Declining FNPF contribution a concern

Posted on Matavuvale.com -By Rachna Lal - July 21, 2010 

A Fiji academic says member contributions to the country’s only superannuation; the Fiji National Provident Fund (FNPF) peaked in 2006 but then started reducing from there on.

Dr Rohit Kishore, a senior lecturer at the University of the South Pacific’s School of Accounting and Finance, speaking at the Fiji Economy Update 2010 said this is mainly due to mass migration.

“The other major issue is people are taking out their benefits more than contributions being made which will finally have an impact on our social security,” he stressed.

He highlighted the withdrawal in 2009 was $75.43 million compared to $57.9 in 2008.

Kishore attributed most of the withdrawals to migration, partial withdrawals and people taking money out upon retirement.

“People should be mindful that these money is o provide cushion when people get old and if they keep taking little money out for small difficulties, then they will find it more difficult in the future.”

He acknowledged FNPF tightening the withdrawal policy which will automatically deter people from withdrawing from this superannuation fund.

Kishore is hopeful future investments by the FNPF will be based on careful decision and the end result will see members receiving maximum interest from FNPF.

Comments posted on Matavuvale.com

• the major contributing factor of decline in fnpf contribution is the rising number of unemployment.
• Why should people be paying into a pool of money that is being used to suppress them? Those who conribute into it should be allowed to withdraw it when they leave the country. But I know that this is not the case anymore, I have family members who are not allowed to take out their contribution even though they have moved abroad.
• Massive withdrawals, unemployment, mass migration, partial withdrawals, failed projects and worst still the regimes loans have really killed the bull. Once upon a time this was the pride of the nation. Not anymore.
  It's a white elephant.
  1.
  a.A rare, expensive possession that is a financial burden to maintain.
  b.Something of dubious or limited value.
  2.An article, ornament, or household utensil no longer wanted by its owner.
  3.An endeavor or venture that proves to be a conspicuous failure.

Moving Fiji out of the doldrums

Fiji Sun News - 13 July 2010

Association of Banks in Fiji chairman, Rakesh Sharma, shares his views to the Fiji Sun about the June issue of the Reserve Bank of Fiji’s Economic Review. SUNBIZ: How does the global economic recovery and the International Monetary Fund forecasts affect Fiji and the ordinary people? MR SHARMA: Let’s take Fiji. In the present global scenario, no economy can stay isolated from the global events more so from the negative impacts. It has been quite significantly demonstrated in East Asian Crisis in 90s, in Sub Prime Debacle and in more recent Sovereign crises of Greece and other European countries. If these crises have negative shocks, the recoveries are surely going to have the much needed positive impact globally. Fiji’s economy is characteristically very much dominated by the events happening in its major trading partners. Moreover, it is largely depending upon these partners for growth of major industries/sectors. For instance, increase in tourist arrival of more than 22per cent in the first four months of current year in the direct effect of global recovery. This can be attributed to the recovery in major trading economies. Tourism being major foreign exchange earner, increase in tourist’s arrival will result in growth in other sector also. It will result in increase in capacity utilization of tourism related sectors, increase in VAT and payee collections, growth in GDP, of which tourism sector in a prominent contributor and increase in foreign exchange. Recovery in economies of trading partner will encourage buying from Fiji the products like fish, timber, gold, mineral water and consequently increase export earnings. Indirect impact of global recovery can be observed in increase inward remittances also. We can therefore, expect a positive impact on Fiji in medium and long run, provided the recovery in major trading partners is consistent and sustained. For the ordinary people; it’s an increase in employment in tourism and other sectors. Resulting in increase in wages, purchasing power and consumption, which is the most positive contributors to the economic development. However, such impact may not prominently be visible in the short run. SUNBIZ: The commercial banks lending for investment purposes rose. What are the benefits of this on Fiji’s economy? MR SHARMA: Increased investment is a welcome feature and an important indicator of progress in economy. It signifies increase in business and investor’s confidence. The positive growth in tourism has encouraged investment in real estate for increasing room inventory, building tourist resorts and development of lots for sale to foreigners. Investment in infrastructure and manufacturing units (plant and machinery) is a very welcome feature as it is a prerequisite to any economic development. These activities again result in employment generation, increased income, purchasing power and consumption. SUNBIZ: How does inflation affect consumers? MR SHARMA: Inflation is a phenomenon, which is prominently visible in almost all the economies in the world. External stimuli employed to combat the global crises had direct bearing on rising inflation. However, in a developing economy inflation can never be neutralised but it can be at the most controlled. Price rise is a welcome phenomenon, signifying economic development, unless the rise is hyper or galloping. Rise in prices is always a burden on people and consumers. In the current environment the people have no choice but to live with it. SUNBIZ: Your comment on Fiji’s foreign reserves Fiji? MR SHARMA: Foreign Reserves of Fiji constitute; A) Foreign investments B) Inward remittances C) Special Drawing Rights Special Drawing Rights (SDRs) are costless assets that increase a nation’s foreign exchange reserves without the need for an actual transfer of funds. Allocated to nations by the International Monetary Fund (IMF), a SDR represents a claim to foreign currencies for which it may be exchanged) Overview of Economic Review is summarised as follows: World Economy- Global economy is recovering and it is forecast to recover at 4.2per cent for the current year. Developing economies are expected to grow at a higher rate than the developed economies. Fiji Economy- Fiji’s economy is improving. The economic performance of Fiji’s major trading partners has improved. Positive outlook for Fiji may be reinforced on the basis of following indicators: 1. In April, Tourists arrival increased by 22.7per cent. 2. VAT collection (April 2010) showed increase of 9.5per cent. 3. Commercial Banks lending for investment rose by 4.5per cent. Lending for consumption rose by 3.9per cent. 4. Inward remittance rose by 32.5per cent. 5. Inflation declined to 9.4per cent in May 2010 from 10.5per cent in April 2010. 6. Domestic export earning rose by 74.4per cent in Jan 2010 as compared to (-) 41.8per cent in 2009. 7. Foreign reserves position improved with 3.5 months of import. 8. Banks’ liquidity level is higher. Reserve Bank Fiji has increased SRD rate to suck extra liquidity to curb inflation. However, uncertainty looms large over the growth of economy in the current year as is evident from the frequent change in growth forecast and other estimates. In the most recent news, doubts are expressed on New Zealand’s economic recovery. In this volatile situation, we need to keep our fingers crossed and hope no further global or natural crisis hits Fiji and the world.(Note: Mr Sharma would like to clarify that views expressed in this interview are solely his and not of Bank of Baroda or any other organisation).

State looks at possible Post Fiji options

Story by: Rachna Lal

Fiji Live News - July 04, 2010 

The Fiji government is currently looking at a possible public-private partnership in regards to Post Fiji.

The Prime Minister Commodore Voreqe Bainimarama confirmed this at the 2010 budget announcement on Friday.

“Government is currently assessing proposals on public-private collaboration regarding the management of Post Fiji,” he said.

Bainimarama added the Government Printing is expected to be made available on the market within this year.

The PM also established that initial works on the re-organisation of the Fiji Electricity Authority (FEA) has already begun.

“The restructure of the electricity tariff rates have commenced which will buffer the poor but concomitantly reflect market prices and incentivize independent power producers (IPPs),” he said. 

He said IPP’s generally use renewable energy to supply the national grid.

“This has an added advantage as it reduces our dependency on fossil fuel and is better for the environment,” Bainimarama said.

He also said the Fiji Meteorological Services Department has also been identified for reorganization with an assessment in train to determine the best option forward.

ATH 2010 Profit Slumps 53 percent

July 01, 2010 

Fiji’s Amalgamated Telecom Holdings Ltd has announced a group consolidated next after tax profit of $15.4 million for the year ended March 31, 2010, a 53.5 percent drop on the $33.1 million profit the previous financial year.

Chief executive officer Tomasi Vakatora said the reduced profit was due to a combination of a decline in sales revenue and increase in expenses and the incurrence of “abnormal or one-off items”.

Vakatora said the figure was in line with projections announced on May 19.

Sales revenue declined by 10.4 percent and was attributed to retail price reductions “of which some were taken at the ATH Group’s initiative in response to market conditions and others through various determinations by the Commerce Commission over recent years”.

Other contributing factors were “intensity of competition and consequent loss of some market share and relatively weak trading conditions from the flow on effects of the global financial crisis onto the Fiji economy”.

Vakatora said that despite the reduced profit, ATH directors were proposing a final dividend of 2 cents per share totaling $8.442 million.

The dividend will be submitted for approval at ATH’s annual general meeting on August 19.

The proposed final dividend is in addition to the interim dividend of $12,663,146 paid in March 2010, bringing the total dividend for the year to $21, 015, 524.

The ATH stable includes ATH, Telecom Fiji Ltd, Vodafone Fiji Ltd, Fiji Directories Ltd, Internet Services Fiji Ltd, Transtel Ltd, Exceed Pasifika Ltd, ATH Technology Park Ltd, ATH Call Centre Ltd and Pacific Emerging Technologies Ltd.