October 30, 2009

www.fijitimes.com - Friday, October 30, 2009

CANE Growers borrowed $22.59million from the Sugar Cane Growers Fund last year.

Fund chairman John May said during the year the fund approved a total of 2852 loans.

Given the difficult times, Mr May said the fund did well by achieving its purpose of lending to the farmers.

He said 2248 priority loans worth $2.17m for farm development, planting new cane and purchase and repair of farm equipment, were approved.

Mr May said 286 loans under specialised lending for purchase of new farms and machinery to the value of $4m were also approved.

He said 296 loans with a value of $1.4m were given to those with new leases and 49 loans worth $494,133 were given for refinancing.

In total, 935 loans were received in Labasa.

Jagjit Singh

www.fijitimes.com -Friday, October 30, 2009

With the new budget currently being prepared, it might be useful to reflect on Fiji's balance of payments in recent times. In particular, it might be wise to look at current global trends in substituting fossil fuels with renewable forms of green energy within the context of climate change.

Recently, the Governor of the Reserve Bank of Fiji outlined the constrained RBF policy to keep the value of imports to a point where it is below 5 per cent of the country's Gross National Product (Fiji Times, September 29, 2009).

In view of the current policies, it might be worthwhile to explore the country's economic and financial position since the 5/12 coup. While the data of 2009 is still being collected and summarised, it might be useful to examine the 2008 data for patterns and insights.

Trends in Fiji balance of payments

In 2008, the value of total exports was $F1.5 billion while the total value of imports was in the vicinity of $F3.6 billion leaving a deficit of $F2.1 billion. Given these figures, a number of critical questions arise with regard to what are the major imports, their approximate value and places of origin. Similar questions could in turn be raised about the country's exports.

Since 1985, Fiji has never had a surplus trade balance. In 2003 for example, the deficit exceeded a Fiji billion dollars. Strangely, the lowest trade deficit was in 1987, the year of the first coup.

Principal imports

During the year under review (2008) and for many years earlier, the principal import was mineral fuels (motor spirit, aviation turbine fuel, automotive distillate fuel and industrial distillate fuel) from Singapore. The value of these imports was approximately $F1.3 billion last year. In return, Singapore and indirectly the Middle East, imported relatively little of the Fiji products. The next major import item was machinery and transport equipment which in 2008 was $F726.5 million. Country of origin of these products was not reported in the government statistical bulletins and therefore not discussed here.

The third major imports were categorized as foods including fish for a total of $F520 million. Manufactured goods including textiles were a close fourth with a value of $F460.8 million. Surprisingly, the country also imported $F278.6 million of manufactured goods which included garments. Some of these imports were obviously used in manufacturing and re exported.

Import sources

Of the countries that contributed relatively large deficits to Fiji's economy were: Singapore $F1.2 billion, Australia $F526,859 million, New Zealand $F394,751 million, People's Republic of China $F149,224 million, India $F121,457 million followed by Thailand $F104,794 million. Of all the developed countries trading with Fiji, it appears that the trading partnership with Japan has been the most stable and fair. In 2008, Fiji imports were about $F81.8 million while the exports to Japan were about $F63.9 million, thus having a surplus of only about $F17.9 million in its favour. Fiji's best trading partner, however, has been the United Kingdom.

Principal exports by receipt

The total exports including re-exports amounted to approximately $F1.5 billion of which $F218 million was from sugar alone. Much of the sugar was exported to United Kingdom giving Fiji a surplus balance of trade of about $F187 million in 2008.

The next in food exports consisted of canned and fresh fish with a value of $F134 million and $F117 million respectively.

Dalo made only about $F22 million in exports in 2008. Exports of mineral water were around $F110 million. Exports of yaqona stood around $F5 million while copra recorded an all time low with no exports. It is presumed that much of copra was used to produce coconut oil which showed an export value of about $F8 million. Of the manufactured items, $F100 million worth of textiles and $F2.1 million of footwear were exported.

In 2008, about 21,000 fine ounces of gold worth about $F27 million of gold was exported. The re-exports including petroleum products was about $F488 million in 2008.

Strategies to improve balance of payments

There are two obvious strategies in obtaining a healthy balance of payment. These strategies are: one, maximising import substitution and two, by correcting structural deficiencies inherent in our export products. The second item will be discussed first.

Correcting structural deficiencies

In many developing countries with colonial histories the export item has been oriented towards producing raw materials; very little, if any effort has been made in processing the raw materials. Generally, the value adding components were left in the hands of the colonisers. This structural deficiency continues to this day in many former colonial territories. In the case of Fiji, for example, raw sugar is being exported. Little effort has been made to refine the sugar and or explore new sugar products e.g. chocolates, Indian sweets and so forth.

Additionally, there seems to be little innovative marketing to explore the possibility of brand positioning with such labels as 'Fiji sugar' and retailed globally to airlines, restaurants and hotels in addition to selling the bulk to the European Union as is currently being done.

The processing element would generate much needed revenue and employment; hopefully it would also improve Fiji's balance of payments.

Innovative thinking could further explore processing and brand positioning of other food products within the context of 'healthy living and longevity' associated with the product in question.

Such strategies would also be a good forward planning exercise in preparation for free trade. Economic survival with the advent of World Trade Organisation (WTO), trade would require marketing the unique elements of a product to achieve global acceptance in face of intense competition fuelled by the law of comparative advantage devoid of protectionist policies. It is envisaged that WTO policies of non governmental intervention in trade matters would also include a less stringent movement of capital and labour.

Import substitution

As earlier noted, the major import item from Fiji was mineral products (fuel). It would thus seem only logical to explore alternative fuel sources. These could be either in form of biofuels or biodiesel. Biofuels could be produced from cassava, sugar cane, palm oil, sea weed, pogamia including possibly water melon. Additionally, coconut oil could be used in conjunction with diesel to reduce dependence on diesel fuels in agricultural and transportation industries.

The massive savings that would accrue from the production of alternate fuel sources could be used for investment in the biofuels industry. Biofuels production from cassava, for example could potentially generate thousands of jobs in rural Fiji. However, such alternate fuel sources could be done in conjunction with creative expansionary monetary policies and appropriate biofuels legislation.

While the current initiative of the Government towards increased production of food items such as rice is applauded, the savings from these products may be considered modest compared to the potential savings from locally produced green fuels.

With a view to having a vibrant stable economy, perhaps the Government could explore the benefits of 'fixed exchange rate' within the context of innovative monetary policies. Obviously this may necessitate a cautious restraint on gold exports.

Additionally, the expansionary fiscal policies could be geared to government spending on infrastructural needs of the country. This could result in improving rural roads, ensuring good quality drinking water in rural areas, rural electrification and telecommunications. Government is already committed to improving the living standards in rural areas; however this could be accelerated with domestically produced energy from biofuels, wind farms and the like. Such initiatives would contribute to a healthy balance of payments and with it a vibrant and stable Fiji economy (in Oceania), comparable to Singapore in South East Asia.

Concluding remarks

Following the global recession, it seems that innovative low carbon forms of green energy (for household use and use by business firms and municipalities) would be a way forward world wide, including in small island states like Fiji. It would seem that the depleting oil reserves, rising oil prices and the negative environmental effects of burning fossil fuels (with six undisclosed life destroying toxic gases) would hasten the technological developments of green energy in all sectors of the national economy.

An analysis of the Fiji balance of trade shows that the country continues to lose large amounts of money through imports. The most disturbing feature is the huge amount of money being spent on fossil fuels. It would thus seem reasonable to suggest that the Government make a concerted effort in reducing its dependence on fossil fuels by supplementing fossil fuels with Fiji produced biofuels as well as solar, wind and hydro generated energy.

Pursuit of these alternate forms of green energy would be in line with the recent global concerns about climate change and global warming resulting from excessive use of fossil fuels. Such measures would improve, too, our balance of payments and replace annual deficits with a surplus.

Jagjit Singh is a lecturer at the University of the South Pacific's School of Economics

October 28, 2009

Punja blames Fiji government policies for $6.4m loss

http://intelligentsiya.blogspot.com - October 27, 2009

Leading Fiji business figure Hari Punja has blamed State price control measures and what he says were arbitrary government decisions on duties and import policies for a $6.435 million annual loss suffered by the Flour Mills of Fiji Group, of which he is chairman.

Group chairman Hari Punja has described the loss for the 2009 financial year as “significant”, following a group before tax profit of $6,526,720 in 2008.

“The principal cause of this loss is the unfair treatment we continue to receive from the Prices and Income Board (PIB) and the arbitrary decisions of government in regard to duties and import policies,” said Punja in the group’s annual report.

He said the results were also affected by having to write off the value of the group’s rice milling assets and its discontinued water business.

“In the first half of the year we were constantly battling to have the price of our flour and rice adjusted in accordance with rising world prices. The constant delays in approving price adjustments by PIB resulted in mounting losses. This situation was then exacerbated following the devaluation of the Fiji dollar by the Reserve Bank. Overnight the cost of our raw materials increased by more than 20 percent and we were not able to pass on this increased cost for a considerable period, during which the group was incurring a loss of more than $ 1 million per month,” Punja said.

“Also during the year the government decided to arbitrarily reduce import duty on white rice from 15 percent to zero. There was no prior consultation and as a consequence we were in the unfortunate position of having to honor forward contracts for brown rice at a considerable loss.”

As a result, FMF Group subsidiary, the Rice Company of Fiji, has reported a loss $113,182 this year, down from an after tax profit of $2,164,375 last year.

Punja has called on the government to make policy and duty changes which affect local manufacturers only after consultation and with a reasonable period of adjustment.

He said the group had repositioned its subsidiary Rice Company to deal with the new import policy. However in the process they had stopped milling brown rice resulting in loss of jobs and a write off of machinery values.

“If it was the government’s intention to lower the consumer price of rice then they have failed. The lower price of rice which the consumers of Fiji are enjoying now is the result of low international prices and not because of the change in duty structure of rice.”

“On the other hand, these actions have resulted into government losing a considerable amount of revenue and making it almost impossible for local rice farmers and millers to survive.”

“These arbitrary decisions of government both present and past have been a constant frustration for us and other manufacturers,” said Punja.

He said the group had seen a very healthy growth in exports of biscuits and other products which stood at the $50 million mark this year and were expected to grow to $60 million in the coming year.

Punja said as operations were stabilised in the past few months and products and activities rationalised, improvements had flown through from these decisions and the company and its subsidiaries had recorded a reasonable profit in each of the first three months of the new financial year “and we expect this to continue for the rest of the year”.

For the 2009 financial year ending in June, another FM subsidiary, the Atlantic and Pacific Packaging Company Ltd’s profit after tax increased from $237,858 to $560,956 while turnover increased from $5.788 million to a record $7.108 million

October 16, 2009

Fiji Slips in Business Access to 54th in the World

Reforms to lift Fiji business ranking

www.fijilive.com - October 05, 2009

Fiji’s status as one of the easiest countries in the Pacific in which to do business just got knocked back in the latest annual ranking released by the World Bank.

The World Bank’s Doing Business 2010, which tracks business reforms in more than 180 countries and then ranks these countries on how easy it is to do business in them, sees Fiji slipping to 54th place, out of 183 countries across the world.

This is a drop from its 43rd place ranking in the World Bank’s Doing Business 2009.

This however does not downplay the reforms that have been instituted in Fiji, with the World Bank saying Pacific economies, including Fiji, continued to pick up on their pace of reforms.

“The reason for Fiji's slip in this year's ranking is due to changes in the corporate income tax rate. Fiji cut its corporate income tax rate from 31 percent to 29 percent. But the compliance time for taxes increased because of a requirement to prepare two pay as you earn (PAYE) employee certificates and PAYE annual summaries instead of the usual one,” Sara King, Communications Assistant at the World Bank’s Sydney office told Fiji Live.

“In addition, a road use levy has been imposed on all vehicles. These changes occurred in an environment whereby other Pacific nations were reforming, which also contributed to Fiji's slip.”

Fiji’s top place ranking compared to other countries in the Pacific was overtaken by Tonga, who came in at 52nd place in this latest ranking, while star Pacific economy Samoa improved its ranking from 68 in 2009 to 57th place, although still behind Fiji.

The World Bank said despite the difficult business environment globally, where governments around the world faced challenging financial issues, many governments still implemented regulatory reforms, making it easier to do business in the 2008/2009 year than in any year since 2004, when Doing Business started.

“Reformers focused on making it easier to start and operate a business, strengthening property rights and improving the efficiency of commercial dispute resolution and bankruptcy procedures,” the World Bank said.

Resort investors push for $1 million owed

www.fijilive.com-October 14, 2009

Investors in a Fiji resort are pushing to get more than $1 million they are owed.

The New Zealand Herald reports Grant Watson, head of a new group of investors in the Fiji Beach Resort & Spa managed by Hilton, said a priority was to get finances flowing again.

The Villa Owners' Group met last week and wanted to recoup money owed from late last year and most of this year, Watson said this week.

Fiji's Hilton continues to operate although investors who own beachfront apartments at the Denarau Island resort are out of pocket.

A group of 141 New Zealanders, 52 Australians, 16 Americans, 30 people living in Fiji, one from Dubai and one from Canada poured millions into the resort developed by Neville Mahon of Greenlane.

Last month, both the development company and the business which paid investors went into receivership and KordaMentha was appointed.

Regular income payments and the benefit of a free 10-weeks-a-year stay in studios or villas were some of the benefits which investors had expected. The beachfront resort opened in 2006 and is continuing to operate successfully, despite problems behind the scenes.

Watson said the group had been working closely with KordaMentha receiver Grant Graham and representatives had also had "one brief meeting" with Mahon.

Priorities were to recoup more than $1 million owed from rental of their villas and studios from the last quarter of last year throughout this year.

Crisis impacts tourism, remittances: Reddy

www.fijilive.com-October 15, 2009

Fiji is beginning to feel the impact of the global financial crisis through a drop in earnings from tourism, remittances and the resource sectors, says economist Dr Mahendra Reddy, the dean of the Faculty of Commerce, Hospitality and Tourism Studies at the Fiji Institute of Technology.

In a paper titled “Understanding Financial Crisis: Some Implications on Remittances, Tourism and Resource Sectors”, Reddy said while Fiji had put in place policy responses to the global financial crisis, it is yet to be “out of the woods.”

“The global recession reduces demand for exports of goods and services. The fall in export and tourism earnings and in worker remittances also reduce private sector incomes and, therefore, demand for private consumption and residential housing. Also, business investment demand will be adversely affected by greater uncertainty about the prospects for the domestic and global economy and possibly also by a tightening of access to foreign capital,” Reddy said.

“Fiji’s tourism sector was already well below its past maximum performance due to political problems at home and the resulting negative publicity in the source countries, in particular Australia and New Zealand. However, while the sector started to get back on the growth track, the declining incomes in developed and emerging countries, where most tourist flows originate has dampened the rate of growth in tourism numbers.”

He said remittances, which have become a major source of external financing for Fiji, have been adversely affected by the slowdown in developed countries.

“The total volume of remittances to Fiji stood at F$310.9m in 2005 which further increased to F$322.3m in 2006. However, following 2006, it declined to F$256.4m in 2007 and further declined to F$188.0m in 2008. The decline in the volume of remittances has a direct negative impact on the well-being of households since such transfers - unlike other types of transfers - are directly used to cover primary needs such as food, education and healthcare,” Reddy said.

As a policy response, he said, Fiji has had to devalue its dollar, but rather than this being a competitive response, it was more a response to the dwindling level of international reserves and falling liquidity levels and has allowed it to buy time.

“While Fiji seems to be safe now, it is yet to be out of the woods - we need to examine government ability to repay some very large bonds which will be maturing in the next few years. That will be the crunch time.”

In the meantime, fiscal discipline along with prudent monetary policy tool use must be exercised,” Reddy said.

Fiji land reforms wait on global funding

www.fijilive.com- October 14, 2009

Fiji’s Prime Minister is hoping the World Bank and the International Monetary Fund will finance his Government’s land reform to be implemented early 2010.

The land reform agenda is part of a set of reforms Commodore Voreqe Bainimarama said were designed to help Fiji achieve its true potential.

Bainimarama returned last week from the annual meetings of the IMF and World Bank in Istanbul.

Following that meeting, representatives of the World Bank and IMF are expected to visit Fiji early next month to get a better sense of the situation here before a decision on its loan to Fiji is made.

Bainimarama said the Reserve Bank of Fiji and Finance Ministry will work with the visiting party.

In July this year, Bainimarama announced his roadmap to returning Fiji to democratic elections in 2014, conditional to the implementation of certain reforms.

He said that the land reform is planned to salvage Fiji's struggling sugar industry and will open up more tourism opportunities.

He encouraged native land owners to put their land up for productive use.

He assured that Fiji’s land ownership system will remain as it is, quelling fears that sparked the insurrections of 1987 and 2000 led by indigenous Fijian extremists.

“We cannot realise our potential in agriculture, improve the living conditions of the taukei(indigenous Fijians), if land is not made available on a long term, sustainable basis,” Bainimarama said.

He said his government will ensure that taukei landowners get an attractive return when they give out their land for lease.

Fiji’s Ministry of Agriculture has also been urging native land owners to make their lands available for investment and assist Government’s efforts in getting the country out of the economic doldrums.

Agriculture Minister Joketani Cokanasiga said potential investors want assurance that their investment will be secure which means long term tenure for land leases.

“I am all for releasing more land for economic development,” he said.

“We have just noticed that 30 years isn’t enough for big investors to come in and get their returns, we are now looking at increasing to between 60 to 99 years leases.

“Mahogany requires 30 years, teak requires about 15 years to get a full crop and maybe from there on two or three harvests for investors to get a full return on their investment.”

His ministry has been working with the Ministry of Indigenous Affairs in getting land ready for investment.

“Opening up new land which is unused has been one of the key areas we have been working on, particularly in the east coast of Natewa, various areas in Ba and Nadi,” Cokanasiga said.

Meanwhile, the Wall Street Journal reports that the World Bank has just signed agreements to lend $4.2 billion (Rs19,572 crore) to fund infrastructure projects and strengthen banks in India as the government steps up investment to boost economic growth.

The agreements for three loans to the Union government, India Infrastructure Finance Co. Ltd (IIFCL) and Power Grid Corp. of India Ltd were signed on Tuesday.

October 11, 2009

Cane production down

Cane production down 200,000 tonnes

www.fijitimes.com - Saturday, October 10, 2009

CANE production dropped by 200,000 tonnes from 2.5 million tonnes in 2007, the Fiji Sugar Corporation reported.

The company's 2009 report said total sugar produced also dropped to 207,966 tonnes from the 237,418 tonnes recorded last year.

Chairman Gautam Ramswarip said the significant increase in burnt cane was of concern as burning during the season increased to 50 per cent from the 33 per cent recorded the previous year. He said the inconsistent supply of quality cane was another worrying factor.

Mr Ramswarup said FSC was in the process of investigating a number of initiatives and programs to streamline harvesting and transportation operations

Chief executive officer Deo Saran said this year's cane was from an area of 50,907 hectares and average yield per hectare had also dropped by 3.4 per cent.

He said at the end of the season about 35,000 tonnes remained un harvested, mainly due to lack of harvesting efforts by growers and above average rainfall towards the end of the season

October 9, 2009

FIJI'S Financial Intelligence Unit Plans Network

FIU plans network

www.fijitimes.com - Thursday, October 08, 2009

FIJI'S Financial Intelligence Unit has its sights set on four more domestic agencies to add to its network of intelligence sharing.

Unit director Razim Buksh confirmed this yesterday following the signing of a memorandum of agreement with the Lands Transport Authority on Monday that will facilitate timely exchanges and sharing of intelligence and information.

Mr Buksh said the FIU had identified a licensing authority, a regulatory authority, a law enforcement agency and a semi-government agency.

He said the FIU would continue to explore other agencies that could contribute to its effort of cracking down on criminal offenders.

"We have plans to expand our network to include domestic agencies and work together with foreign FIUs," Mr Buksh said.

The LTA joins the Department of Immigration, Fiji Islands Revenue and Customs Authority, Fiji Police, the Fiji Islands Trade and Investment Bureau and the Ministry of Justice in FIU's existing network.

Mr Buksh said the addition of the LTA would greatly improve the intelligence that the FIU developed. He added the MOA would allow the FIU to conduct "more comprehensive profiling of individuals or parties under investigation for serious crimes".

He emphasised the importance of building a strong inter-agency co-ordination as the key to combating today's ever-changing "criminal environment".

"What ever information we can get from the database of the LTA for instance, will benefit us in our profiling."

LTA chief executive Etuate Koroi said the signing of the MOA would assist LTA crack down traffic offenders.

Mr Koroi said with the assistance of the FIU and other government agencies, the authority would make sure traffic offenders did not evade the law.

Calls to Restructure Fiji education

Restructure education

www.fijitimes.com - Wednesday, October 07, 2009

THERE is a need for education to be restructured on a need basis, says a Fiji Institute of Technology academic.

The head of department for Management Dr Kunneth Ramakrishnan said education was not just about acquiring a degree.

"The level of education for those who have the opportunity to be educated is quite good compared to developing countries in Asia," he said.

"The problem is many of the people who want to be educated can't get that facility because of financial problems, poverty and other things.

"I feel that education can be restructured to be on a need base and not just giving a degree.

"I think all institutions particularly FIT, which will be the National University of Fiji have a serious role to rethink and restructure education."

Dr Ramakrishnan, who is from India, and has taught in universities in Sri Lanka, India and Fiji, said he had a lot to contribute to the institute and Fiji's work force.

"Employers look for people who are useful to them from day one they don't want to be trainers.

"Our job is train people to be useful to the employers so the employee need is the prime consideration in our management education.

"I have a responsibility now to play a useful role at FIT since I have been appointed the HOD for management.

"We wanted to introduce a number of short courses for different categories of people at different levels in the industries.

"Short courses mean one or two days, which is useful to them in their day to day functioning so there has been positive response from the industries."

Fiji taps into sports tourism niche

Fiji taps into sports tourism niche

www.fijilive.com

This niche is sports tourism.

As Fiji's tourism industry targets $1billion in revenue from tourism by 2007 another niche in the industry has opened up and promises to be the mother load in as far as the industry is concerned.

This niche is sports tourism.

And there is no other way to illustrate this vividly then the hosting by Fiji of the Table Tennis World Junior Circuit (WJC) from next Saturday (June 25) to July 2.

The Fiji Table Tennis Association won the bid to host the tournament and reports say this year's event promises to be the best ever.

What worked in FTTA's favour was that it successfully hosted the 2003 South Pacific Games and 2002 Oceania Table Tennis Championships.

The tournament in the Fiji capital, Suva, will draw participants from China, Japan, Korea, India, Hong Kong, Brazil, Australia, New Zealand,Fiji, Tahiti, Vanuatu, New Caledonia , Kiribati, Cook Islands, Tuvalu and well officials from those countries as well as Spain ,Poland and Sweden.

Major tourist destinations such as the Warwick International, Shangri-Las Outrigger on the Lagoon, Sheraton Fiji, Beachcomber Island Resort and Malolo Island Resort have put together special one-off pre-event and post-event packages for the players, families and friends to enjoy while they are here while a number of the hotels ,motels and apartments in Suva are being booked out for around 10 days with more than 200 players and officials arriving from overseas.

This does not include families and supporters who coming for "a smashing experience", which is the official slogan for the event.

"The spin-off for the economy, especially around Suva, will be substantial," says Anthony Ho of the FTTA.

The organisers have also secured the services of Jarek Kolodziejczyk, a top table tennis coach from Poland, together with world famous professional player, Peter Karlsson of Sweden to conduct a three-day training camp before the tournament starts.

Many teams are reportedly flying in earlier than scheduled to take advantage of this offer.

After the championship, teams have been invited to stay one more day for the "Fun Day at the Beach" programme organised by the Fiji Visitors Bureau.

According to FTTA some participants making use of the post event packages "will linger on Fiji's azure waters and white sandy beaches".

And what are the benefits for Fiji or more importantly Suva, which will host the event.

It will:

- generate economic activity for hotels, restaurants, attractions, retail and service businesses;

- indirectly lead to years of follow-on tourism;

- create new revenue streams and resources for local event organisers and sports-friendly businesses;

- promote Suva's tourism development;

- improve media exposure and enhance Suva's image to potential visitors;

- maximise the use...

Fiji's ‘Bula Spirit

A fresh wave of the ‘Bula Spirit’

www.fijilive.com

Staff at a Fiji island resort serenade and greet guests as they come ashore.

The ‘Bula Spirit’ is a smart catch phrase developed by Fiji’s tourism players to describe the sentiment that endears Fiji to the visitor.

The word ‘bula’ is essentially a greeting in the native Fijian language to mean ‘hello’. But to the people of this country, it means a whole lot more than just a greeting. It conveys with it that sense of warmth, affection and community, caring spirit that makes Fiji what it is … a mix of diverse cultures intermingling in ways that are special, and, perhaps even rare.

It couldn’t have been a smarter idea than for Fiji’s tourism leaders to launch the ‘Bula Spirit’ two years ago, as a theme that would convey to the country’s tourism workers how visitors to Fiji should remember the country.

A description of the theme at its launching read: “A commitment to make that extra effort to ensure that the visitor enjoys the very best in hospitality , warm thoughtful service and the kindness that has made Fiji special among destinations in the world”.

“The ‘Bula spirit’ is traditionally one of Fiji’s most endearing qualities,” Tourism Fiji CEO, Josefa Tuamoto says.

Which is why, following on from the national launch in Fiji in 2007, Tourism Fiji recently carried out a television campaign in New Zealand to re-connect New Zealanders with the Fijian people and their uniquely famous ‘Bula spirit’.

And during a visit to Auckland, New Zealand at the end of June, Tuamoto took the opportunity to launch the national tourist office’s newest trade DVD which has footage based on Tourism Fiji’s recent TV campaign in Kiwi land.

“The ‘Bula spirit’ … is what sets us apart from the rest of the world and is one of the main reasons why Kiwis have traveled to the destination for more than 40 years,” he says.

Tuamoto also thanked key members of the New Zealand travel industry for their ongoing efforts in helping to promote Fiji as a destination.

“Our Kiwi numbers are coming back and we are confident that with the continued efforts of our New Zealand industry colleagues, particularly the airlines and wholesalers, we will reach our target of 120,000 Kiwi visitors within the next two years.”

October 1, 2009

Where to Now for Fiji Sugar?

Where to for sugar?
By Patricia Garcia-Duran, Elisa Casanova and Montserrat Millet,

Wednesday, September 30, 2009

www.fijitimes.com

ON September 30, 2009, the Sugar Protocol will officially expire. Following a six-year transition period, the Protocol -- which provides a group of ACP countries with guaranteed access to the EU market for fixed quantities of sugar at preferential prices -- will be replaced by a non-reciprocal duty and quota-free preferential trade system on October 1, 2015.
This article examines these changes to the EU-ACP sugar trade regime.
The Sugar Protocol
The Sugar Protocol has been a feature of EU policy to ACP countries since 1975.
The Protocol, which was attached to the first LomÚ Convention, granted non-reciprocal, preferential conditions regarding sugar exports to a group of ACP countries.
These conditions were retained in the later LomÚ Conventions and the Cotonou Agreement.
Under the Protocol, only 19 of the 77 countries which comprise the ACP group were to benefit from these privileged trade relations.
Eleven were from Africa, seven from the Caribbean region, and only one (Fiji) is located in the Pacific.
Of these countries, six are Least Developed Countries (LDCs) and 13 non-LDCs. These countries have had quota-based access to the EU market.
Under the Protocol, the European Community undertook to import, duty-free, specific quantities of cane sugar (raw or white) from these countries, which in turn undertook to deliver it.
The tariff quota has always been around 1,279,700 million tonnes (mt) per campaign.
Since 1995, other additional quantities of sugar have been allowed into the EU under preferential conditions in amounts which vary in each campaign, depending on the "basic supply needs" of European refineries; on average, they have amounted to 300,000 mt per campaign.
Last, but not least, the Protocol has also offered producer countries a guaranteed price.
The quota of the 19 ACP countries can only be purchased at a price negotiated for each campaign that is close to the internal intervention price set by the Common Market for Sugar.
The transition period
Provisions have been made to allow for a gradual adaptation to the new reality from October 2009 to October 2015.
During this period, three major changes will be introduced: guaranteed prices will decrease and finally disappear, quotas will be increased, and the number of ACP countries which can benefit from preferential relations with the EU for sugar will tripple.
After 30 September 2009, the EU will offer preferential non-reciprocal treatment to sugar originating from any ACP country that has signed or initialled an Economic Partnership Agreement (EPA) with the Community and, as a result of the 'Everything But Arms' (EBA) initiative, from any country of the world recognised as an LDC by the United Nations.
Taking into account the number of ACP countries involved, the EPA regime will apply to almost half the ACP countries (36), and the EBA regime to 31.
All 19 ACP beneficiaries of the Sugar Protocol will come either under the EPA (17) or the EBA regime (2).
The only ACP countries excluded from the preferential regime will be the 10 non-LDCs that have neither signed nor initialled an EPA with the EU.
In both the EPA and EBA initiatives, the provisions regarding sugar during the transition period are the same.
Guaranteed prices will be reduced but maintained until September 2012 and limits on imports will apply until October 2015.
Regarding the guaranteed prices, imports of sugar from the ACP countries concerned will be subject to a minimum price between 1 October 2009 and 30 September 2012.
This price shall be no lower than 90 percent of the EU reference price for the marketing year in question. After September 2012, prices shall be determined by the market.
As the EU reference price for sugar is being reduced as the result of the 2006 reform, the guaranteed price for ACP raw sugar has already been reduced by at least 33 per cent during 2008 and 2009.
Quotas will be maintained until 2015 but in an indirect way and, in principle, only for EPA non-LDCs imports.
Country-specific quotas and immunity from safeguard measures will no longer apply.
During the period between October 1, 2009, and September 30, 2015, there will be no country or EPA quotas.
Access will be duty free within automatic safeguard ceilings.
The EC may impose the applied Most Favoured Nation duty on products originating in EPA non-LDCs, of tariff heading 1701 sugar, if they are imported in excess of two volume-safeguards at the same time.
The first ceiling is based on ACP non-LDC imports: 1.38 tonnes in 2009/10; 1.45 tonnes in 2010/11; and 1.6 tonnes in the following four marketing years.
The second ceiling concerns the sugar imports from the whole ACP group: 3.5 tonnes in a marketing year. If both ceilings are exceeded in the same marketing year, the EU may decide to impose duties on EPA non-LDC imports.
LDC imports do not necessarily need to be subject to the same treatment.
It is important to emphasise that although the second ceiling takes into account all ACP imports -- that is, imports from both EPA and non-EPA ACP LDCs and non-LDCs -- EPA and EBA LDCs imports will only be subject to a regular safeguard clause.
After the transition
As of 1 October 2015, sugar from EPA and EBA countries will have non-reciprocal duty and quota-free access to the EU market.
In principle, both regimes will be compatible with WTO rules: The EBA regime on the grounds of the so-called World Trade Organization's "Enabling Clause", and the EPA regime on the grounds of Article XXIV of the GATT.
After the transition period, the only remaining language regarding sugar will be a safeguard clause.
Under the EPA regime, this clause will no longer be defined on the grounds of the volume of imports but rather on the sugar price.
In other words, there is a move away from a preferential system based on quantitative limits, as seen in the Sugar Protocol or the transition regime, to a system of control based on price.
Both EPA LDCs and non-LDCs will be subject to the same safeguard mechanism: The EU will be able to impose duties "in situations where the European Community market price of white sugar falls during two consecutive months below 80 per cent of the European Community market price for white sugar prevailing during the previous marketing year." As for non-EPA LDCs, the present General System of Preferences (and thus EBA) Regulation does not provide for any specification of the general safeguard clause.
Nonetheless, as the Regulation covers the period from 1 January 2009 to 31 December 2011, it would not be surprising if the EPA safeguard specification were to be included in the EBA regime in the near future.
Conclusion
Sugar Protocol legally expires in October 2009 but some of its benefits will continue until 2015 through the EPA and EBA regimes.
These benefits will no longer be limited to the 19 beneficiaries of the Sugar Protocol: under the EPA regime they will be offered to all 36 countries that have signed or initialled an EPA, and under the EBA regime, they will be offered to 31 ACP LDCs (as well as to 9 LDCs that are not ACP countries).
At the end of the day, sugar originating in 67 ACP countries, rather than 19, will benefit from preferential access to the EU market.
As of 1 October 2015, the only restriction on their sugar access to the EU market will be a price-based safeguard clause.
From October 2009 until October 2015, the access for LDCs will, in principle, be freer than for EPA non-LDCs.

August 4, 2009

Fares to Go Up

Fares go up
By ASHWINI PRASAD

www.fijitimes.com - Tuesday, August 04, 2009

COMMUTERS will have to dig deeper to meet transportation costs from tomorrow. Yesterday the Transport Ministry announced bus fares would increase by an overall average of 13 per cent, with taxi flagfalls and waiting rates to also increase. This follows a decision to cut back on the number of fare stages across the country by, in most cases, merging fare stages. The changes will result in an increase in some areas by up to 25 per cent. For example, fares in Suva and Lautoka will now cost either 70 cents or $1 for adults, with school bus fares at 50 per cent of the new adult fare. This follows the merging of the Suva and Lautoka stages 1 and 2 50 cents and 70 cents into a single stage. That single stage (the new Stage 1) will cost 70 cents from tomorrow. The current Suva and Lautoka City Stage 3 (75 cents) will from tomorrow be called Stage 2 and cost $1.

In other parts of Viti Levu, adult fares for stages 1 and 2, previously 50 cents and 70 cents, will now be counted as a single stage Stage 1 attracting a fare of 70cents. The current Viti Levu stages 3 and 4 (85 cents and $1.05) will be merged into a new Stage 2, attracting a charge of $1.15. The bus fare changes continue merging in this manner right through to the current Viti Levu Stage 79 $16.90 which from tomorrow will become Stage 40, attracting a fare rate of $17.75. For Vanua Levu the current 64 fare stages have been merged into 32 stages. Taxi fares will also rise, with the industry granted an increase in the flagfall of 50 cents, while the waiting rate will be 10 cents per minute. The Transport Ministry said the increases were the result of the devaluation and increases in fuel prices.

Fiji Bus Operators Association president Zain Dean welcomed the increase but refused to comment any further on the matter. Attempts to contact Fiji Taxi Union general Secretary Rishi Ram remained unsuccessful last night.

Electricity Users to Pay More

Consumers to pay more for electricity bills over $50
www.fijitimes.com - Tuesday, August 04, 2009

ALL electricity consumers whose bills are higher than $50 will have to pay 15 per cent more come September 1. This after the Fiji Electricity Authority was given the green light yesterday to increase its tariff by an average of 3.2 cents per unit (a 15 per cent increase) on September 1.
The increase will go across the board for all customer categories, except those considered "Life-line" domestic customers - whose monthly bills are less than $50 - and some institutions such as religious bodies, schools, council street lights and other non-profit organisations. A statement released by the Information Ministry said around 90 per cent of FEA's domestic customers fell into the "Less than $50/month" category, which means they would see no increase.

But it says for someone whose current consumption is around $60/month, the tariff increase would see their bill increase by $9 a month. This would mean that the 15 per cent increase in tariff is charged over the entire bill, not just the amounts over $50. "For a bill of $80/month - an increase of $12/month, for a bill of $100/month - an increase of $15/month," the statement said. The Transport Ministry justified the tariff increase, saying it was necessary because of the adverse financial impacts of devaluation of the Fiji dollar on April 15 this year, as well as the Commerce Commission's decision to remove the FEA fuel surcharge rate from March 11.

The increasing price of diesel and a possible El Nino later in the year were also contributing factors to this increase, the Transport Ministry said. It said the 15 per cent increase in the tariff rate would see the FEA gain additional revenue of about $2million per month. "This will help to improve FEA's cash flow as well as its financial covenants in its offshore loan agreements." The Transport Ministry said increases in customers' power bills could be mitigated if they reduced their consumption levels by using energy efficient fittings, changing electricity consumption habits and being energy-efficient. It said "the tariff increase was modelled as part of the Corporate Planning by FEA for 2009 to 2011".

Opportunities in Pacific - EC DG

Crisis offers region opportunities: EC regional director-general
www.fijitimes.com - Tuesday, August 04, 2009

"A SERIOUS crisis should never be allowed to go to waste... they hold real opportunities to refocus priorities, to make quantum leaps in terms of regional integration, to invest more and better, to stimulate economies, to achieve green growth and to redesign the international economic, financial and environmental architecture." This was the view of the European Commission's Director-General for Development and Relations with African, Caribbean and Pacific States, Stefano Manservisi.

He made the comment at yesterday's Lowy Institute conference on the impact of the global economic crisis on the Pacific Islands region in Brisbane. The conference was a lead-up to the Pacific Island Forum, which opened in Cairns, Australia today. "The global economic crisis shows how deeply the prosperity and the future of advanced economies and developing countries are linked through globalisation and that a global system of rules was needed for equitable sharing of benefits and costs," he said. Mr Manservisi stressed that advanced countries must create the conditions for a more inclusive and regulated globalisation, and to fight poverty and exclusion as a necessary element of a sustainable global recovery.

Mr Manservisi said participation of poor countries must be promoted in global forums such as the G20 where economic and political decisions were taken. "But," he said. "developing countries also needed to take measures to mobilise their domestic resources and stimulate private sector activities and growth". A statement released after his speech said the EU, that is the Commission and the Member States, remained a strong supporter of Pacific regional integration, being the second largest donor of aid in the Pacific region with $449.55m ($US227.7m) in 2007.

It said last year the Commission alone tripled its financial support for regional cooperation in the Pacific. The EC was also adminsitering a new financial instrument, dubbed the EU Vulnerability FLEX to assist ACP countries to the tune of $1423.8m (500m Euro) by 2010. "The EU also stands ready to support social safety nets and to promote investments in coordination with other donor countries in the region such as Australia and New Zealand", he said. The statement said the EU was interested in joining the Pacific Regional Infrastructure Facility that Australia, New Zealand, the World Bank and the Asian Development Bank launched at last year's Pacific Forum.

July 30, 2009

Fiji not immune to global crisis

Fiji not immune to global crisis
http://www.fijitimes.com/

By Geraldine Panapasa, Thursday, July 30, 2009

THE Pacific, including Fiji, is not immune to the impact of the global economic crisis, says Aus-tralian High Commissioner James Batley. Mr Batley was chief guest at the Fiji Economy Update 2009 presentation at the University of the South Pacific yesterday. The presentation was a co-orperation between the USP's School of Economics, Faculty of Business and Economics, the Crawford School of Economics and government and the Australian National University. "The update is taking place a week ahead of the Pacific Island leaders meeting in Cairns, Australia, and the global economic crisis is likely to be the key issue for discussion," Mr Batley said. "One of the significant issues that leaders will discuss is whether to start negotiation on a new regional trade and economic integration agreement, known as PACER Plus." Mr Batley said trading relationship between Fiji and Australia continued to be a strong one, reflecting the strong link between the two countries. He said Fiji continued to benefit from privileged access to the Australian market under international agreements and arrangements. "Australia has a keen interest in the update as a neighbour who wants to see Fiji fulfill its economic potential." he said.
Mr Batley said the University should continue fulfilling its traditional role of providing space for the free and respectful exchange of ideas and opinions. The Fiji Economic Update 2009 was held at USP Lower Laucala Campus yesterday. Presentations will also be held in Labasa at Hotel Northpole tomorrow.

More poverty around
Thursday, July 30, 2009

THE unemployment rate has been hovering above the 8 per cent mark since 2000, says an academic. The changing of the retirement age from 60 to 55 will increase the number of vacancies. The associate professor of economics at the University of Queensland, Renuka Mahadevan, made the comment while presenting her survey at the 2009 Fiji Economy Update yesterday.

"Along with other factors, increasing unemployment is a likely underlying factor for the consistent decline in Fiji's ranking on the UNDP's human development index," she said. "The index, however, understates the real situation as it excludes gender discrimination, income inequality and more-difficult-to-measure indicators such as respect for human rights and political freedom which have taken a nosedive." She said poverty has worsened three-fold.

Most fuel for energy
www.fijitimes.com

By Geraldine Panapasa, Thursday, July 30, 2009

FIJI'S energy sector relies heavily on imported fossil fuel for industrial, domestic, transport and power generation needs, says associate professor of physics Anirudh Singh at the University of the South Pacific. Speaking at the Fiji Economy update 2009 presentation, Mr Singh said a significant part of imported fuel was directed to electrical power generation. "The commercial sector was the heaviest user of electricity accounting for 43 per cent of generated electricity in 2007," he said. "By far, the greatest consumer of imported fuel is industrial distillate using 45.6 per cent of the 808 million litres imported in 2007. "The aviation industry is the next biggest consumer, using 35.5 per cent of the total. "It is followed by road transportation which takes up 17.1 per cent of total fuel imports." Mr Singh said a significant fraction of total energy demand in Fiji was met by biomass energy. He said coconut oil and biofuel derived from it could be used as alternatives to diesel. While the country's non-fossil fuel generation capacity has remained fixed, total energy demand has risen steadily and rising imported fossil fuel costs have placed pressure on Fiji's imports bill. "The best approach to contain or reverse this is to introduce more indigenous sources of energy into the electricity generation system with the obvious one being renewable energy," Mr Singh said. He said reductions in fuel imports will result when the land transport sector begins to switch to bio fuels.

Fiji Tourism Collapse Not Good

Tourism collapse not good
www.fijitimes.com - Thursday, July 30, 2009

A COLLAPSE in the tourism or sugar sector will have a negative flow-on effect on the economy, says University of Queensland associate professor of economics Renuka Mahadevan. She made the comment in her assessment of the Fiji economy at the 2009 Fiji Economy Update presentation yesterday. She said there was a need for diversification into other crops apart from sugar as non-agricultural production contributed to six per cent of Gross Domestic Product. "The huge potential in this area remains unexploited. About 50 per cent of the people are rural farmers," Ms Mahadevan said. "Creation of employment opportunities is necessary to lift them out of poverty. Local production is insufficient and cannot be depended on to meet the high standards required by the tourism sector which imports food because of the poor quality and lack of continuity in supply." Australian High Commissioner James Batley said Australia was serious about providing direct support for Fiji's export-related sectors. He said the assistance was consistent with Australia's long history of assistance to Fiji. "We also maintain significant programs of assistance in the education and health sectors as well as working on community sector development," Mr Batley said. He said Fiji was benefiting from an Australian pilot program, the Enterprise Challenge Fund, which provides grants to business projects to improve.
livelihoods, incomes and access to vital goods and services for local communities.

Housing affordability in Fiji

Housing affordability
http://www.fijitimes.com/ - Reports by GERALDINE PANAPASA

Thursday, July 30, 2009

A squatter settlement at Muanivatu outside Suva

RURAL-urban migration, low wages, expired land lease and financial demands are some factors that contribute to the housing crisis in Fiji, says Father Kevin Barr. In his report presented at the 2009 Fiji Economy Updates on housing affordability on Tuesday, Fr Barr said these factors led to the growth in squatter settlements in the country.

"About 15 per cent of Fiji's population live in overcrowded, sub-standard and unhygienic housing in more than 200 squatter settlements," Fr Barr said. "There is inequality and the percentage of those in poverty has grown drastically. Quality of life for the ordinary people has not improved and we have seen the development of the very large Fiji of the poor and struggling and the small Fiji of the rich." Fr Barr said subsidy for housing was not a large commitment by the government particularly when it acknowledged that housing was a human right. "Those responsible for housing the nation's population must think in terms of availability and affordability," Fr Barr said. "It is not just a matter of acquiring land, developing lots and building houses. The lots and houses must be affordable for the people. "Any national housing scheme must take into account the income level of the people to determine what is affordable for those in the particular income levels." Fr Barr said housing agencies need to be able to deliver houses at a level of affordability.
He said when majority of the population earned low income, housing must be provided so that they can afford it.

Professor Wadan Narsey said in his analysis of poverty in Fiji that low income earners in 2002 and 2003 spent about 60 per cent of their pay on food. "The price of basic food is increasing, which leaves little with which to pay rent or pay off a housing loan," Fr Barr said. He said about 25,000 poor people were receiving family assistance which came to a minimum of $60 a month or maximum of $120 a month.

Reassess Housing Authority, PRB role: Barr
www.fijilive.com - July 30, 2009

Fiji Wage Council chairman and poverty advocate Father Kevin Barr has called on government to re-look the roles played by Housing Authority and the Public Rental Board as there was “a very real danger” that their commercialization would go against their intended role to provide housing for the poor. Barr said allowing the two state companies to operate along commercial lines and charging market rates and market rents may make good economic sense but if a high percentage of the population could not afford to pay these rates, there was a serious need to question how they would be provided with affordable homes. “In 1997 when, on the advice from the World Bank, the HA and PRB were separated, the World Bank advisor who came to Fiji said that the PRB must charge economic rents for its rental units. This meant that rents for those living in the Four Storey flats at Raiwaqa would pay $58 a month instead of $12 a month. Someone asked: ‘What happens to those who cannot afford to pay the increased rent?’ The reply was: ‘Just flush them out.’ Many were horrified that this unfeeling, economic/commercial attitude should dominate the man’s thinking. He didn’t seem to be concerned where people went if they couldn’t pay. He didn’t think of the social consequences. His attitudes were dominated by principles such as ‘user pays’ and the theories of ‘economic rationalism’ and ‘free market economics,’” Barr said.“If HA and PRB are to be relevant in today’s world, they need to do careful research to find out what ‘low income’ really means so that their products can be affordable to this group. “With such a high level of poverty in the country, over 35 percent, and such a large number of full time workers receiving wages below the poverty line (between 55 and 60 percent) and 71 percent of workers earning incomes below $15,000, serious reassessment of the demands placed on HA and PRB is needed,” Barr added. Among the many ways that housing could be made affordable to the poor, Barr suggested the provision of government subsidies as well as getting the poor to participate in schemes to build houses, thereby reducing costs.

July 6, 2009

FHL Investigated

Sidelined chair backs FHL probe
By ASHWINI PRASADMonday

www.fijitimes.com - July 06, 2009

THE Fijian Holdings Limited board should carry on with its investigations, says Chairman Isoa Kaloumaira. Mr Kaloumaira who was sent on leave said he would let the board do its investigations and stand by the statement made by the board last Friday. He did not wish to further comment on the matter. Last week in a statement to the South Pacific Stock Exchange acting chairman Ioane Naiveli had said FHL CEO Sereana Qoro, chairman Isoa Kaloumaira and deputy chairman Lieutenant Colonel Mohammed Aziz were sent on leave to allow "corporate governance" investigations. Mr Naiveli said this was the request of the FHL board, adding it was business as usual for the group's companies. Mariana Saumadu is acting CEO. Efforts to contact Lt Col Aziz or Mrs Qoro yesterday were futile. FHL is in the midst of settling its acquisition of BP Southwest Pacific Limited at a cost of $190million. A deposit of $20m was paid out last year. Two months ago, the company sold its interests in the Fosters Group for $40m. It is still searching for capital to complete the purchase of the oil company's operations in Fiji

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