Fiji need best minds on the economy

We need best minds on the economy
www.fijisun.com.fj - 4/3/2009

It is time to think about the financial crisis we’re now facing and the economic future of this nation we are proud to call home.
Fiji is beginning to feel the twin impact of the global economic crisis, and the financial fallout from the political crisis here.
But we wonder if our current leaders are getting all the advice that could help in these tough times.
We have highly qualified economic and business experts. The country needs their help.
Such experts, irrespective of their political affiliations, should be asked to advise on the best way forward.
Obviously some, perhaps many, will not want any formal appointment from the interim Government. They will not want to be hit by the post-coup sanctions enforced by Australia and New Zealand.
But this nation, proud to have nurtured some of the region’s best economic and business brains, needs good, workable ideas quickly.
Not for the sake of the interim Government. But for the long-term future of Fiji.
Personal politics and agendas should be put aside to help ease the pain ahead. There needs to be a genuine commitment by all to see that the people do not feel lasting economic pain.
There are alarming warning signs. More people will lose their jobs this year, poverty will rise and the economy contract.
A just released Asian Development Bank Outlook Report says: “There are indications that the incidence of poverty is rising, a result of long-term declines in the sugar and clothing industries, the impact of several coups, and, more recently, external shocks that raised food and fuel prices and further undermined growth.”
It said pockets of deep poverty are found in town squatter settlements and more widespread poverty is apparent in rural areas.
It underscores that our economy needs much more than a political settlement.
Reforms are needed to create a better climate for private sector development to create jobs and exports, it stresses.
All this as the global economic crisis continues, and our own political crisis adds to the problems.
Our priority now must include to save our economy and not just political settlement to advance Fiji to democratic rule.
The two are obviously inter-linked.
But the way things are going we cannot afford to wait for a political settlement before we use all skills available to address the economic challenges.
We need all our best business and economic minds, no matter what their political views, working on this. Right now.
Carry on against corruption
Returning from his six-day visit to India, interim Prime Minister Commodore Voreqe Bainimarama opened the FICAC (Fiji Independent Commission Against Corruption) website.
He did so with the strong message that his Government will eradicate corruption in Fiji.
He said the interim Government pursued the clean-up campaign
to rid the country of corruption and bring about reforms that stop corruption growing.
The campaign would continue in Government departments, the business community and wherever corruption rears its ugly head.
Everyone who cares about a better Fiji will welcome this.
Corruption respects no borders, knows no economic distinctions and can infect all forms of government. In the long run, no country can afford the social, political or economic costs that corruption entails.
There is no place for corruption in Fiji.
Corruption is one of the biggest problems today in the developing world.
It takes many forms.
Let us all support the fight against it. Use the new FICAC website (www.ficac.org.fj) to report suspicious dealings or activities.

Controversial $190m BP acquisition going ahead: FHL

$190m BP acquisition going ahead: FHL - www.fijilive.com - 30/03/2009
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Fijian Holdings Limited (FHL) has confirmed that the $190 million acquisition of BP SWP is going ahead.

And FHL managing director Sereana Qoro said the settlement of this acquisition would be made in a few weeks upon finalisation of overseas funding agreement.

She said this deal was not only the biggest but one of the most significant investment breakthroughs in FHL’s history.

“It has always been the desire of FHL to invest in the lucrative petroleum industry,” Qoro said.

“In fact, FHL participated a few years ago in the bid to purchase Shell Company in the early stages of the bidding process, which was eventually won by Total,” she said.

Qoro said this move was in line with FHL’s three year strategic plan to selectively grow its investment portfolio by expanding into the Pacific region.

She said the acquisition should also be a milestone for Fiji because for the first time, a major petroleum company operating in the Pacific would be locally owned.

She added this would have positive implications on Fiji’s foreign reserves in the long term.

Three major provinces in Fiji had questioned FHL’s move to acquire BP SWP saying the acquisition was too huge a deal for FHL’s size and that risks would be extremely high.

But FHL maintained that it could not go wrong with oil.

“The petroleum business is well established with 60 years of successful trading history, well integrated around six countries in the Pacific and highly profitable as a going concern,” Qoro said.

Qoro reassured shareholders that the investment in BP SWP Ltd met all the investment benchmarks that FHL had always used over the years.

Meanwhile, the Fiji Islands Revenue and Customs Authority (FIRCA) has issued a garnishee order against FHL for taxes owed by BP SWP.

BP SWP general manager Matt Elliott said the company was now inn discussion with the tax commissioner to resolve tax issues so to complete the deal with FHL.

State, Fiji banks to battle crisis

State, banks to battle crisis
www.fijisun.com.fj - 3/19/2009

The recent announcement by the Association of Banks to work with the Interim Government in finding ways to counter the economic crisis has been welcomed by the business community.
Businessman Mick Beddoes yesterday said the announcement that banks would guide government to establish measures to help Fiji overcome the global financial crisis is good news.
And he has called on the banks to announce what measures it would be taking to help people with their mortgage repayments and other commitments so that Fiji could avoid the impact of the financial crisis. Mr Beddoes suggested that the first step taken by the banks should be to reduce by up to 50per cent housing and other loan repayments for the next 12 months before reviewing things and adding back any arrears existing to the balance owed.
“This will bring immediate relief to the people and allow them to make adjustments to their budgets,” he said. “Although many people have already taken their deposits out of the banks in fear of losing their money, government can encourage people to start re-depositing their funds.
“Thereby assisting banks in improving the liquidity problem we face by issuing a government guarantee for every person’s savings similar to measure taken in other countries.” He said people are worried but this could be reduced significantly if banks and the government announce measures that would help assure them that they won’t lose their homes. “This will also help them to maintain reasonable cash flow to better manage the finances and survive through these difficult times,” Mr Beddoes added.

Huge drop in tourist arrivals

Huge drop in tourist arrivals
http://www.fijisun.com.fj/ - 3/19/2009

A total of 32,955 tourists arrived in the country in January which is a 27.6per cent drop compared to last year.
Tourism Fiji board chairman Patrick Wong yesterday said the first quarter of 2009 is likely to record a drop of 25per cent but they are working hard to bring in more tourists.
“We are having tactical campaigns in New Zealand and a stimulus package campaign in Australia,” he said.
Mr Wong said a “Fiji Me” roadshow is currently being held in New Zealand where they have visited places like Whangarei, Auckland, Hamilton, Christchurch and Dunedin. “Tourism Fiji and our industry partners are presenting Fiji directly to trade partners under one roof in the locations.
“It effectively trains and provides our trade partners with up-to-date knowledge of Fiji as a destination as well as the range of products we have to offer penetrating the markets.”
Mr Wong said the roadshow is a marketing initiative that is cost effective, focused and suitable for a market such as New Zealand that has such a diverse geographical spread.He said Tourism Fiji’s activities in Europe includes the DAS BOOT in Dusseldorf, Germany, an event serving boat owners, yachts, divers and tourism destinations, BIT in Milan, Italy, ITB in Berlin, Germany and MITT in Moscow.
“These leading trade shows showcase the best international tourism suppliers and presents the entire spectrum of products of the tourism industry”
Mr Wong said these trade shows are prime meeting places that provides outstanding opportunities for the private sector to present their product and enhance their image serving the travel and tourism industry.
“In light of the global financial crisis, it is critical that Fiji maintains its market stamina, being visibility and remaining focused for long term benefits of Fiji’s Tourism Industry investing into the future of our country”.
He said occupancy levels are also soft throughout the region as February and March are our traditional low season months of the year which are further impacted by the financial crisis.
“Hotel worker are exhausting all annual leave owing prior to temporary workers released from their duties. Depending on occupancy after exhausting all avenues permanent employees are worked on a shorter working week.
“I would say the worse is over with February and March being traditionally our lowest tourism season of the year.”

Fiji trade deficit widens, remittances down

www.fiilive.com - Fiji trade deficit widens, remittances down
02/03/2009
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Fiji continues to buy more than it sells, adding to a deteriorating trade balance that has worsened by 30 per cent to $1.9 billion by November last year, the Reserve Bank of Fiji has revealed.

In its economic review for last February, the central bank said that although Fiji’s exports rose by 16.7 per cent, it was overshadowed by the 24.2 per cent growth in imports.

The review showed that the increase in export receipts was underpinned by re-exports, predominantly of mineral fuels, as well as higher earnings from sugar, fish and gold.

The increase in imports, on the other hand, was across all categories.

“Mineral fuels, food, machinery and chemical imports contributed well over 80 per cent to the growth,” the report adds.

Remittances, which has in recent years assisted the Tourism industry in propping the economy, continued its downward trend and registered a 26.7 per cent annual decline in 2008.

The Reserve Bank governor Savenaca Narube, on Friday, called on key players to avoid the blame game and focus on rebuilding the economy.

“While Fiji is isolated from the financial mess, we unfortunately cannot avoid its economic fallouts. What is happening around us is unprecedented,” he said.

“If ever a time that the country needs to work together to build our economy this is one of them. The economy is our bread and butter. It is our livelihood. It puts food on the table. It pays for our children’s education. It protects the future of our grandchildren.

“So we should all play a part in building this economy right now. We should avoid the blame game. We should focus all our energy in getting things done in a coherent and consistent fashion.

Narube also said that now is the time to take action.

“We are forever setting up committees. The only growth industry now is conferences. We study that. We review that. We review the review and so forth. What we very much lack is action. It is action that makes things happen.

“I believe that if we all implement 50 per cent of what we say we will do, we will be far better off than where we are today."
Fiji cost of living eases: RBF
02/03/2009
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Inflation eased slightly to 6.1 per cent in January this year, the Reserve Bank of Fiji reveals.

This is compared to 6.6 per cent in the previous month (December) and 7.4 per cent in January last year.

The RBF’s February-end economic review said the slight slowdown in January inflation was mainly strengthened by lower oil prices filtering into the transport and heating and lighting categories.

“Nonetheless, food remained the largest contributor to inflation, buoyed by higher charges for market items as a result of the recent flood,” the report said.

“In the months ahead, domestic price pressures are expected to mount given the supply constraints of market items,” it said, adding the supply of these products was anticipated to be restored by mid year.

The report added that the 2009 year-end inflation forecast remained unchanged at 4.5 per cent.

“Some of the upside risks to this forecast include the volatility in crude oil and wheat prices, and the higher-than-expected increase in costs of market items due to the recent flooding.

“The decline in taxi fares is nonetheless expected to mitigate some of these price pressures.”

Foreign reserves, on the other hand, stood at around $672.2 million, sufficient to cover 2.7 months of imports of goods.
Productivity ‘can lift Fiji economy’
01/03/2009
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One of the easiest way to grow the economy is to raise productivity, says Reserve Bank of Fiji governor Savenaca Narube.

However, Fiji’s rate of productivity growth is extremely disappointing, he said while speaking at the Rotaract Club of Suva’s business seminar on ‘Productivity and Ethics’ yesterday.

“My estimate is that if we raise productivity rate by one percentage point, it will raise GDP (Gross Domestic Product) by nearly twice that.”

He said productivity is firstly a way of thinking and secondly a mechanical process.

“You can have the best processes in the world but if the people behind them do not want to follow them, productivity will suffer.

“If you have the best degree from the best university but you lack the willingness to work you will not go far.”

A good frame of mind he said, is the first thing to have.

Narube added everyone thought the sub prime problem was over but all were wrong.

“The crisis has deepened and widened beyond anyone’s imagination. While Fiji is isolated from the financial mess, we unfortunately cannot avoid its economic fallout,” he said.

Fiji growth revised, needs stability: RBF

www.fijilive.com - 24/02/2009
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Fiji’s central bank is working on revising its prediction for the economy given less than three months ago as it braces for an unexpected downturn.

Reserve Bank of Fiji Governor Savenaca Narube said the Macroeconomic Policy Committee, which helps government formulate policies and make forecasts, is “extremely busy” revising the prediction for the economy in light of the floods last January and the global economic meltdown.

“Given what is happening around us, we will do extremely well to achieve the 2.4 per cent growth that was released in November last year,” Narube said, while addressing guests at the launch of a book, “A Voice of Reason: The Writings of Savenaca Siwatibau”, at the University of the South Pacific yesterday.

“I hope that the Reserve Bank will not be blamed for this economic scenario.”

Earlier this week the Fiji Labour Party issued a statement putting much of the blame for Fiji’s rapidly declining foreign reserve levels, falling exports, tight liquidity and escalating interest rates on the RBF.

The party said the latest RBF economic review revealed that foreign reserves were down to $767 million, liquidity was tight, rising interest rates and expected decline of exports subsequent to flood damage to sugar cane and other crops.

The Party said this was the complete opposite to six months ago when party leader Mahendra Chaudhry was interim Finance Minister.

It said foreign reserves stood at $910 million then, liquidity was flush, interest rates low, investment levels rising, exports upped 33 per cent compared to 2006 and debt level brought down to 45 per cent of GDP from a high of 53 per cent under the Laisenia Qarase-led government.

The party said the RBF had relaxed monetary controls too soon and triggered rapid outflow of local funds.

“It also relaxed exchange controls on importation of capital goods, permitting payment in Fiji dollars,” it added.
Narube has hinted that managing foreign reserves has been difficult.

“My hair is not only grey they have turned all white in the last six months,” he said.

He has also emphasized the need for stability before Fiji can solve its economic problems.

“We live in challenging times,” he said.
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“The world economy is buckling from the fallouts from the financial crisis. Fiji will not be immune from this global recession. Our economy was already under some stress.

“Siwa (tibau) was a stickler for economic stability. I am sure that he would emphasise to us today that while we have a host of economic problems we must deal with the stability first before we can solve the others.

“This would be a wise counsel. We will do well to heed it. Without stability you do not have a foundation for growth.”

A looming cash crisis

A looming cash crisis
Dr Mahendra Reddy
www.fijitimes.com - Saturday, February 21, 2009

THE continuous increase in interest rates over the past six months does not augur well for Fiji's economy.

The raise in interest rates will affect the economy via two channels - the construction and consumption channels.

As interest rates rise, home values fall and consumers feel they are losing on their value of total stock of assets.

They will cut their consumption.

That is, they will cut down general spending as well as avoid borrowing against their homes.

Thus new construction will be less forthcoming.

If this situation is prolonged and simultaneously, real income declines either as a result of inflation or pay cuts or layoffs, we may trigger a crisis in the sub-prime mortgage market where borrowers are just making theirs ends meet with multiple payment demands.

The banks are behaving this way (raising interest rates) because due to shrinking liquidity, retail and wholesale deposit rates have been increasing and no bank would want their interest rate spread to continue to worsen.

Hence, they have rushed into raising lending rates to maintain the interest spread.

The Reserve Band of Fiji is also a contributory institution to this rise in interest rates.

It must now immediately examine its two main tools - the RBF funds rate and the discount rate.

The RBF funds rate is the bank to bank borrowing rate.

At any given time, some banks have extra reserves and some have a shortage of reserves. In the funds market, banks with excess reserves lend to those that are short handed.

The RBF can intervene in this bank-to-bank transaction by buying and selling bonds to the banks thus restricting the liquidity at the level.

When RBF sells bonds, it pulls funds out of the bank, thus reducing liquidity.

Secondly, the RBF also uses a discount rate which it employs when it lends directly to a bank.

Thus raising this discount rate will also cause the banks to raise their lending rates.

Therefore, it is not the banks only which are trying to protect their interest spread by responding to the retail and wholesale market, but rather, they are also responding to RBF's use of the two key tools at its disposal.

We must also note that prolonged use of government expenditure without raising the productive capacity of the economy also raises inflation rates and thus the interest rates.

It is for this reason that we must be prudent in use of government expenditure particularly when it comes to debate of whether established international benchmarks should be compromised.

* Dr Reddy is the Dean of the Faculty of Commerce, Hospitality and Tourism Studies at the Fiji Institute of Technology. The views expressed in this article are his and do not necessarily reflect that of his employer.

Fiji Trade Deficit goes on Increasing

Trade deficit hits $1.1 billion
04/10/2008 - www.fijilive.com
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Fiji’s trade deficit hit almost $1.2 billion for the 12 months ending September this year, the country’s central bank has revealed.

This is compared to around $950 million recorded for the same period last year.

The Reserve Bank of Fiji’s (RBF) September economic review said higher growth in import payments contributed to the increase in the merchandise trade deficit.

On trade developments, the RBF said domestic export earnings rose by 15.2 per cent in July, attributed to higher inflows from sugar, fish, mineral water, timber, sweet biscuits, flour, gold and other domestic exports.

This was supplemented by earnings from re-exports, contributing to a higher growth of 20.9 per cent for total exports.

Total imports swelled by 23.1 per cent in July.

All categories of import – intermediate (11.6 per cent), consumption (8.9 per cent), and investment (2.6 per cent) goods rose.

On the domestic front, activities remained subdued, the RBF said.

Lending for consumption purposes rose in July by 6.4 per cent on an annual basis.

In addition, imports of consumption goods rose by 23.8 per cent cumulative to July, although this could be driven primarily by higher prices.

Moreover, the poor performances of major sectors such as cane and sugar, subdued labour market conditions and the decline in remittances receipts (21.7 per cent) are expected to moderate consumer spending.

At the end of August, official foreign reserves stood at $911.3 million (provisional), sufficient to cover 3.6 months of imports and goods.

Forum has run out of patience with Fiji

Forum has run out of patience with Fiji

www.sun.com.fj - 8/20/2008

Pacific Forum leaders have “run out of patience” with the interim Government.
While there have been mixed reactions from members of the Forum at the absence of interim Prime Minister Commodore Voreqe Bainimarama from the Niue meeting, New Zealand Prime Minister Helen Clark said her regional peers had run out of patience.

The meeting, which began yesterday, heard immediate reactions to Cdre Bainimarama’s failure to attend.

“I think the Forum should send a very clear message to him,” said Ms Clark.

“We don’t really know what the dynamics are in Fiji at this point but I think people will be surprised that their self proclaimed PM is not ready to face his peers here.”

Pacnews reported she likened Commodore Bainimarama’s reaction to that of Zimbabwean President, Robert Mugabe, when he was expelled from the Commonwealth.

“I have a feeling of deja vu about this,” she said.

“It seems like the dance the Commonwealth had with Zimbabwe but the Commonwealth stuck to its principles. Robert Mugabe left rather than face his peers. One hopes that Fiji sees the sense of sticking to the commitments it gave to leaders.”

She did not rule out further sanctions against Fiji but only hinted that the report of the Forum Ministerial Contact Group (MCG) is expected to be endorsed by the leaders today.

“The report concludes that there is no technical, administrative or managerial reasons for Fiji not to honour its March 2009 elections commitment. The problem is there is no political will.

“In my bilateral meetings with the Samoan Prime Minister, Tuilaepa Malielegaoi and the Papua New Guinea foreign affairs minister, who are members of the Ministerial Contact Group, they indicated their support for the MCG report,” said Ms Clark.

Tongan Prime Minister and outgoing chairman of the Pacific Islands Forum, Dr Feleti Sevele said, he personally felt let down by the non attendance of Commodore Bainimarama.’

“We acted in good faith and as a regional organisation, we included everybody in the discussions on Fiji” Dr Sevele told journalists.

“I am disappointed that he is not fulfilling his commitment and he’s not here. His actions have undermined the Forum, putting it under stress,” said Dr Sevele.

Fiji Moans About Pacific Regional Entities

Pacific Plan questioned by state
www.sun.com.fj - 8/20/2008

The interim government has questioned the decision of the Pacific Forum island leaders to merge some of the functions of 10 regional organisations in the Pacific.
A paper obtained by Pacnews said Fiji wanted to revisit the decision to rationalise some of the functions of the Suva-based Pacific Islands Applied Geoscience Commission with the work programmes of the Secretariat of the Pacific Community and the Secretariat of the Pacific Regional Environment Programme.
It also questioned the rationale behind merging another Suva based regional organisation, the South Pacific Bureau for Education Assessment into the SPC.
“Fiji is very concerned about the process through which recommendations from senior officials about the preferred regional institutional framework particularly the interpretation thereof, may have been put to leaders for a decision,” the paper stated.
“Furthermore, Fiji believes that the format of the retreat further isolated leaders from senior government officials who would otherwise have provided advice that was more effective leading up to the leaders meeting.”
Fiji said the decision on SOPAC and SPBEA was unfortunate.
“This exercise takes the developing Pacific Island States back towards the days when there was just one regional organisation, the former South Pacific Commission. It was an arrangement that was rejected by the Pacific Island Leaders then because their voices were drowned out by the metropolitan members of the organisation.”
Acting Secretary General of the Pacific Islands Forum, Feleti Teo told journalists there were only two country initiative papers prepared by Samoa and Vanuatu are on the agenda of the Leaders Meeting.

AFL chairman sacked

AFL chairman sacked
By TIMOTHY NAIVALUWAQA- Friday, August 15, 2008

www.fijitimes.com

AIRPORTS Fiji Limited chairman Digby Bossley has been dismissed by the interim Government barely a year after taking up office.
Interim Public Enterprises Minister Aiyaz Sayed-Khaiyum confirmed yesterday Mr Bossley's services were terminated on Wednesday.
When asked for a reason, Mr Sayed-Khaiyum said "All I can say is that Mr Bossley's appointment has been terminated."
Mr Sayed-Khaiyum said Public Enterprises permanent secretary Pio Tikoduadua has been appointed to the board and that an acting chairman's position would be announced soon.
Mr Bossley refused to comment and directed queries to Mr Sayed-Khaiyum.
Fiji Public Service Association general secretary Rajeshwar Singh welcomed the decision and urged the Government to carry out further changes at top management level.
Mr Singh said Mr Bossley's failure to settle company obligations could be a reason for his removal.
"I think his removal is for the better because since his appointment he was not able to deliver anything.
"This is a very good decision and Mr Bossley's replacement should take his cue that if they do not work, dialogue or negotiate, it will not be accepted."
Last month, the FPSA issued a strike notice for the company's failure to resolve outstanding issues dating back to 2000.
About 200 FPSA members are expected to walk off their jobs on August 29.
Mr Bossley was appointed chairman mid last year following the resignation of Rick Rickman.
It's believed Mr Rickman will hold the fort until an appointment is made.
Yesterday he was unavailable for comment.

FDB chief sent home

FDB chief sent home
TIMOTHY NAILAVUWAQA and MARGARET WISE - www.fijitimes.com
Saturday, July 05, 2008

FIJI Development Bank chief executive officer Tukana Bovoro was forced to take leave two weeks ago.

Yesterday, he said the reasons behind the move were still a mystery to him.

"Yes, I am on leave and I don't know when I will start," he said last night.

Board chairman and acting chief executive officer Taito Waradi did not return calls placed to his office.

Finance permanent secretary Peceli Vocea said the ministry did not manage FDB and all queries related to the bank's operations should be addressed to board members.

When told it was at the directive of interim Finance Minister Mahendra Chaudhry that the bank had restructured its lending policy, Mr Vocea insisted "we have nothing to do with Mr Bovoro's leave".

Fiji Bank and Finance Sectors Unions general secretary Pramod Rae said his members had been in the dark and the chairman was not responding to calls. He said the silence and mystery surrounding Mr Bovoro's leave was "not good for the bank, not good for the staff and not good for business".

He said the board should be open and transparent because the bank was like a ship without direction, especially when it was being restructured.

"The chairman is not responding to our queries. How long will this go on?

"They should resolve this quickly because it is odd that is happening while a major restructure is going on.

"The man who is supposed to lead the change is not there.

"It's like a ship without direction. We are anxious and I want to get to the bottom of this because I have to protect my members' interest.

"We had signed an agreement on the restructure but it was held up for two weeks. We are just starting again and it's just left for the bank to implement it."

Mr Bovoro had earlier said staff at the bank would be given a choice to take a redundancy package and would not be sent home against their will.

He said records showed agricultural and small business loans had resulted in heavy losses for the bank.

Earlier this year, the FDB acted on Mr Chaudhry's call for it to relook its operations by halting corporate and housing loans, which made up $298.44m worth of loans or 76 per cent of the loans portfolio in 2006.

With 5888 accounts at a value of $392.69m at the end of 2006, 76 per cent for home and corporate loans was $298.44m.

Election not ‘magic cure’ to Fiji’s ills: Naidu

Election not ‘magic cure’ to Fiji’s ills: Naidu

www.fijilive.com - 17 JUN 2008

The national election is not the ‘magic cure’ for anybody’s ills, let alone Fiji’s economy, says a strong advocate for the country's early return to democratic rule. Prominent Suva-based lawyer Richard made the comment during a panel discussion at the 36th Fiji Institute of Accountant’s annual congress, which ended at the Shangri-La’s Fijian Resort in Nadroga on Saturday.Naidu was responding to a question posed by Pacific Sun’s general manager Manoa Kamikamica who asked whether the election was the genuine answer to moving Fiji forward to a stable and investor-friendly environment.Kamikamica said most questions for the corporate sector in Fiji centred on investment plan and stability.“In terms of moving forward and really moving forward to the future, how difficult will it be without an election, because Ratu Joni yesterday was talking about the abrogation of the Constitution in order to have an election? To actually get things moving forward, do we need to have an election? “It’s not the election,” Naidu responded, adding the election was but one demonstration of Fiji’s ability to follow the rule of law.“The election itself is not a magic cure for anybody’s ills. It’s about following the rule of law and staying within the framework of the Constitution because that’s what investors want,” he said.“They want a stable, understandable set of rules that doesn’t change,” he added.Naidu said for the last 20 years, things had changed. “You have a coup, everything changes, nobody knows what the law is, and nobody knows what the rules are.”During the panel discussion on Saturday, Naidu asked about 300 delegates to raise their hands if they believed that the interim Government was an investor-friendly regime. No hands went up.“Government has got to ask, not tell,” said Naidu.“There’s no point telling us all of the great things that you’re doing to make yourself investor friendly if the community…and this is the investment community, does not believe you,” Naidu said of Government. “It’s about confidence and you cannot have confidence until you have rule of law. And so the elections is not the solution but the elections is the demonstration that we’re actually prepared to go back to the rule of law and stick to it,” he said.“It’s five hard years before anybody will believe us that we can actually stick to the promise. So, the sooner we make a start, the better,” he added.

Shock move by FHL board

Shock move by FHL board

www.sun.com.fj - 6/15/2008

A veil of secrecy surrounds the future of a Fijian investment company's board and managing director.
Fijian Holdings Limited managing director Sitiveni Weleilakeba and some of the board of directors are understood to have resigned following a board meeting last Friday.

Mr Weleilakeba could not be reached for a comment last night. His partner Laisa Digitaki said yesterday Mr Weleilakeba would not be making any comment to the media as yet.

In his capacity as FHL's managing director, he is also chairman of this newspaper's board of directors.

Those who have resigned include chairman Joe Mar, group managing director Mr Weleilakeba, directors Tui Maleikai, Mohammed Asif Razak and Ioane Naiveli.

Those who remain on the board include Ulaiasi Baya, Isoa Kaloumaira and Robin Storck who now becomes the chairman.

Mr Storck said he was not aware of the reasons behind the resignations of the other board members.

“From what I know, they resigned voluntarily and only they know the reason for their resigning,” said Mr Storck.

He said the new changes were in the best interest of the company and the decision was made by B Class shareholders. Newly appointed to the board are businessman Padam Lala, Basic Industries chief executive officer Sereana Qoro and Fiji Military Force acting chief of staff Colonel Mohammed Aziz.

No comments could be obtained from them regarding the appointments.

Ms Qoro is tipped to replace Mr Weleilakeba as the group managing director. Colonel Aziz was appointed deputy board chairman.

No confirmation could be obtained from board members on the reasons for their resignation.

Fijian Holdings Limited is an equity investment company. The company's subsidiaries include Basic Industries Limited, Blue Lagoon Cruises Holdings Limited, Clariti (South Pacific) Limited, FHL Securities Limited, Fijian Property Trust Company Limited, Fiji Industries Limited, Fijian Holdings Trust Management Limited and Merchant Finance and Investment Company Limited.

Former company executive Laisenia Qarase declined to comment on the changes to the FHL board.

The new board is expected to release a media statement on Tuesday to inform the company shareholders on the changes.

Fund shortages nothing new: SDL

Fund shortages nothing new: SDL
http://www.sun.com.fj/ - 6/10/2008

The shortage of funds in many Government departments is nothing new, says a major political party.
Soqosoqo Duavata Ni Lewenivanua party national director Peceli Kinivuwai said ever since the December 2006 military coup the State has been facing money problems.
The reports have been strongly denied by Interim Finance Minister Mahendra Chaudhry.
Reacting to media reports claiming the State had no funds for planned projects Mr Kinivuwai said the problem had become serious.
“There are reports that the one-third cash contributions already paid into government for self-help projects cannot be refunded because of shortage of funds.
“Owners of these projects have asked for refunds because they have waited too long for the implementation of their projects. Some of them have waited since December, 2006. They want their funds back so that they can use them for other investments,” Mr Kinivuwai said.
Mr Kinivuwai said the release of funds is the primary responsibility of the Ministry of Finance. He has blamed the interim Minister of Finance, Mahendra Chaudhry for the current problems. Mr Kinivuwai said that Mr Chaudhry is so obsessed about achieving a budget surplus at any cost.
“Mr Chaudhry knows that the easiest way to achieve this is to withhold essential expenditures.
“As a result of this disastrous policy our roads are in very poor conditions; water supply problems continue; there are serious shortages of drugs in many hospitals; students are starving; rural development projects have ceased, and the list goes on,” said Kinivuwai.
Mr Chaudhry in response to the report said the media company that ran the story was ill-advised.
He alleged that the media company was bent on discrediting the interim government and its work

Consumer Council Questions Air Pacific

Consumer Council Questions Air Pacific
www.fijivillage.com - 10/06/2008

The Consumer Council of Fiji has questioned the International carrier, Air Pacific on why it has decided to increase the air fares from Fiji to Australia and New Zealand when it is making a record profit of 38.2 million dollars.Council CEO Premila Kumar said a record profit of such an amount was made despite being faced with numerous hurdles last year including rising oil prices and the grounding and rescheduling of a number of flight disruptions at peak season.She said Air Pacific together with Expedia is running huge promotions overseas to lure tourists to Fiji by offering great incentives and discounts while the local consumers get nothing in return.Kumar's comments come after Air Pacific announced that it can no longer sustain current fare levels with the price of fuel reaching record highs thus it will increase its fares from Fiji to Australia and New Zealand by approximately 4% for tickets issued from tomorrow.Chief Executive Officer John Campbell has confirmed the hike saying that this is no surprise move, even though the airline has effective internal cost management and fuel hedging. Despite numerous attempts, Campbell has not made any other comment to our queries. Air Pacific operates 22 services weekly to the Australian cities of Brisbane, Sydney and Melbourne as well as services to Auckland twice daily and to Christchurch twice weekly.

Performance Reflects Leadership:Economist

Performance Reflects Leadership:Economist
www.fijivillage.com - 09/06/2008

A leading Economist believes that the current poor state of the economy is because of lack of good leadership to take the country in the right direction.Dr Mahendra Reddy, while strongly denouncing claims by the interim Finance Minister that the country is on the mend, said most pacific islands countries economy are not doing well because there is a leadership problem.Reddy said Fiji's economy has faced a lot of uncertainty from January which in turn has contributed a lot to investors losing confidence.This comes after Interim Finance Minister Mahendra Chaudhry that the economy is on the right track and there are positive indicators that the economy is definitely on the mend in the short span of 15-18 months, compared to the highly precarious state it was in when they took over from the Qarase led SDL government. According to Chaudhry, Fiji's Foreign reserves have stabilized, the Government's debt levels have declined to 47% compared to the 52% under the SDL led Government, the Budget deficit has been contained to less than 2% from 5% of the Gross Domestic Product, and the interests rates have also declined from 14-15% right down to 7%.

Development bank braces for restructure

Sai's Comment: 7 June 2008

- Chaudhry's directive to FDB reminds me of a former NZ Finance Minister, Robert Muldoon. I would therefore not be surprised if the result of such interventionist approach will be the same-disaster! Economically, it does not make sense to direct FDB to concentrate on one sector. In fact, FDB will not survive unless it has a diverse portfolio of loans. The market in Fiji is small and already competitive. No wonder, loans applications have reduced both in volume and size. Otherwise, government has to make available some type of ongoing support or subsidy thereby further raising on tax payers. Chaudhry and his lot should not be making such drastic changes to FDB's policies as they are merely INTERIM government. The sooner they're gone come the elctions the better it will be for FDB and its customers.

Policy shift forces FDB to cut costs

www.fijilive.com - 08 JUN 2008

The Fiji Development Bank says it will need to cut its operating costs to keep its margins.This comes as its commercial loan books begin to shrink leading to reduced income following a government directive to change its lending focus, away from commercial to resource based, manufacturing and the micro loans sectors.FDB chief executive officer Tukana Bovoro said if the bank was unable to cut costs then the Government would be required somewhere along the line, perhaps in a couple of years to start putting capital in to plug possible losses.However, plans are now being put in place to ensure that this does not happen and this includes realigning staff needs to the new structure as part of the bank's cost-cutting measures.On how much FDB would lose because it has stopped lending to commercial customers, Bovoro said he could not really quantify that."The fact is that as our commercial loan books begin to dwindle, income will begin to be reduced accordingly,” he said.“Really the option for the bank is to reduce its costs so that the margins are still there.”Early this year, a government directive was given to the state-owned FDB to cut down its commercial and home lending and expand its agricultural loan portfolio.However, Bovoro indicated that the FDB's initial target over three years, was to increase loans to what it then termed as the Agriculture & Development Finance Sector to 50 per cent of the bank's total growth portfolio.“So the directive not only reinforced the direction the bank was heading but also clearly articulated what the FDB needed to achieve the interim Government's wishes,” he said.FDB had set itself pretty tough targets in trying to change its portfolio mix over the next three years, however, given the new direction, and that not much growth is expected out of its commercial book, the desired ratio of 60 per cent in focus sectors and 40 per cent in the non focus sectors, may now be possible, he added.FDB's initial intention was to go into the agricultural sector but with the support of its commercial books, which Bovoro said were very important in enabling the bank to refocus its attention.“The danger here is that we no longer have the steady income (from the commercial loans) required to steady the volatile nature on lending to the resource-based sectors,” he said.“That is the challenge the bank has and management and the board are already in discussions on how this is to be addressed.”He said the bank would look at providing loans to different sectors in the agricultural industry including dairy, beef, agricultural crops, coconuts and bio fuels.Given the increased prices in imported food and milk product, this is an opportune time for the bank to enlarge its portfolio in these sectors, however this must be approached with some caution given the associated risks, he added.“It must be remembered that FDB’s new focus sectors are volatile, very susceptible to environmental factors like the weather apart from the normal business risks like markets and so on,” Bovoro said.However, at the end of the day, the Government owns this bank, and the bank will articulate and implement government’s policy directives, Bovoro pointed out.On how much capital the Government gave the FDB every year, Bovoro clarified that government has not given the bank any capital for some time."Government provides us with interest subsidies that enable the bank provide subsidised loans to the agriculture and other sectors determined by government,” he said.In the last two years, Government subsidies have been in the range of around $3.7 million.“I think that it is important to note that even without Government subsidies the bank has been able to operate on a sustainable level, and this is a positive note about FDB’s operations to date,” Bovoro said.“The positive thing about this is that it places the bank in a stronger position to begin to do what is has been tasked to do now.“However, going forward, the challenge for the board and management will be how to continue in the same manner without depending on Government subsidies for its bottom line.”

Development bank braces for restructure

http://www.fijitimes.com/ - 07 JUN 2008

From July this year, the Fiji Development Bank will begin changes to the structure of the bank, rewriting its policies and repositioning its staff as part of a move to refocus its attention on agricultural lending. Interim Finance Minister Mahendra Chaudhry in January had given a directive to the state owned FDB to cease all corporate and housing lending and focus on agriculture. The directive was heavily criticized by industry observers who said the bank must be allowed to maintain a diversified loans portfolio if it was to survive Fiji’s very competitive banking industry. Four months on, the FDB chief executive officer Tukana Bovoro said that in compliance with the minister's directive, the bank has stopped its lending in commercial lending areas. But he also pointed out that very little business is coming in now for the bank as a whole. "The small loans are still coming through. But the level of loan applications has really gone down." On its lending to the agricultural sector, Bovoro said it was too early to judge." The first thing that we have done now is restructure the organisation.“ We have to do that because when we started off we were building an organisation that was going towards obtaining a retail banking license." But we have now been told to change direction, and concentrate on this - resource based industries, manufacturing and micro loans." So apart from changing the structure of the bank, we have got to rewrite our policies and procedures and reposition our people.“ We will go into that from July 1. That is when the structure will be in place, staff place in their new roles and the bank's new KPI kicks in."Bovoro said that in order for the bank to really get in there (agricultural sector) it needed to redevelop policies and procedures and for certain areas of the business, then to market these products into those sectors. “That does not happen overnight,” he said." So we are developing our marketing plans and when things are in place, we are going to roll the people out to do those things. So it is a big shift in the way we are doing things." He said the bank will have to work with other stakeholders including agriculture, fisheries, forests, the dairy industry, the Fiji Meat Industry board, agro marketing "to find out what else we can do together to push the production of those sectors". Meanwhile, this week the Bank Employees Union agreed on the voluntary redundancy package offered by the FDB.

No need to ‘copy’ Singapore’s civil service

No need to ‘copy’ Singapore’s civil service

www.fijilive.com - 06 JUN 2008

There is no need for us to visit Singapore to find ways of how Fiji can improve efficiency in the civil service, says a former Education minister. Nelson Delailomaloma, who was part of Laisenia Qarase’s interim regime after the 2000 coup said our civil service has a long history of inefficiency. “It is multi-layered, there are about 9-10 layers from the permanent secretary down to the clerical officers and to the PAs and to the secretaries,” he said.He made these comments at a panel discussion in Suva yesterday on the theme ‘The economic challenges and lessons to raise Fiji’s competitiveness’.Delailomaloma proposed that the civil service and players in the private sector alike should ensure it was customer-focused, an organisation with a flat structure and high productivity.He said productivity was “absolutely” essential for economic success.“What we need is a restructure in the civil service. For the sake of the people in the civil service themselves, people there have the abilities of doing whatever there is that needs to be done to restructure the civil service, so that it becomes much more effective in their decision then it is at this point in time,” Delailomaloma said.He said he also believed that people actively involved in politics should be well equipped with a vast knowledge of economics to assure the country’s economic growth.Governments’ inefficiencies and near-zero productivity is a result of policy-makers who lacked knowledge of national economic development, he said.He added that in the past, some organisations were independently resourced and operated, which indicated that there were sufficient people to create those things needed to promote the idea of productivity.“Now, I wonder therefore, quite often, whether people who have been determining our policies in government in relation to economic development make it understandable,” Delailomaloma said.“…. let’s insist that those who stand for politics have a university degree in economics before they can qualify,” he said.“This will allow them to be able to understand what economic development is all about, what national development is all about,” he told participants at the Training and Productivity Authority of Fiji (TPAF)-organised productivity symposium. Participants included chief executive officers and executives from both the public and private sector.

Transtel launches home-grown Yehdo!

Transtel launches home-grown Yehdo!

www.fijilive.com - 05 JUN 2008

People in Fiji, particularly those in rural and geographically-isolated areas, can now pay their bills or purchase goods and services from the comfort of their own homes with the launching of Yehdo.Yehdo is a reloadable debit card which provides a convenient and easy means of payment of bills, purchase of goods and services, and for the transfer of value for use by everyone in the country, and would be available from any place, any where, anytime.This product, the brainchild of young local skills in the company, is expected to be rolled into the region and eventually hitting overseas markets.And the Reserve Bank of Fiji (RBF) has applauded this initiative saying it is encouraging to see companies like TransTel take on new initiatives during such challenging times in the country.RBF Governor Savenaca Narube reiterated the RBF’s call that Fiji companies must push forward and that businesses must go on.He said it was pleasing to note that innovations as such was alive in a critical sector like telecommunications reasoning the sector played a key catalytic role in the economy.“It determines the efficient flow of information across the country and to the rest of the world. And we all know that information is power. Business cannot survive without an efficient transfer of this information,” Narube said.He said now with a deregulated telecommunication industry, “we can be guaranteed that the motivation and incentive to fulfill customer’s demands will be stronger than ever before”.He added in today’s business world, the expectations of customers on telecommunications were very high as they know what was available globally. “They want to have the kind of service they want, when and where they want it. It is not good enough for telecommunications providers to simply meet these expectations but more importantly they need to anticipate them,” Narube said.He said the new product was created in the realization that the telecom industry could and and does have a positive impact on human lives by the use of new technologies. “Advancement in the telecommunication sector and in particular the internet has, in the developed world at least, presented the market new and convenient ways of interaction between the customer and the supplier of goods and or services,” Narube said.“Customers are now able to dedicate a lot more of their time and energy to pursue their economic goals rather than being at a queue or traveling to one, to pay for goods or services.”TransTel chairman Pratap Singh told Fijilive that this product would be stretched out to the region in 12 months time with the possibility of expanding it abroad.He said all in Fiji could use this product as transactions could be made via plain old telephone (POT), EFPTOS machine, internet, and mobile phones.He said this particularly benefits rural communities where the only means of communication with the rest of Fiji is often via the Telecom Fiji phone system. “Yehdo will inculcate our corporate responsibility – to conduct business in a way that meets social, environmental and ethical concerns. We have leveraged our core competencies and business knowledge and are convinced that Yehdo will have a positive impact on everyday lives of our people while still providing a viable business solution,” Singh said.

Govt ‘has no say’ in Commerce Commission

Govt ‘has no say’ in Commerce Commission

www.fijilive.com - - 06 JUN 2008
The Fiji Government has no say in the decisions of the Commerce Commission, says chairman Charles Sweeney.However, in the case of the Fiji Electricity Authority, the statement by the interim Finance Minister was made in government’s capacity as owner of FEA.Sweeney says Mahendra Chaudhry’s decision to halt the increase in fuel tariffs was not an indication of the government having authority over the Commission.“In a price control matter, such as the FEA matter, a company subject to price control is entitled to make a request for an increase if, for example, its costs are increased by an event outside its control,” he explained.“This is what FEA has done. The first application for an increase was refused by the Commission because it had been caused by the government's decision to increase the tariffs which FEA had to pay on its petroleum purchases.”He said the Commission considered that since this was a decision of the government and since the government was the owner of FEA, FEA should be left to work through the consequences of a decision of its owner without being able to pass on the extra costs to electricity consumers.The second application by FEA, he said, was based on an increase in the cost of petroleum arising from the increase in world prices. It was not based upon the tariff change,” said Sweeney.He said it was important to understand that the Commission only authorised FEA to increase its charges to a new maximum price.“The decision whether to do so or not is a decision for FEA. Generally, however, the Commission assumes that firms do not seek price increases unless they intend to actually charge them if permitted to do so,” Sweeney said. He said Chaudhry’s decision to halt the increase was a matter for FEA and its relationship with the Government and that this did not affect the Commission's position.“The government has not made any attempt to influence the Commission in relation to FEA's application for a price rise,” Sweeney said.“The Commission is extremely careful to preserve its independence. That independence is the cornerstone of the Commission's credibility as an economic regulator.”

Fiji growth ‘at bottom of HDI pile’

Fiji growth ‘at bottom of HDI pile’

http://www.fijilive.com/ - 05 JUN 2008

Productivity growth in Fiji has averaged 1 per cent over the ten year period from 1996 to 2006 which when compared to other countries is somewhere at the bottom of the pile, Reserve Bank of Fiji governor Savenaca Narube warned.And he said that with Fiji slipping in world rankings in the United Nation’s Human Development Index (HDI ) (Fiji, at 92, is about halfway on the ladder), in economic performance and in the ease of doing business among other things, he said Fiji has a lot of catching up to do with other countries. He suggested that productivity could contribute to solving Fiji’s problems.Speaking at a Productivity Symposium at the Holiday Inn today, Narube said there was a lot of waiting for Government to do something – “introduce more incentives, set up committees, appoint think tanks, make laws – you name it - before we can do our own thing”. “But if I may boldly tell you this morning - this waiting around is a waste of time and money! “Productivity is one of the few things that we can do something about without any help from anyone. The ball is clearly in our court,” he told about 50 chief executive officers at the symposium organised by the Training and Productivity Authority of Fiji. He said Fiji needed to raise its investment to over 25 per cent of GDP. “We need to support and promote local investment. But this is not enough. We need to attract foreign investment,” Narube said. “Here, we are competing for the same investment dollar with some bigger and richer countries.“Investors look at several things before they invest. They look at the environment – political, economic and social. They look at government policies and regulations and how these are applied. Investors look at the state of the infrastructure. “Finally, investors also look at the quality of labour and their unit cost. The efficiency of capital is a key decision maker. Productivity therefore becomes an important issue for investors,” he added. Narube said exports must drive Fiji’s growth. Exports must be the key driver of economic growth for a country like Fiji, he pointed out. “There is, in my view, no other way to grow the economy in a sustainable manner. When we export either goods or services, we are competing with other countries supplying the same products.”He said Fiji cannot rely on preferential access anymore, something he said was being reduced. Fiji must compete not only in prices but also in quality, he added. “We are competing with many countries which have low-cost structures and high productivity,” Narube said. “Our work is cut out for us. Therefore raising our productivity level must be a priority. If we cannot compete in this integrated world, we perish - simple as that.”But how is Fiji to raise the productivity in its export sector? For Narube, Fiji must change how it does things. “Productivity in the cane fields and the sugar mills are critical to the sugar reform. We must change how we work our agricultural sector,” he said. Narube warned that the existing model was clearly not working. “Our land is fertile. We have the best pawpaw in the world, the tastiest bananas and the sweetest pineapples but alas we are not even supplying enough of these to our hotels and supermarkets,” he said. “Our oceans are large yet the price of local fish keeps rising. Our mahogany forests are mature, yet we are not exporting high valued timber products. Obviously, something is seriously wrong and we need to correct that urgently.”He said there was a tendency to talk a lot about the potential of small businesses to raise growth and provide incomes and employment. “Again, while we continue to talk, we see very little progress in this important area,” Narube said.“Are we following the right model? Where is the bottleneck?Narube said Fiji should acknowledge and accept the significant role that productivity and competitiveness could play in overcoming many of its economic challenges that it faces particularly that of lifting economic growth, attracting investment and supporting exports. “More importantly, we need to do something about this now at all levels, micro as well as macro.”

May inflation drops to 5.8% 05 JUN 2008
Inflation in May fell to 5.8 per cent from 7.6 per cent recorded in April.This compares with an inflation rate of 6.6 per cent in May last year, according to the Reserve Bank of Fiji’s latest Economic Review. For the first time since September 2007 consumer prices declined by 0.1 per cent over the month. The fall in prices were led by lower costs of food items and clothing and footwear. Marginal decreases in charges for preserved meat, fresh and preserved fruits, spices, top dressings, confectionery and some vegetables and rootcrops underpinned lower prices in the food category. Moreover, cheaper costs of men’s and children’s wear underpinned the decline in the clothing and footwear category.Consumer prices in May have weakened partly due to base related effects and some improvement in the supply of primary produce (vegetables and root crops).The removal of value added tax from eggs and fiscal duties from rice, tinned fish and cooking oil - effective since June 1 - and the base related effects will result in annual inflation trending downwards for the next few months.However, a pick up in inflation is expected towards the later part of the year, the RBF said.

Fiji job advertisements up: RBF - 05 JUN 2008

Fiji’s labour market conditions appear to have improved in some sectors including manufacturing and mining, according to the Reserve Bank of Fiji. Cumulative to April, the RBF said the number of jobs advertised rose by around 9.5 per cent when compared with a year ago.“The demand for labour was higher mainly in the manufacturing; electricity and water; mining and quarrying and community, social and personal services related firms.”The RBF said the increase could be attributed to some expected improvement in business confidence and general optimism of economic activity this year coupled with emigration of skilled workers.

Intra-regional travel ‘future of tourism’ - 05 JUN 2008

The future of tourism in the Pacific, particularly in Fiji, lies in intra-regional travel by tourists, says interim Tourism Minister Tom Ricketts.He said Fiji’s tourism industry was faced with a lot of enormous challenges, one of which was that highlighted by the World Tourism Organisation (WTO) – the accelerating changes in the travelling pattern.“With the insecurity of travel, be it perceived or real, there is no doubt that the future of tourism lies in intra-regional travel with a growing preference for short break vacations close to one's home,” Ricketts said. “According to the WTO, about 80 per cent of the international tourist arrivals were short-haul regional holidays,” he said while officially opening the annual Bula Fiji Tourism Exchange (BFTE) at the Warwick Resort in Sigatoka last night. “We must work together to capitalise on this increasing trend night.”He said over the past ten years, the BFTE had gained a formidable reputation as the largest trade show in the South Pacific, continuing to attract tourism organisations and operators from throughout the region with a majority still from within Fiji. “This event gives Fiji and the Pacific region an opportunity to market its products,” he added.Ricketts said success in tourism must also be built on the strengthened partnership between private and public sectors. He said Fiji’s effective tourism revival campaign after the events of 2006 were possible with the close public and private co-operation that the crisis brought about. “Thirdly, WTO reminds us that competition is the key driving force of change. One key development is the use of information technology which has brought ever closer the distance between travellers and a destination,” Ricketts said. “The competition among destinations is intensified and has become globalised.” Ricketts said: “The BFTE brings together the regional tourist operators and the wholesalers from different parts of the world.“We hope that apart from renewing old relationships, new ones will be made and that the end result will be a growth in new business opportunities for both parties.”He reminded all players in the tourism industry that they needed to grow tourism to benefit their people.“Our aim is to exceed the expectation of our visitors,” Ricketts said.“We want to establish Fiji as a unique destination and ensure that the industry is seen as a benefit to all by embracing social and cultural traditions and practices while minimising the impact on our ecology.”

$200m worth of projects on hold

$200m worth of projects on hold
27 MAY 2008 - www.fijilive.com
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Fiji’s capital Suva would have been a hive of construction activity now if three proposed projects with a total value of around $200 million had been given the green light to go ahead.

On hold are the proposed multi million dollar Suva Market (projected to cost around $30m), the upgrading of the Grand Pacific Hotel (projected at $42m) by the Fiji National Provident Fund (FNPF); and the proposed high class apartment block, conference centre behind the Bowling Club also by the FNPF, a project believed to cost over $100m.

These major projects were put on hold after the December 5, 2006 coup by the military government after the takeover of the Qarase government.

Even if the proposals get the thumbs up now, it would likely take a year and a half for them to get off the ground, Suva City Council director engineering services Jagdish Singh said.

According to him, there were a lot of developments happening prior to the December 5 coup in 2006 but developments slowed after the political upheaval. “People are not willing to invest.”

More people withdraw pension fund

More people withdraw pension fund
26 MAY 2008
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The Fiji National Provident Fund (FNPF) has recorded an increase in the number of members wanting to take their superannuation abroad.

The FNPF received 2581 applications from January to December last year, compared to 2433 the previous year.

FNPF chief executive officer Aisake Taito said in 2006, 2070 applications were received from locals and 363 from expatriates.

Of these, only 2265 applications were approved with a monetary value of $38.9 million.

In 2007, Taito said the Fund received 2581 applications; 2201 from locals and 380 from expatriates.

He said only 2402 applications, worth $39.9 million, were approved.

From January to April this year the Fund has received 739 applications from locals and 102 from expatriates.

Taito said the Fund has approved and processed 741 of these applications worth $12.7 million.

When asked if the overthrow of the Qarase Government in December 2006 had an impact on the increasing number of applications, Taito said: “Migration is a personal choice made by individual members. The FNPF only facilitates members request to withdraw for resettlement overseas”.

He added: “The Fund continues to register new members and that there was an increase of 3.75 per cent in membership for the financial year 2007”.

Taito said this translated to about 12,000 new members for the Fund comprising both those entering the labour market as employees and those registering as voluntary members.

Fuel price to increase
26 MAY 2008
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The local price of fuel will increase from today, the Price and Incomes Board has announced.

The wholesale and retail prices of motor spirit, pre-mix outboard fuel, kerosene and diesel will all increase.

This is due to the significant reduction in OPEC crude oil supply due to field maintenance in oil producing countries and tight demand for distillates together with the continued weakening of the US Dollar, a statement from the PIB said.

As of tomorrow, the new retail price of kerosene per litre will be $1.67 (up 13 cents), diesel/litre will be $1.95 (up 13 cents), premix outboard fuel/litre will be $2.12 (up 3 cents).

Garment customers threaten to pull out

Garment customers threaten to pull out
27 MAY 2008 - www.fijilive.com
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Efforts by a garment factory in Fiji to increase the prices of its garments have been resisted by its customers.

Mark One Apparel boss, Mark Halabe, said their customers had resisted any intention to increase garment prices by threatening to pull out of Fiji.

Halabe says their competition is from China where the currency used for exports is the $US dollar.

“Over the last two years the $US dollar/$AUDI has been in the favour of Australia of at least 30%. While in 2010 Fiji's trading preferences into Australia will decline by 7.5%,” he explained.

Halabe said their customers saw Fiji as an expensive manufacturing country and with any increased cost of doing business, such as the Employment Relations Bill, was of no help.

“It doesn't help our ability to increase export sales, increase employment or investments,” says Halabe.

Halabe said with the introduction of the ER Bill, his company stood to lose $160,000 each year for the maternity clause, doubling of sick leave pay, redundancy and bereavement clause.

“On a payroll of over $2.5m this is not an insignificant amount of 6.4%. In addition employers have had to pay increases in wages and salaries which would be in the same order over the last 12 months. So increases of near 13% are simply unaffordable to our international customers,” he said.

Halabe has called on the government of the day to offer business owners some relief by means of a 150% tax deduction.

Another option it has suggested in which the interim government can assist is for to offer to pay 50% of maternity pay or allow the employee to fund 50% from their FNPF funds.

Halabe says the ER Bill has other costs that the media has not picked up on including the doubling of the allowable sick days, redundancy pay and the softening of the definition of bereavement pay.

“All these additional costs only hinder Fiji's ability to compete in the international market as there was no productivity offsets,” he said.

Easy to do business in Fiji

Easy to do business in Fiji, says report
Last updated 5/26/2008

Fiji has been ranked the highest in the Pacific as a country where they can easily do business according to a recent World Bank report. The report titled “Doing business in small islands developing States 2008” covers figures collected between April 2006 and June 2007.
The report highlighted areas compatible for developing countries to do business.
Fiji is ranked fourth against 32 other developing countries and ranked just below Singapore, Maurictius, St Lucia and Mauritius and ranked 36 in the world economies rank.
The report found that small island developing states like Fiji performed well in three Doing Business areas, dealing with licenses, employing workers and paying taxes, relatively well on the ease of starting a business, protecting investors, and trading across borders.
According to the report, priorities for reform in most of these countries are closing a business, getting credit, registering property, and enforcing contracts. Doing Business analyses government regulations that enhance business activity and those that constrain it in 178 countries, including 32 SIDS economies: Antigua and Barbuda, Belize, Cape Verde, Comoros, Dominica, Dominican Republic, Fiji, Grenada, Guinea-Bissau, Guyana, Haiti, Jamaica, Kiribati, Maldives, Marshall Islands, Mauritius, Micronesia, Palau, Papua New Guinea, Samoa, São Tomé and Principe, Singapore, St.Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Seychelles, Solomon Islands, Suriname, Timor-Leste, Tonga, Trinidad and Tobago, and Vanuatu.
They recommended for country’s to learn from each other and that if they were to adopt the practices of each top performer in the region on the 10 areas measured by Doing Business, they would rank second globally on the overall ease of doing business.

Cost Of Business High: Halabe

Cost Of Business High: Halabe
www.fijivillage.com - 25/05/2008
A leading Garment Factory owner and Managing Director of Mark One Apparel Mark Halabe said with the implementation of the Employment Relations Bill and its Maternity clause, the cost of business in Fiji has gone up.

Halabe said his personal view is that the maternity clause is unfair to the employer both financially and morally.

He told Fijivillage that to pay an employee full maternity pay for three babies and fifty percent for subsequent pregnancy will affect a company a lot.



Halabe said this will also affect our economy.



Meanwhile, under the ER Promulgation, a woman is to be paid her full pay during maternity leave for her first three pregnancies, while she would be entitled to half pay after the third child.

Leave Airlines Alone Politicians

Leave us alone: Airlines
www.sun.com.fj - Last updated 5/25/2008

Regional aviation heads are concerned about government interference in airline operations.
The Association of South Pacific Airlines secretary George Faktaufon said governments should just appoint the right people to management positions and let them run the airline.
Mr Faktaufon said government interference with Air Pacific in the 1960s had been near fatal as it proved to be a major failure.
Earlier in the week a cabinet task force was appointed to look into the operations and services of Air Pacific.
The four-member team comprises Civil Aviation Minister Ratu Epeli Nailatikau, Public Enterprises Minister Aiyaz Sayed-Khaiyyum, Finance Minister Mahendra Chaudhry and Tourism Minister Tom Ricketts.
It has been stated that the cabinet task force will look into staff grievances relating to the airline’s recruitment, training, promotions and delays to flight operations caused by mechanical problems to its ageing fleet of aircraft.
Over the past months Air Pacific aircraft have experienced mechanical problems and passengers faced difficulties as their flights were delayed.
Air Pacific chief executive officer John Campbell could not be reached for a comment on this issue.

Inflation rises to 7.6pc

10 MAR 2008 - www.fijilive.com
Fiji’s inflation last month rose to 7.6 per cent, up from 7.4 per cent in January, latest figures from the Fiji Islands Bureau of Statistics show.

Higher prices were recorded in almost all categories including food, alcoholic drinks and tobacco, housing, durable household goods, clothing and footwear, transport, services, miscellaneous.

Only in heating and lighting sector no change was recorded.

The All Item Consumer Price Index (CPI) for February registered an increase of 1.5 per cent over January and now stands at 156.7.

The Reserve of Fiji had last month warned that Fiji’s inflation would rise even further in the coming months. This
was after the January inflation rose to 7.4 per cent, the highest since 1998.

The RBF had said that disruptions in supply of market items caused by Cyclone Gene (late January) were bound to push inflation higher in the next few months.

The RBF had attributed the sharp increase in January inflation to the higher oil prices, some increase in duties from the national budget and some disruptions in local supply of vegetables.

According to Bureau of Statistics, last month food recorded the biggest increase (up 3.6 per cent).

Higher prices were recorded for bakery and wheat products, fresh and preserved meat, fresh fish, fresh fruit, fruit juice, dairy products, fats and oils, tea ovaltine, top dressings, confectionary and market items such as beans, English cabbages, chillies, cucumber, tomatoes, egg plant, rourou, bele, okra, tubua, cassava, pumpkin, peas, arhar and yaqona.

Marginal price increases were recorded for alcoholic drinks and tobacco (up 0.1 per cent). This was for a certain brand of alcoholic spirit and warm beer.

Housing was up by 0.1 per cent with marginal price increases for some house repair items.

Durable household goods were up 0.8 per cent with marginal price increases recorded for soft furnishing, jewellery and travel and sports goods.

For clothing and footwear (up 0.3 per cent) marginal price rises were recorded for men’s and children’s wear and men’s and children’s footwear.

Transport was up by 0.3 per cent, with new tyres and spare parts prices up marginally.

Services was up 0.4 per cent with marginal price increases recorded for education fees, medical fees and entertainment.

Higher prices were recorded for (miscellaneous) medical goods, toiletries, laundry and other household goods.

Overseas remittances drop by $64m

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."

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.

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.

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.”

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.