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Thursday, May 31, 2007

Toyota Tsusho makes a profit

Toyota Tsusho (South Sea) Limited, a company listed on the South Pacific Stock Exchange in Suva, Fiji, has made a net profit after tax of F$2.8 million for the period ending 31 March 2007. Of the F$2.8 million, F$1.6 million was contributed by the company's Fiji operations.

The result was lower than that recorded in the same period in 2006.

The company has attributed its lower results to lower new vehicle sales due to the current economic conditions. Its rental car business, run as Avis, also produced lower results due to the downturn in tourism.

Toyota Tsusho trades as Asco Motors in Fiji and has branches in Fiji, Tonga, Samoa and American Samoa.

Toyota Tsusho's share price as at 30 May 2007 was F$2.06.

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Wednesday, May 30, 2007

Fiji Economic Outlook

Read comments on the economy by the Interim Minister for Commerce and Investment in a copy of a Fiji Times articles below.

"Waradi worries for economy, Wednesday, May 30, 2007

The projected contraction in the economy is expected to worsen if key industries including tourism don't kickstart soon, says interim Commerce Minister Taito Waradi.

He said the decline would continue if tourism earnings did not pick up, if the gold mine in Vatukoula didn't restart immediately and if exports didn't increase over rising imports.

Mr Waradi was commenting on the request by the tourism industry for extra marketing funds from the Government.

The Finance Ministry has reserved comments on the industry's request for $3.8million to revamp its marketing strategies.

Interim Finance Minister Mahendra Chaudhry said he would comment once he received the submission from the Fiji Visitors Bureau.

On the state of the economy highlighted by tourism stakeholders last week, Mr Chaudhry said the economy had been contracting since 2006.

The industry has asked for an extra $3.8million to help in its recovery efforts following the decline since the December military takeover.

FVB chief executive officer Viliame Gavoka said the submission of $3.8million was made a few days ago. Figures released by the Fiji Islands Hotel and Tourism for the first quarter of this year showed cumulative hours lost by employees were 702,000.

Association president Dixon Seeto said this amounted to about $2.8million in wage loss and $0.5million lost towards Fiji National Provident Fund contributions.

University of the South Pacific economist Professor Biman Prasad warned the contraction of the economy would continue especially with the lack of recovery in the tourism industry.

Mr Waradi said given the central role of investment in growing the economy, Cabinet last week formed a high-powered sub-committee to address and remove whatever was preventing more than $6million worth of investments from being implemented.

More than $1million of this was offshore funding which could immediately boost our fast depleting foreign reserves, Mr Waradi said.

He said the interim Government intended to find other sources of funding for marketing the tourism industry, getting the Vatukoula mine started and finding alternative sources of fossil fuel from Papua New Guinea and South America."

Similar sentiments to those given by the Interim Minister of Commerce were voiced by an Economics lecturer of the University of the South Pacific Earlier the Reserve Bank of Fiji yesterday.

Last week, the Reserve Bank of Fiji had said that the economy would decline by around 2.5% in 2007 but will experience a turnaround in 2008.

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Monday, May 28, 2007

Fiji Water demand grows

The demand for "FIJI Water", bottled and marketed by Natural Waters of Viti Limited, keeps growing. The company's biggest challenge is to meet the demand.

The company has continued to make significant investment in Fiji and will be opening its third line of production at its Yaqara facility shortly.

"FIJI Water" is bottled at source from an artesian well in the Yaqara range in the Nakauvadra mountains in the Ra Province on the Island of Viti Levu in Fiji.

The company, Natural Waters of Viti Limited, was first set up in 1996 and started its export of FIJI Water in 1997. It currently has about 200 employees.

FIJI Water is sold at a "premium price" through retail outlets in the USA, Canada, France, Australia, UK and other countries.

There are other areas of Fiji which have more better tasting water than that marketed as FIJI Water but whose water have not been bottled. Some of the landowners on whose land the water sources are have decided to hold back on their resource given the (over) supply in the market.

Note : For information of some of these "undiscovered" water sources, pls call on telephones (679) 3396427 and (679) 9921427 or e-mail

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Call for review of Fiji's money lending laws

There are calls for a review of Fiji's money lending laws. The call was made by the Fiji Chamber of Commerce after an earlier comment by the Fiji Retailers Association about an increase in businesses resorting to money lenders, who charge astronomically high interest rates, to help with their urgent cash flow needs.

In the meantime, the Consumer Council of Fiji has called for tenders for a study of the effectiveness of the Fiji Money Lenders Act. The tender has closed and the outcome awaited.

The review of the money lenders legislation is aimed at making it more current and in line with developments in technology and the business of money lending.

Earlier, the Fiji Retailers Association said many businesses were going to moneylenders to meet their urgent cash flow needs.

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Saturday, May 26, 2007

Government should do more to help small businesses

A call has been made for Government and the Reserve Bank of Fiji to do more to help small businesses survive in the current depressed economic environment in Fiji. The call was made by the Fiji Retailers Association.

Perhaps if we had more people with business experience assisting Government and the Reserve Bank of Fiji with their policy direction and settings, it might allow a more better appreciation of the "real conditions on the ground" rather than a "textbook setting" to which most of our policy makers are operating from.

Small business loans officers and managers should also have more empathy with, and understanding of, the difficulties that small business owners are currently facing.

Read more in an article below from the Fiji Times, Saturday, 26 May 2007.

"Lenders prop up cash flow: Lodhia, Saturday, May 26, 2007

Many businessmen are resorting to traditional money lenders in a bid to enable better cash flow, says Fiji Retailers Association president Himmat Lodhia.

He said businesses were going through a difficult time and banks were not any help.

"The banks in this instance are being very tough and the business community has to folk out very high interest rates, penalty rates and also high charges. Almost all the banks are behaving as fair weather banks," he said.

Other lending organisations such as Merchant Finance, Home Finance and Credit Corporation were also charging high interest rates, Mr Lodhia said.

He said private money lenders were also behaving like shylocks.

"Unfortunately, during these times we find these loan sharks active and thriving given the tough economic conditions faced by the business community," Mr Lodhia said.

Bank charges and interest rates increased the cost of doing business and would lead to added costs to the consumer in the long run, he warned.

"We are finding the Reserve Bank is very silent on these fronts as costs are escalating for the people. They need to monitor them closer than ever now."

"This trend should be quickly harnessed and brought to control and interest rates by the banks should now be brought under control."

With the tightening of policies by the Reserve Bank, Mr Lodhia said small businesses should not be allowed to collapse as its snowballing effect could impact on larger businesses.

He said that would be something that would prove difficult for the RBF, the interim Government and the people to handle."

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Concern about rise in finance companies outside Reserve Bank supervision

The Finance Companies Association has raised its concerns with the rise in number of finance companies setting up in Fiji that are outside the supervision and control of the Reserve Bank of Fiji.

One of the notable ones has been a company from Papua New Guinea which has recently secured approval from Government to provide small payday-to-payday loan facilities to civil servants.

Members of the Fiji public should note that no company is authorised to accept deposits from the public in Fiji without being licensed by the Reserve Bank of Fiji.

Read more on the Finance Companies Association concern in a copy of an article in the Fiji Times, Saturday, 26 May 2007, below.

"Sharmas credit worry, Saturday, May 26, 2007

The Finance Companies Association is concerned with the number of lending institutions emerging outside the ambit of the Reserve Banks powers.

The associations newly-appointed chairman Parmesh Sharma said there were only three licensed credit institutions in Fiji. These were Credit Corporation Fiji Ltd, Merchant Finance and Investment Company Ltd and Home Finance Company Ltd.

Mr Sharma, who replaces Ross McDonald as association chairman, warned of bad credit practices within financial institutions not directly governed by RBF guidelines.

"The consumption rate is so high and daily livelihood has to be met. One of the areas of concern for the association has been the increase in the number of finance companies that are not licensed and that are not operating outside the regulatory control of the Reserve Bank," he said.

"The association has received reports of high interest rates and fees being charged by these unlicensed companies and this has been confirmed by recent media reports."

Mr Sharma said proper disclosures were needed from such financial institutions which provided soft loans as it could lead to money laundering.

It needs policing and its trickle down effort translates into mortgages and unnecessary litigation.
Mr Sharma was appointed chairman of the association following its annual general meeting in April this year.

He is general manager of Merchant Finance and Investment Company Ltd.

Mr McDonald is managing director of Credit Corporation Fiji Ltd.

He said the association had continued to prove its effectiveness as it was able to discuss many areas of mutual interest with the RBF while at the same time commenting on new policies implemented by the bank."

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Friday, May 25, 2007

More exports to Canada

More exports, particularly of fresh fruits and vegetables, to Canada from Fiji is being encouraged. This was the focus of the trip to Fiji this week of Fiji Consular to Canada, Ashwant Dwivedi.

Among the suggestions that Dwivedi made in a Fiji TV appearance this evening included :
  1. that Fiji aim to increase exports of fresh fruits and vegetables to Canada which was an open market (unlike a closed market like the USA which has only a list of permitted imports from countries such as Fiji);
  2. that exporters work on being able to meet the demand levels of Canadian consumers when they enter that market;
  3. that exporters work on being competitive with the pricing of their products; and
  4. that the "Fiji" brand, including all products marked as being from Fiji, have premium pricing in the Canadian market which Fiji exporters could take advantage of.

For more information on this, pls visit

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Six companies interested in TV licences

Six companies are interested in obtaining television licences in Fiji, according to the Ministry of Commerce, Trade and Investment. The Ministry said that the six companies, including both local and overseas parties, have been asked to submit detailed expressions of interest in accordance with tender requirements set by the Ministry. The submissions will include a writeup of their financial and technical competencies.

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Reserve Bank of Fiji profits from depressed economy

Reserve Bank of Fiji has announced a net profit of F$10.7 million for 2006, profiteering from the depressed economy.

This adds on to the earlier stories posted on this blog of banks in Fiji making huge profits in the current depressed economic conditions and the environment of high interest rates which were attributed to monetary policy decisions taken by the Reserve Bank of Fiji.

To an ordinary lay person on the street, his or her understanding of the situation is that the Reserve Bank's reasoning for raising interest rates which included protecting the level of foreign reserves, was only to protect its own financial position. There may be good economic reasons for the decisions being taken but, for an ordinary person, it all boils down to profiteering on the part of the Reserve Bank.

As in previous years, 50% of such profits are paid to the Government Consolidated Fund. This will happen again for the most recent financial results that were declared. The profits paid to Government help with Government's financial position.

The other question that needs to be asked is whether Fiji's foreign reserves were invested in the most optimal investment opportunities or were they not? Some of the central banks' foreign dollar assets are held in low-earning accounts with other central banks - funds which could have earned a little more from being invested in the money and capital markets in overseas countries.

For this, Government and the people of Fiji should call on the Reserve Bank of Fiji to provide an outline of its investment policy and approach, its preferred risk profile of investments and the returns it would target, for each coming year.

At the end of each year, it should then account to Government and the people of Fiji about how it has fared against that investment policy and approach and the returns it had targeted at the beginning of the year.

In simple terms, more accountability is called for on that part of the central bank's function.

In the meantime, reproduced below is the article in the Fiji Times, Friday, 25 May 2007, with regard to the Reserve Bank of Fiji's 2006 profit.

"Bank records $10.7m profit", Friday, May 25, 2007

Fiji's financial system was strong with total assets growing by 10.6 per cent to $8.7billion in 2006, says Reserve Bank of Fiji Governor, Savenaca Narube.

In the RBF's 2006 annual report released yesterday, Mr Narube said the bank recorded a profit of $10.7 million, which was lower than 2005.

Mr Narube said the 2006 profit was lower because of the lower level of foreign reserves recorded during the year.

In accordance with the RBF Act, the bank will transfer one-fifth of the balance of revaluation reserves which amounted to $4.2million.

The total transfer to government in 2007 would be $14.9million, the bank said.

In 2007, he says the economic growth is expected to decline by 2.5 per cent compared to an initial growth forecast of 2 per cent.

He said while the political events in the later part of 2006 as well as the closure of the Vatukoula Gold Mine in early December adversely affected Fiji's overall economic performance, the economy was still expected to grow by 3.4 per cent in 2006 slightly down from the initial forecast of 3.6 per cent.

Mr Narube said "our key economic challenge is to reverse the widening trade deficit".
He said exports must be the platform for growth and the country must speedily implement strategies to grow exports like sugar, gold and other resourced based products.

University of South Pacific economist Doctor Mahendra Reddy said the issue was not of a strong financial system but rather of how competitive it was.

"At the moment, we don't have purely competitive financial system. The banking industry is led by two major banks. Our non-bank financial institutions are also very few thus affecting competition," said Dr Reddy.

Mr Narube yesterday briefed the interim administration on the state of the economy."

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Will the Fiji Dollar really be devalued?

Will the Fiji Dollar really be devalued? Read an interesting analysis by an economist, Satish Chand, which is reproduced below from the Fiji Times, Friday, 25 May 2007.

"Dollar faces drop in value, Fiji Times, Friday, May 25 2007

The Reserve Bank of Fiji has come out strongly, denouncing the widespread speculation of an impending 15 per cent devaluation of the dollar.

The signals from the bank regarding its intentions have been mixed, at best.

The Governor, as late as last week, had voiced extreme concern regarding the worsening current account position in the face of dwindling export income and rising imports.

He then announced that some tough decisions would have to be taken; this could be read as a code for a devaluation, with the public being softened up before the strike.

Not so, if the bank's most recent announcement is to be believed, but again no central bank ever preannounces a devaluation.

Doing so would be akin to shouting 'fire' in a crowded theatre, with impending mayhem at the door.

A number of my academic colleagues in Fiji and the local business community have defended the decision of the bank, arguing they cannot afford a fall in the value of the currency.

This, on their part, is understandable, but the question remains as to whether the nation can afford to withstand the consequences of an over-valued currency.

Devaluation by choice would be preferred to succumbing to one because of a balance of payments crisis.

Such a change, regardless of its trigger, will produce gainers and losers.

We have noted the opposition to a devaluation from those likely to lose, but are as yet to hear from those likely to gain.

Surely exporters such as sugarcane farmers, vegetable vendors both for the domestic and export markets, and providers of tourism services are all likely to gain from a devaluation.
People remitting money home are likely to get more for their remitted funds.

Part of the import binge in Fiji can be explained by an appreciation of the Fiji dollar (against the US dollar) and an expectation of an imminent devaluation of the currency.

On the first, the value of our local currency is determined through a formula that combines the Australian, US, and New Zealand dollars, the euro, and the Japanese yen.

Each of these currencies has recently appreciated against the US dollar, and for good reasons.
The economies of Australia, New Zealand, Europe, and Japan have all outperformed the US economy recently.

Thus the demand for the US$ has fallen relative to the currencies mentioned above.

The formulaic determination of the Fiji dollar has meant an appreciation of the local currency against the US$, but few would dare suggest that the Fiji economy has outperformed the US economy, or for that matter that of Australia, New Zealand, Japan or European economies.

Certainly, the exchange rate is affected by a few other factors, but the above, for this discussion, should suffice.

There is little doubt that our economy remains in the doldrums.

Exports are down, tourist numbers are falling, foreign reserves are at record lows and falling, and workers are either being retrenched or working on reduced hours.

The RBF has eased conditions for credit while tightening further the avenues for taking money abroad.

The bank has been actively rationing foreign exchange and, before the coup, was raising interest rates in the hope of dampening demand, and has since December tightened up capital controls considerably.

The bank's cautions of the past two weeks suggest that these measures have not been sufficient to rescue the deteriorating foreign exchange position.

Could it be time to devalue the currency?

If so, then by how much?

The answer to the first, in my view, is in the affirmative.

On the second, the value of a currency as that for any asset can only be determined in a free market, but for now let me make a calculated guess.

If you had $173.76, equal to US$100, as of 12 September last year in a fixed deposit you could, at least in theory, have bought a US$100-denominated sovereign bond issued by the Fiji Government in Singapore.

If you track the value of the two options, namely that of keeping the money in the fixed deposit at home visvis the purchase of the US$-denominated bond, and ignoring any interest rate differentials between the two, your home asset by mid-April would have given you a capital gain of 12 per cent compared to the sovereign bond.

Absent capital controls, this differential would have been arbitraged out.

Furthermore, the implied overvaluation of the local currency by 12 per cent would be a conservative estimate since the supply of bonds has been kept fixed while that of local money increased since last September.

How long can the RBF wait until its hand is forced?

Hard to predict, but on the rate of decline in foreign reserves and absent a quick and strong rebound in exports and/or foreign investment, time may be running out.

The bank, if and when the devaluation eventuates, will have the defence of saying that it had good reasons not to announce a devaluation before the fact.

The backers of the currency at the Ministry of Finance, however, will not be able to use the same excuse.

Satish Chand is director of the Pacific Policy Project at the Crawford School of Economics and Government, Australian National University (College of Asia and the Pacific)."

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Wednesday, May 23, 2007

Higher prices for gas guzzlers

As I suggested earlier on this blog,, one of the ways that Government could control the high foreign exchange payments spent on importing oil is to charge a higher price for gas guzzlers such as four wheel drives.

Read here a similar proposal being considered now in the UK.

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Another sign of American confidence in Fiji

The American Chamber of Commerce will be opening a branch in Fiji. The branch office will facilitate foreign companies from America who wish to do business in Fiji and also provide opportunities for Fiji companies who want to launch their new products in the USA.

The branch office will also provide access to manufacturers and suppliers across the globe as well as office space and secretarial services to help its members organise their business agendas in the USA.

The American Chamber of Commerce has its in the United States and 94 branches in countries around the world.

The Chamber promotes free trade and investment between countries and the USA and can also help understand the legislative, regulatory, legal and financial process in the United States.

The Fiji branch has 44 corporate members with its office located in Suva.

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Dalo exports - a big potential

Dalo exports from Fiji has a big potential with around 30,000 tonnes expected for export this year. In 2006, total dalo production was 76,155 tonnes compared to 83,751 tonnes in 2005.

11,434 tonnes of dalo, valued at $20.93million, were exported in 2006 compared to an export of 9,959 tonnes, valued at $19million, in 2005.

The Agriculture Ministry said that with Fiji dalo well known for its taste, it provided an opportunity for farmers to produce more for export.

The slight reduction in dalo production last year was due to farmers producing cassava which were mostly bought by a local factory. Farmers were now planting more cassava as it is easier to grow and it got a good price locally.

60 per cent of the dalo exported was from Taveuni Island while the rest was from the Central Division.

Dalo price in the local market is F$10.00 to F$15.00 per bundle in the local markets while the New Zealand wholesale market prices for Fiji Pink is $65.00 per 30 kilograms and Fiji white is $55.00 per 30 kilogram.

Dalo planting takes place from August to November with harvests from February to March each year.

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Tuesday, May 22, 2007

Fiji Dollar will not be devalued

The Reserve Bank of Fiji said yesterday that there will be no devaluation of the Fiji dollar amidst rumours that a 15% devaluation is being considered.

The Interim Government has also said that no such action is being considered at this stage.

A University of the South Pacific economist said devaluation should not be seen as an option now. The economist said any move to devalue relative to Fiji's major trading partners' currencies would do more harm than good to Fiji's economy.

Read more on this in a Fiji Times article here.

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India to increase investment in Fiji

India will be looking at increasing its investment in Fiji in the areas of agro-processing, garment and textiles manufacturing, ICT and tourism according to reports of a request by Fiji's Interim Minister of Finance who is on a trip there.

Fiji's annual trade with India is in the vicinity of F$30 million with the expectation that it would hit the F$40 million mark in the next five years.

Currently, India exports to Fiji include drugs, pharmaceuticals and fine chemicals, gems and jewellery, electronic goods, man-made yarn fabrics while Fiji's exports to India include metal scraps, dyeing, tanning and colouring materials, pulp and waste paper.

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Opportunities for Fiji's black pearls

The Fiji Trade Commission in the USA is conducting market research to identify niche market opportunities for black pearl exports from the country.

The primary objective of the research is to open access to the USA for Fiji's black pearl farmers, especially village based farmers, and to boost growth and development of the local industry.

Black pearls from Fiji is an emerging resource based commodity that holds a lot of potential for growth and expansion, but needs direct support in marketing and market access, according to the Fiji Trade Commission.

Fiji's black pearl industry is relatively new and small with 10 farms (four owned by foreigners and six by local villages) in operation in the Vanua Levu area and started in 1998.

The Fisheries Department in Fiji said that the study would be good given that finding the right export market is what the industry lacks. USA is the world's biggest buyer of black pearls.

Tahiti leads Pacific Island countries in the export of pearls to the USA with average earnings of $US45 million ($F73m) per year during the period from 2004 to 2006.

In comparison, Fiji began pearl cultivation and production less than 10 years ago and averaged $US151,138 ($F245,040) annually in exports to the USA over the past three years. The industry is targeting an annual export of F$50 million of the product in 10 years.

The study will cover issues including market entry requirements, demand for loose and mounted pearls, basic customer or buyer profiles, location of buyers in the USA contact, trends and constraints, and lessons to be learnt from Tahiti.

A presentation of the findings of the study will be made to the public in Suva and Savusavu in June or July 2007.

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Monday, May 21, 2007

Retailers call for an Economic Think Tank

The Fiji Retailers Association is calling for an Economic Think Tank to be set up to make suggestions on assisting businesses during the difficult economic conditions currently being faced in Fiji.

Among the Association members' concerns is that the current high costs of doing business and high interest rates in Fiji is contributing to more and more businesses facing problems leading to winding up for some of them.

Some businesses have had to resort to the private funds of their owners or borrow from overseas to pay off debts and meet overheads.

Currently, businesses may borrow (up to a stipulated limit) from abroad to meet their business needs. On the other hand, foreign investors are required to bring in their own funds for setting up businesses in Fiji. Foreign investors running businesses may borrow only to meet their working capital needs from banks and financiers in Fiji.

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Sunday, May 20, 2007

Retailers notice drop in spending

Retailers in Fiji have noticed a drop in consumer spending in the first 4 months of 2007 compared to the same period in 2006. The drop has been attributed to the current state of the economy. Loss of jobs, reduced hours, wage and salary cuts and high interest rates have all contributed to the reduction in consumer spending. The next few months to a year will put extra demands on businesses in Fiji.

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Friday, May 18, 2007

Telecommunications Deregulation Discussions to start

Discussions will be held on 24 May 2007 with regard to a compensation package to be paid to present telecommunication providers in exchange for the removal of exclusive licences they currently hold.

The discussions are being coordinated by the Ministry of Communications and will be between Government, Amalgamated Telecom Holdings and other telecommunication operators who will be affected by the removal of exclusive licences.

Amalgamated Telecom Holdings' subsidiaries include Telecom Fiji Ltd, Vodafone Fiji Ltd, Fiji Directories Ltd, Connect, Xceed Pasifika Ltd and Transtel Ltd.

Currently, exclusive licences are held by FINTEL (international), Telecom Fiji (domestic fixed line) and Vodafone (mobile).

The telecommunications market is likely to be opened up earlier than exclusive deal given to the companies for which they will be compensated.

Plans for a new legal and regulatory framework as part of the Telecommunications sector reform was endorsed by the Interim Government.

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Thursday, May 17, 2007

Another airline to service Fiji routes

Another airline, Emirates Airlines, from the United Arab Emirates, is likely to service Fiji routes in future.

The airline is looking at two flights a week to Fiji to complete the 34 flights it presently takes to Australia.

The airline was approached by the Interim Minister for Labour to look at the possibility of introducing these flights.

If it goes through, the proposal will open up more in-flight cargo space for exports to overseas countries.

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Wednesday, May 16, 2007

Posting will not be regular this week

To regular readers and visitors to my blog, posting will not be regular this week as I am attending a seminar over the entire week. For that, I apologise to everyone. I will be back posting regularly from this weekend.

In the meantime, if you wish to enquire about a specific issue, do drop me an e-mail on


Saturday, May 12, 2007

Government considering merger of Housing Authority and Public Rental Board

Government is considering whether to merge its two low cost housing institutions, the Housing Authority and the Public Rental Board. An independent study to further evaluate this proposal is to be commissioned by Government after finalising an appropriate terms of reference.

Given the wage and salary earning structure of small developing countries such as Fiji, there appears to be scope for development of institutions that provide low cost housing.

Read more of Government's plans in the following article taken from the Fiji Times, Saturday, 12 May 2007.

"State studies merger of housing bodies, Saturday, May 12, 2007

The roles of the two housing institutions could be redefined under a study being undertaken by the interim Government.

The Ministry of Social Welfare and Housing is looking at the roles of the Public Rental Board and the Housing Authority.

Interim Minister for Housing and Social Welfare Adi Lafitu Malani said there was a need to find out if the institutions were providing affordable housing.

"We are re-looking at the functions of the Housing Authority and PRB in regards to responsible social housing," she said.

"We need to confirm whether they (HA and PRB) are fulfiling their initial objective of providing affordable housing or if there is a need to redefine their objectives."

Housing Authority chief executive officer and former PRB board member Alipate Naiorosui said Cabinet had approved the merger of the two institutions in principle.

"An independent study will have to conducted first," he said "We have been kept in the loop and have assisted the ministry in the terms of reference.

"The ministry was finalising the advertisements so the tender for the study should go out soon."
Mr Naiorosui said the merger could be beneficial for people.

"As CEO housing, I fully support this initiative because it will bring about many benefits for our customers," he said.

"This is nothing new and is done overseas.

"In New Zealand and Singapore such institutions have been merged.

"HA and PRB were separated in 1989, after a World Bank study recommended it."

Mr Naiorosui said the merger would be difficult but good.

"There is a huge demand for low-cost housing and this could be planned well under one roof because we will one data base," he said. "It's not easy but we will assistance from other stakeholders."

Adi Laufitu highlighted problems faced by her ministry in dealing with stakeholders."

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Thursday, May 10, 2007

United States continues to show confidence in Fiji

The United States of America has shown its continued support for Fiji and the Pacific Islands region in efforts to promote and increase the duty free treatment of exports to the USA from the region.

USA also announced that a new regional office will be built in Suva, Fiji, to oversee US public diplomacy activities throughout the Pacific.

The sign of confidence provides a big boost to Fiji's efforts to rebuild its economy over recent months.

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Colonial National Bank Fiji joins in reducing lending rates

Colonial National Bank in Fiji has joined ANZ Banking Group Limited and Westpac Banking Corporation in reducing its lending rates. The rate reduction applies for all home and business loans.

The announcement sees the bank reducing lending rates for home loans and business banking by 0.25%.

The bank's variable rate on residential home loans falls from 12.25% to 12%.

The new rates will take effect from 19 June, 2007.

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Wednesday, May 09, 2007

Banks reduce lending rates

As I predicted earlier on this blog, banks will reduce lending rates from 1 June 2007. Following the lead by Westpac which reduced its lending rates from 1 May 2007 by 0.5%, ANZ Banking Group Limited announced that it will reduce all its lending rates by 0.25% from 1 June. This brings down ANZ's special 1-year fixed rate home loan to an interest rate of 9.75%.

The reduction of lending rates came about after an improvement in bank's liquidity positions when their reserve deposit requirements held on deposit with the Reserve Bank of Fiji was reduced by 1%.

Hopefully, the reduction will not cause another round of increases in the prices of homes and properties which have been at unsustainable levels over the past few years.

Due to a lack of demand and the high interest rates environment, home and property prices have started to come down in recent months.

With a continued improvement in banks' liquidity positions, I would expect lending interest rates to reduce further over the next few months.

Note : Check out the low rates for advertising on our other blog here.

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Monday, May 07, 2007

Fijian Holdings pays F$2million dividends

Fijian Holdings Limited (FHL) has paid F$2.046 million as interim dividends for the six months ended 31 December 2006.

The dividends is based on 10 cents per share for A-class shares and 5 cents per share for B-class shares and is the same as that paid out for the comparable preceding period dated 31 December 2005.

The interim dividend was based on FHL's operating results for the first six months of the current year in which the company made F$2.262 million profit after tax. Over the next six months, FHL has said that it faced a very tough operating environment.

The new Fiji Anti-Corruption Unit has said that FHL could face detailed investigations depending on the outcome of preliminary investigations by the Unit.

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Dubai and UAE investors interested in Fiji

Investors from Dubai and the United Arab Emirates (UAE) are interested in Fiji. One company is keen on setting up direct travel services to Fiji. Investors from Dubai and the UAE are interested in a whole range of areas for investment, particularly tourism related services.

The Interim Minister for Tourism says that an increase in foreign investment in Fiji would also be hinged on having tax laws and processes that were conducive to attracting investors, referring to problems that were faced by the hotel developers at Momi Bay recently where the Interim Prime Minister had to intervene to enable the project to continue after it had come to a halt when the hotel developers and the Fiji tax authorities had a disagreement with regard to having tax charged upfront for land sales at the hotel site.

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Friday, May 04, 2007

More demand for travel to the Pacific from Asia

A report in the Fiji Times today, Friday, 4 May 2007, highlights an increase in demand for travel to/through the Pacific from Asia. Figures quoted from the International Air Transport Association showed that Asia-Pacific aviation was up 6.9% in March 2007 while available seats grew at only 6%.

Singapore Airlines said the figures indicated that there was room for the airline to fly between Australia and the US, a route the Asian carrier is blocked from.

An approval of more airlines to service the Australia-USA route would mean more stopovers for Fiji which will bring us more tourists and opens up more air cargo and export links to Asian countries.

Before Air Pacific acquires the capability (aircraft capacity) to fly direct to Singapore and other Asian destinations which it plans to do, they could learn from large established airlines such as Singapore Airlines if these were approved to fly the Asia-Pacific route.

Singapore Airlines has also been an airline that has proven itself in terms of its high service standards - again lessons that Air Pacific could benefit from.

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Thursday, May 03, 2007

No Changes in Interest Rates by Reserve Bank of Fiji

The Reserve Bank of Fiji has made no changes in official interest rates after its Board Meeting held on Thursday, 26 April 2007.

Here is a copy of a press release issued by the Reserve Bank of Fiji on 27 April 2007.


The Board of the Reserve Bank held its monthly meeting on 26 April 2007 and decided to leave unchanged the Policy Indicator Rate (PIR) at 4.25 percent.

The Board noted that indicators for consumption, investment and credit growth suggest a decline in domestic demand. On sectoral basis, the performance of the tourism industry remains mixed while the sugar cane and other crops industries has been affected by the recent flash floods.

Annual credit growth continues to decline as the effects of the credit ceiling and other policy actions of the Reserve Bank take effect. This trend is expected to continue in the coming months.

The Governor and Chairman of the Board, Mr Savenaca Narube noted that downside risks to the economy include the threat of industrial actions by Trade Unions and the possible delay in reforms of key industries like Sugar. The Governor concluded that while the trade deficit remains, there are early signs that the monetary policy measures are dampening import demand.

Reserve Bank of Fiji"

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Tuesday, May 01, 2007

Colonial National Bank Interest Rates (Updated 1.5.07)

Schedule of interest rates released by Colonial National Bank are as follows :
  • Business Banking Base Rate - 11.95%;
  • Residential Property Loan : Variable Rate - 12.25%, 1 Year Fixed Rate - 10.40%, 1.5 Years Fixed Interest Rate - 11.00%;
  • Investment Loan : Variable Rate - 12.25%, 1 Year Fixed Rate - 10.40%, 1.5 Years Fixed Interest Rate - 11.00%;
  • Retail Term Deposits : 9 months - 4.75%, 1 year - 5.00%, 1.5 Years - 4.00%, 2 Years - 4.50%, 3 Years - 4.50%.
Interest rates are on a per annum basis and may be varied by the bank without prior notice.

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Westpac Interest Rates (Updated 1.5.07)

Schedule of interest rates released by Westpac Fiji are as follows :
  • Business Lending Rate - 11.99%;
  • Residential Property Loan : Variable Rate - 11.75%;
  • Investment Loan : Variable Rate - 11.75%;
  • Retail Term Deposits : 6 to less than 9 months - 4.25%, 9 months to less than 1 year - 4.25%, 1 year to less than 1.5 Years - 4.25%, 1.5 years to less than 2 Years - 4.25%, 2 years to less than 3 Years - 4.25%.
Interest rates are on a per annum basis and may be varied by the bank without prior notice.

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Connect Internet : More Downloads at the Same Price

Connect Fiji has announced its new rates with take immediate effect from today, Tuesday, 1 May 2007. The promotion sees an increase (doubling up) of data download caps with 6 months of free local calls on weekends. The rates are as follows :
  • 128Kbps speed, monthly rate of F$39.50, previous data cap 750Mb, new data cap 1500Mb;
  • 256Kbps speed, monthly rate of F$89.50, previous data cap 1000Mb, new data cap 2000Mb;
  • 256Kbps speed, monthly rate of F$125.00, previous data cap 2000Mb, new data cap 4000Mb;
  • 256Kbps speed, monthly rate of F$199.00, previous data cap 3000Mb, new data cap 6000Mb;
  • 512Kbps speed, monthly rate of F$299.00, previous data cap 5000Mb, new data cap 10000Mb;
  • 1024Kbps speed, monthly rate of F$39.50, previous data cap 8000Mb, new data cap 16000Mb.

The promotion applies both to new and existing customers. An installation fee of F$99.00 applies for new customers.

For more details, pls visit Connect Fiji's website on or call their toll free number on 0800 3316677.

Note : Compare with Kidanet Fiji's rates which were posted on this blog earlier.

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