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Thursday, January 17, 2008

More on reduction in remittances to Fiji

There is more in the Fiji Times today on the possible reasons for the reduction in remittances to Fiji in 2007. Copied below is the article from the Fiji Times.

"Employers speculate on remittances drop, Thursday, January 17, 2008

A drop in remittances could be attributed to Fijians employed overseas investing there instead of sending money to Fiji, says Fiji Employers Federation chief executive officer, Ken Roberts.

Mr Roberts was commenting on figures released by the Reserve Bank of Fiji this week which showed money remitted by Fijians working overseas hit $183.7million in September last year a drop of almost 30 per cent when compared to the $260.7million for the same period in 2006.

Reserve Bank of Fiji acting deputy Governor Barry Whiteside said reasons for the decline could not be ascertained by the central bank.

Mr Roberts said it was strange that remittances were declining.

"I could not suggest the reasons either but maybe they are investing money overseas," he said.
The University of the South Pacific's associate professor in economics, Doctor Mahendra Reddy said there could be three reasons for the decline.

Firstly, Fijians working outside Fiji in the past two years had sponsored their loved ones overseas so they did not send money home, Dr Reddy said.

He said secondly, Fijians working overseas might be holding on to the money as a result of the law and order situation in the country.

The third possibility was that given the economic instability of the past two years, many people anticipated a devaluation of the Fiji dollar. Dr Reddy said Fijians might have stopped sending money home as a result of the rumours about a devaluation.

Colonial Bank's general manager John Harper said they were doing research with groups working overseas to find out the reasons behind the decline.

Mr Harper said he could not give details of inflow of remittances and outflow through Colonial as this was commercially sensitive information.

Capital outflows had also dropped, Mr Harper said."

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