, tabled the report in a special Cabinet meeting the next day, on January 16, 2008. According to the sources, he also wanted FIRCA to find a way to tax DIL.Khan recently pleaded not guilty to five counts of conspiracy to murder interim Prime Minister, Commodore Voreqe Bainimarama, Mr Chaudhry, interim A-G Aiyaz Sayed-Khaiyum, and two senior military personnel Colonel Samuela Saumatua and Lieutenant-Colonel Sitiveni Qiliho.
A day after Khan's contribution to the DIL, the Fiji Labour Party had, on March 8, 2006, lodged a complaint with the DPP and then Police Commissioner Andrew Hughes about the distribution of funds by the SDL through DIL.
The FLP had claimed that the funds distributed by the SDL to needy people were an attempt to buy votes.
According to the FIRCA report, DIL was incorporated on January 6, 2003 as a private company limited by guarantee and not having a share capital. The original directors were deposed Prime Minister Laisenia Qarase, and Cabinet Ministers Ratu Jone Kubuabola and Kaliopate Tavola.
In May 2003, the leader of the Fiji Democratic Party and later FIRCA chairman and now an interim Cabinet Minister Filipe Bole, had attacked the formation of the DIL saying the Qarase government was devoid of conscience and had discarded all sense of balance, decency and fairness in order to remain in power. Mr Qarase defended DIL, saying it was meant to raise funds for the ruling SDL party by providing it with ongoing income support.
But Mr Bole said registration of the company was tantamount to overt bribery and corruption of the first magnitude. He had questioned how decent and honest people would stand up to such a high level onslaught for funds.
Mr Bole said the government leadership did not seem able to see the conflict of interest between its official and private capacities.
The 26 objectives of the company, according to the FIRCA report, were widely drafted, with the first being as follows: “To provide financial, social, administrative, structural support and other assistance for political organisations which support free enterprise within Fiji.” The report noted that the DIL was not registered as a taxpayer and a title search showed no properties were owned. Two directors were interviewed in November 2007. They advised that the company was a non-profit one and did not undertake any commercial activity. The main source of income was donations from members.
The company's funds are used for: (a) general office administration (50 per cent); (b) members' benefits (30 per cent); and charity (10 per cent) for example scholarships for the poor.
FIRCA carried out a search of one of the banks in Suva where the directors advised the company's accounts were held.
On November 29, 2007, the bank provided bank statements for accounts 7591733 and 7195843 for the period January 1, 2005 to October 31, 2007. The bank notified FIRCA that the company held no other accounts or interest bearing deposits. It however, according to the report, stated that Mr Qarase had given the bank a $500,000 guarantee on March 28, 2006.
FIRCA provided a detailed analysis of account number 7591733 of all the deposits and withdrawals by the DIL.
On January 1, 2005 the DIL had an opening balance of $25,186 on that account and it had a closing balance of $225,979.80 on December 31, 2005. Between January 1, 2006 and December 31, 2006 it had $118,397.72, with deposits in between the period of $996,043.00 and withdrawals of $1,094,484.40. There were also dishonoured cheques of $1000.
On January 1, 2007, there was an opening balance of $118,379.92 and a closing balance of $61,083.65 on October 31, 2007.
The statements, the report stated, showed some deposit transactions with Ballu Khan, such as $20,000 dishonoured cheques in 2005 and telegraphic transfer of $100,000 on March 7, 2006.
On April 28, 2006 a withdrawal of $400,000 was made which sent the account into overdraft. There was no corresponding deposit to account number 7195843, according to the report.
The analysis of the account number 7195843 revealed that there was an opening balance of $320,231.23 on January 1, 2005, a withdrawal of $312,871.50, and a closing balance of $190,001.23 on December 30, 05. There was a deposit in 2006 of $75,000 and a closing balance of $128,609.97 on December 31, 2006. On January 1, 2007, there were withdrawals of $80,000.00, and the closing balance on December 31, 2007, was $48,544.57 leaving a zero balance on the account.
The withdrawals from account number 7591733, according the FIRCA report, did not match with deposits into account number 7195843 and vice versa, indicating that there may be other bank accounts held by the company. The report noted: “The total deposits for the period 1.1.05 to 31.10.07 for both accounts runs to over $1.7 million. This can be assumed to represent donations or contributions by members, presumably in the large business sector. Total withdrawals for the same period from both accounts are over $1.8 million. At this stage we do not know what the money was spent on or whether transferred to other accounts.”
The report also touched upon the tax status of the company, stating that the chargeable income of a resident company is its total income. Total income is defined in section 11 of the Income Tax Act as (abridged for companies): “… the aggregate of all sources … as being profits from a trade or commercial or financial or other business or calling or otherwise howsoever, directly or indirectly accrued to or derived by a person from any office or employment or from any profession or calling or from any trade, manufacture or business or otherwise howsoever, as the case may be …”
The report concluded that it did not appear that the fund-raising by the company fell into the definition above. Section 17 of the Act specifically exempts from tax the income of charities, clubs, societies, associations, trade unions, co-ops etc. While the list does not mention political organisations, “Duavata Initiative is set up more in line with these other non-profit bodies rather than a “trade or business”.
It went on to note: “If the company can be considered a “club”, and the donors “members”, then the doctrine of mutuality applies whereby the income is exempt. The income of the company is owned by the members who have contributed, and under the doctrine only income from external sources should be taxed. The company's articles are similar to most clubs e.g. upon winding up any funds must be given to another organisation with similar aims.”
The FIRCA report concluded that it was of the view that there were no tax risks associated with the company as it was in receipt of exempt income. No further investigations were done on that basis since December 2007 and, in any event, most of the auditors took leave over the holiday season.
As Key Performance Indicators within FIRCA are driven by revenue raised, there is general reluctance to pursue cases which will not contribute to the auditors' revenue results, it noted.
Nevertheless, there were some further actions which could be undertaken to ensure the tax compliance of the directors and members of the company. In relation to the company, FIRCA recommended that searches for other accounts could be conducted with all Fiji banks to locate accounts not disclosed by the directors. In relation to the accounts, bank statements could be obtained for the periods not already held - between incorporation on January 6, 2003 and December 31, 2004, and November 1, 2007 to date.
Large transactions could be vouched with the bank (i.e. the cheque forms and deposit slips obtained) to trace the source of the deposits and the destination of the withdrawals. The report however pointed out: “Note that this is a time consuming task for the bank as they have to search voluminous archives. Details of withdrawals from the vouching may point toward other bank accounts not disclosed.”
The information-gathering powers under the tax laws, the report stated, would permit such vouching to be made. “The purpose of the exercise is to determine where the member obtained the funds to make a contribution to the company. Note that contributions to political organisations are not tax deductible. It may be that the funds came from undisclosed profits of the members, or amounts disguised as deductible business expenses,” it said.
The financial statements of the company should be obtained. Under the Articles of Association the company must keep records for inspection by members, and produce a profit and loss account. The source records of the company, recording contributions of various members, should also be inspected. The directors could be re-interviewed to explain the source of the large deposits and the destination of large withdrawals.
If 50 per cent of the withdrawals ($0.9 million) were spent on “general office administration”, it would be interesting to see what this was actually expended on, the report commented.
The report suggested that FIRCA's Financial Intelligence Unit may provide information if the company's funds have been moved offshore, or deposits received from offshore. From January 1, 2008 FIRCA's secrecy provisions have been amended to allow information to be given to both FIU and FICAC.
Finally, the directors could be audited in their own right to determine if they had received income or withdrawals of funds from the company. Neither Mr Chaudhry or the SDL could be reached for comments.
A Fiji Inland Revenue and Customs Authority audit into the Soqosoqo Duavata Ni Lewenivanua’s company, the Duavata Initiative Limited, ordered by the interim Finance Minister, Mahendra Chaudhry, found that it had collected over $1.7milion in donations between 2005 and 2007.
The report also revealed that businessman Ballu Khan made a telegraphic transfer of $100,000 on March 7, 2006 to DIL but another cheque of $20,000 was dishonoured in 2005.
The DIL’s receipts for the period January 1, 2005 to October 31, 2007 were over $1.7 million, according to the report dated January 15, 2008, which recommended that the directors should be re-interviewed to explain the source of the large deposits and the destination of large withdrawals.
FIRCA assumed that the $1.7million represented donations or contributions by members, presumably in the large business sector.
Total withdrawals for the same period, according to the report, from two accounts in a Suva bank were over $1.8million.
Mr Chaudhry, according to FIRCA sources, tabled the report in a special Cabinet meeting the next day, on January 16, 2008. According to the sources, he also wanted FIRCA to find a way to tax DIL.Khan recently pleaded not guilty to five counts of conspiracy to murder interim Prime Minister, Commodore Voreqe Bainimarama, Mr Chaudhry, interim A-G Aiyaz Sayed-Khaiyum, and two senior military personnel Colonel Samuela Saumatua and Lieutenant-Colonel Sitiveni Qiliho.
A day after Khan's contribution to the DIL, the Fiji Labour Party had, on March 8, 2006, lodged a complaint with the DPP and then Police Commissioner Andrew Hughes about the distribution of funds by the SDL through DIL.
The FLP had claimed that the funds distributed by the SDL to needy people were an attempt to buy votes.
According to the FIRCA report, DIL was incorporated on January 6, 2003 as a private company limited by guarantee and not having a share capital. The original directors were deposed Prime Minister Laisenia Qarase, and Cabinet Ministers Ratu Jone Kubuabola and Kaliopate Tavola.
In May 2003, the leader of the Fiji Democratic Party and later FIRCA chairman and now an interim Cabinet Minister Filipe Bole, had attacked the formation of the DIL saying the Qarase government was devoid of conscience and had discarded all sense of balance, decency and fairness in order to remain in power. Mr Qarase defended DIL, saying it was meant to raise funds for the ruling SDL party by providing it with ongoing income support.
But Mr Bole said registration of the company was tantamount to overt bribery and corruption of the first magnitude. He had questioned how decent and honest people would stand up to such a high level onslaught for funds.
Mr Bole said the government leadership did not seem able to see the conflict of interest between its official and private capacities.
The 26 objectives of the company, according to the FIRCA report, were widely drafted, with the first being as follows: “To provide financial, social, administrative, structural support and other assistance for political organisations which support free enterprise within Fiji.” The report noted that the DIL was not registered as a taxpayer and a title search showed no properties were owned. Two directors were interviewed in November 2007. They advised that the company was a non-profit one and did not undertake any commercial activity. The main source of income was donations from members.
The company's funds are used for: (a) general office administration (50 per cent); (b) members' benefits (30 per cent); and charity (10 per cent) for example scholarships for the poor.
FIRCA carried out a search of one of the banks in Suva where the directors advised the company's accounts were held.
On November 29, 2007, the bank provided bank statements for accounts 7591733 and 7195843 for the period January 1, 2005 to October 31, 2007. The bank notified FIRCA that the company held no other accounts or interest bearing deposits. It however, according to the report, stated that Mr Qarase had given the bank a $500,000 guarantee on March 28, 2006.
FIRCA provided a detailed analysis of account number 7591733 of all the deposits and withdrawals by the DIL.
On January 1, 2005 the DIL had an opening balance of $25,186 on that account and it had a closing balance of $225,979.80 on December 31, 2005. Between January 1, 2006 and December 31, 2006 it had $118,397.72, with deposits in between the period of $996,043.00 and withdrawals of $1,094,484.40. There were also dishonoured cheques of $1000.
On January 1, 2007, there was an opening balance of $118,379.92 and a closing balance of $61,083.65 on October 31, 2007.
The statements, the report stated, showed some deposit transactions with Ballu Khan, such as $20,000 dishonoured cheques in 2005 and telegraphic transfer of $100,000 on March 7, 2006.
On April 28, 2006 a withdrawal of $400,000 was made which sent the account into overdraft. There was no corresponding deposit to account number 7195843, according to the report.
The analysis of the account number 7195843 revealed that there was an opening balance of $320,231.23 on January 1, 2005, a withdrawal of $312,871.50, and a closing balance of $190,001.23 on December 30, 05. There was a deposit in 2006 of $75,000 and a closing balance of $128,609.97 on December 31, 2006. On January 1, 2007, there were withdrawals of $80,000.00, and the closing balance on December 31, 2007, was $48,544.57 leaving a zero balance on the account.
The withdrawals from account number 7591733, according the FIRCA report, did not match with deposits into account number 7195843 and vice versa, indicating that there may be other bank accounts held by the company. The report noted: “The total deposits for the period 1.1.05 to 31.10.07 for both accounts runs to over $1.7 million. This can be assumed to represent donations or contributions by members, presumably in the large business sector. Total withdrawals for the same period from both accounts are over $1.8 million. At this stage we do not know what the money was spent on or whether transferred to other accounts.”
The report also touched upon the tax status of the company, stating that the chargeable income of a resident company is its total income. Total income is defined in section 11 of the Income Tax Act as (abridged for companies): “… the aggregate of all sources … as being profits from a trade or commercial or financial or other business or calling or otherwise howsoever, directly or indirectly accrued to or derived by a person from any office or employment or from any profession or calling or from any trade, manufacture or business or otherwise howsoever, as the case may be …”
The report concluded that it did not appear that the fund-raising by the company fell into the definition above. Section 17 of the Act specifically exempts from tax the income of charities, clubs, societies, associations, trade unions, co-ops etc. While the list does not mention political organisations, “Duavata Initiative is set up more in line with these other non-profit bodies rather than a “trade or business”.
It went on to note: “If the company can be considered a “club”, and the donors “members”, then the doctrine of mutuality applies whereby the income is exempt. The income of the company is owned by the members who have contributed, and under the doctrine only income from external sources should be taxed. The company's articles are similar to most clubs e.g. upon winding up any funds must be given to another organisation with similar aims.”
The FIRCA report concluded that it was of the view that there were no tax risks associated with the company as it was in receipt of exempt income. No further investigations were done on that basis since December 2007 and, in any event, most of the auditors took leave over the holiday season.
As Key Performance Indicators within FIRCA are driven by revenue raised, there is general reluctance to pursue cases which will not contribute to the auditors' revenue results, it noted.
Nevertheless, there were some further actions which could be undertaken to ensure the tax compliance of the directors and members of the company. In relation to the company, FIRCA recommended that searches for other accounts could be conducted with all Fiji banks to locate accounts not disclosed by the directors. In relation to the accounts, bank statements could be obtained for the periods not already held - between incorporation on January 6, 2003 and December 31, 2004, and November 1, 2007 to date.
Large transactions could be vouched with the bank (i.e. the cheque forms and deposit slips obtained) to trace the source of the deposits and the destination of the withdrawals. The report however pointed out: “Note that this is a time consuming task for the bank as they have to search voluminous archives. Details of withdrawals from the vouching may point toward other bank accounts not disclosed.”
The information-gathering powers under the tax laws, the report stated, would permit such vouching to be made. “The purpose of the exercise is to determine where the member obtained the funds to make a contribution to the company. Note that contributions to political organisations are not tax deductible. It may be that the funds came from undisclosed profits of the members, or amounts disguised as deductible business expenses,” it said.
The financial statements of the company should be obtained. Under the Articles of Association the company must keep records for inspection by members, and produce a profit and loss account. The source records of the company, recording contributions of various members, should also be inspected. The directors could be re-interviewed to explain the source of the large deposits and the destination of large withdrawals.
If 50 per cent of the withdrawals ($0.9 million) were spent on “general office administration”, it would be interesting to see what this was actually expended on, the report commented.
The report suggested that FIRCA's Financial Intelligence Unit may provide information if the company's funds have been moved offshore, or deposits received from offshore. From January 1, 2008 FIRCA's secrecy provisions have been amended to allow information to be given to both FIU and FICAC.
Finally, the directors could be audited in their own right to determine if they had received income or withdrawals of funds from the company. Neither Mr Chaudhry or the SDL could be reached for comments.
February 8, 2008
Economic Downturn for Fiji Continues
www.fijilive.com
Expect prices to go up: Reserve Bank
07 FEB 2008
In the approaching months, higher global oil and wheat prices, together with the increase in bus fares and flagfall for taxis, are expected to fuel domestic prices, the Reserve Bank of Fiji says.
Currently, the Brent Crude oil prices have eased to around $US 87.00 per barrel.
However, given the volatile and fickle pricing of this commodity, soaring crude oil prices remain a threat to inflationary outlook, the RBF says in the latest economic review.
In 2007, inflation was 4.3 per cent, underpinned by higher prices of alcoholic drinks and tobacco, clothing and footwear, miscellaneous items and durable household goods.
The increases were partially due to the upward revision in excise duties on these items, in line with announcements in the 2008 National Budget.
Moreover, food prices accelerated on the back of higher prices of bakery and wheat products, fresh meats, fish, dairy products, fats and oils and market items.
Over the month to December, consumer prices rose by 1.0 per cent.
Fiji households record lower incomes
07 FEB 2008
Households recorded lower incomes in 2007, suggests Reserve Bank of Fiji.
In 2007, net value added tax collections declined by 1.0 per cent on annual basis.
“Pay As You Earn collections also fell by around 1.0 per cent in 2007 on an annual basis suggesting lower household incomes.”
In the latest economic review, the RBF says consumption remained subdued in the review period, evident by declines in partial indicators of consumer spending.
Cumulative to November 2007, remittances declined by 27.3 per cent when compared with the same period in 2006, contributing further to subdued consumption activity.
Fiji building sector down 31pc
07 FEB 2008
Latest statistics on the building and construction sector indicate that the total value of work put in place cumulative to the third quarter totaled $165.4 million.
This was an annual decline of 31.7 per cent.
By categories, in the year to Quarter 3, the value of work put-in-place by the private sector fell significantly by 28.6 per cent with the public sector recording a much stronger decline of 44.6 per cent, the Reserve Bank of Fiji says.
Expect prices to go up: Reserve Bank
07 FEB 2008
In the approaching months, higher global oil and wheat prices, together with the increase in bus fares and flagfall for taxis, are expected to fuel domestic prices, the Reserve Bank of Fiji says.
Currently, the Brent Crude oil prices have eased to around $US 87.00 per barrel.
However, given the volatile and fickle pricing of this commodity, soaring crude oil prices remain a threat to inflationary outlook, the RBF says in the latest economic review.
In 2007, inflation was 4.3 per cent, underpinned by higher prices of alcoholic drinks and tobacco, clothing and footwear, miscellaneous items and durable household goods.
The increases were partially due to the upward revision in excise duties on these items, in line with announcements in the 2008 National Budget.
Moreover, food prices accelerated on the back of higher prices of bakery and wheat products, fresh meats, fish, dairy products, fats and oils and market items.
Over the month to December, consumer prices rose by 1.0 per cent.
Fiji households record lower incomes
07 FEB 2008
Households recorded lower incomes in 2007, suggests Reserve Bank of Fiji.
In 2007, net value added tax collections declined by 1.0 per cent on annual basis.
“Pay As You Earn collections also fell by around 1.0 per cent in 2007 on an annual basis suggesting lower household incomes.”
In the latest economic review, the RBF says consumption remained subdued in the review period, evident by declines in partial indicators of consumer spending.
Cumulative to November 2007, remittances declined by 27.3 per cent when compared with the same period in 2006, contributing further to subdued consumption activity.
Fiji building sector down 31pc
07 FEB 2008
Latest statistics on the building and construction sector indicate that the total value of work put in place cumulative to the third quarter totaled $165.4 million.
This was an annual decline of 31.7 per cent.
By categories, in the year to Quarter 3, the value of work put-in-place by the private sector fell significantly by 28.6 per cent with the public sector recording a much stronger decline of 44.6 per cent, the Reserve Bank of Fiji says.
February 7, 2008
Fiji remittances decline by 27pc
06 FEB 2008-www.fijilive.com
Remittances to Fiji have declined by 27.3 per cent cumulative to November when compared with the same period in 2006, the Reserve Bank of Fiji says.
In the latest economic review, the RBF says this has contributed further to subdued consumption activity.
In 2006, remittances brought around $350m in foreign exchange earnings. It is unclear what the remittance inflow is for 2007.
Local money transfer exchanges agree that remittances into Fiji are declining.
One dealer, Exchange World (Fiji) Ltd experienced a 10 per cent drop in remittances last year.
Manager SP Chung says most of their remittances came from Kuwait (from soldiers or bodyguards stationed in Iraq).
Chung says he does not know the reason behind the decline and nor could he project an outlook for 2008. The company has one branch in Suva.
Army spokesperson Lt Col Sitiveni Qiliho says soldiers and bodyguards stationed in Iraq usually go to Kuwait to send money back home. He says the number of people stationed in Iraq has not declined.
However, he says it is possible that money is now being sent through those soldiers coming home on leave which means the money is not going through the exchanges.
Lotus Foreign Exchange Ltd which has five branches around Fiji says it has also experienced a drop but could not say by what percentage.
Manager Ajay Kumar feels the drop could be because of the poor exchange rates.
“Maybe the rates are not good enough for the foreigners to get the inflow to Fiji.”
He says most of the money coming through their agency is in US dollars and from New Zealand (where the company headquarters is located.)
He says remittances had started declining from 2006. “When you compare rates, it is largely affecting the US dollars.”
For instance, he says before $US1000 would bring in about $F1800 but that has now dropped to about $F1400.
“It does not matter how much you are sending, the rates will go down here. So in general there is a decrease”
Kumar feels that 2008 could see a further decrease in remittances.
Last year, Finance Minister Mahendra Chaudhry had said high costs are incurred by people remitting money to Fiji
He said this is clearly not acceptable and that he had asked the Reserve Bank of Fiji to look into the matter with due urgency.
Kumar agreed saying this could be one factor. “Costs are getting high to send money to Fiji.”
Remittances to Fiji have declined by 27.3 per cent cumulative to November when compared with the same period in 2006, the Reserve Bank of Fiji says.
In the latest economic review, the RBF says this has contributed further to subdued consumption activity.
In 2006, remittances brought around $350m in foreign exchange earnings. It is unclear what the remittance inflow is for 2007.
Local money transfer exchanges agree that remittances into Fiji are declining.
One dealer, Exchange World (Fiji) Ltd experienced a 10 per cent drop in remittances last year.
Manager SP Chung says most of their remittances came from Kuwait (from soldiers or bodyguards stationed in Iraq).
Chung says he does not know the reason behind the decline and nor could he project an outlook for 2008. The company has one branch in Suva.
Army spokesperson Lt Col Sitiveni Qiliho says soldiers and bodyguards stationed in Iraq usually go to Kuwait to send money back home. He says the number of people stationed in Iraq has not declined.
However, he says it is possible that money is now being sent through those soldiers coming home on leave which means the money is not going through the exchanges.
Lotus Foreign Exchange Ltd which has five branches around Fiji says it has also experienced a drop but could not say by what percentage.
Manager Ajay Kumar feels the drop could be because of the poor exchange rates.
“Maybe the rates are not good enough for the foreigners to get the inflow to Fiji.”
He says most of the money coming through their agency is in US dollars and from New Zealand (where the company headquarters is located.)
He says remittances had started declining from 2006. “When you compare rates, it is largely affecting the US dollars.”
For instance, he says before $US1000 would bring in about $F1800 but that has now dropped to about $F1400.
“It does not matter how much you are sending, the rates will go down here. So in general there is a decrease”
Kumar feels that 2008 could see a further decrease in remittances.
Last year, Finance Minister Mahendra Chaudhry had said high costs are incurred by people remitting money to Fiji
He said this is clearly not acceptable and that he had asked the Reserve Bank of Fiji to look into the matter with due urgency.
Kumar agreed saying this could be one factor. “Costs are getting high to send money to Fiji.”
February 1, 2008
ADB to review assistance to region
www.fijitimes.com - Thursday, January 31, 2008
Update: 11.38am CITING coups and civil unrest that continue to hamper development in the Pacific, the Asian Development Bank (ADB) is fine-tuning its development assistance in the region, according to a report carried by Pacnews.
''The Pacific region continues to display the symptoms of a fragile development process. Economic growth generally remains low,'' says Philip Erquiaga, Director General of ADB's Pacific Department.
''Civil unrest, political instability, and poor law-and-order continue to hinder the region's development,'' he said.
The midterm review of ADB's Pacific Strategy 2005-2009 affects the Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu.
Economic growth in the Pacific Islands was modest in 2007, according to ADB's flagship annual economic report, Asian Development Outlook.
The Pacific economies continue to lag behind Asia, and much of the Pacific region's population is exposed to a decline in living standards when economic conditions weaken.
The total level of approved ADB assistance has increased substantially under its Pacific Strategy programme to US$462.4m in 2005-2007, or a 141 percent increase above the US$191.7 million in the preceding three year.
Update: 11.38am CITING coups and civil unrest that continue to hamper development in the Pacific, the Asian Development Bank (ADB) is fine-tuning its development assistance in the region, according to a report carried by Pacnews.
''The Pacific region continues to display the symptoms of a fragile development process. Economic growth generally remains low,'' says Philip Erquiaga, Director General of ADB's Pacific Department.
''Civil unrest, political instability, and poor law-and-order continue to hinder the region's development,'' he said.
The midterm review of ADB's Pacific Strategy 2005-2009 affects the Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu.
Economic growth in the Pacific Islands was modest in 2007, according to ADB's flagship annual economic report, Asian Development Outlook.
The Pacific economies continue to lag behind Asia, and much of the Pacific region's population is exposed to a decline in living standards when economic conditions weaken.
The total level of approved ADB assistance has increased substantially under its Pacific Strategy programme to US$462.4m in 2005-2007, or a 141 percent increase above the US$191.7 million in the preceding three year.
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