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Analysis: Opportunity Lost

Analysis: Opportunity Lost
National Federation Party leader, Biman Prasad.
March 14
10:00 2018

National Federation Party leader Biman Prasad yesterday lost a good opportunity to make a meaningful contribution to Acting Prime Minister and Attorney-General Aiyaz Sayed-Khaiyum’s ministerial statement on the Financial Sector Stability Review for Fiji.

Instead of focusing on what was presented in Parliament, Mr Prasad went off track and started talking about people on boards and alleged that he had evidence of conflict of interest.

He tabled no such evidence but offered to give it to the minister outside the House.

Why is this review important and why was it important that Mr Prasad and others in the Opposition make robust contribution to it?

The review provided a number of critical insights and recommendations that could be implemented in a coherent and systematic manner.

The International Monetary Fund (IMF) mission team was in Fiji from February 14 to 27 comprising seven experts headed by Peter Lohmus, IMF Senior Financial Sector Expert.

The mission team had consultations with the;

• Reserve Bank of Fiji

• Ministry of Economy

• Auditor-General’s Office

• Fiji National Provident Fund

• Fiji Development Bank

• Housing Authority;

• commercial banks

• credit institutions

• unions, and

•insurance companies.

The review helps identify financial sector vulnerabilities with the key objective of formulating and implementing a financial sector reform programme which will be supported by an intensive follow-up technical assistance.

The programme seeks to review country-specific risks and vulnerabilities; the adequacy of institutional frameworks; and the capacity of financial regulation and supervision, as well as crisis prevention and management.

In fact, Fiji is only the fifth country in the world, and the first in the Pacific region to undergo a Financial Sector Stability Review.

This is why robust contribution to such a report is expected of those who are voted into the House.

More importantly, it was also highlighted that we are still paying for the National Bank of Fiji debacle which happened under the watch of SODELPA leader Sitiveni Rabuka.

When we have financial stability through robust financial infrastructure and sound financial institutions and markets, it fosters the process of wealth accumulation by individuals, businesses and the Government.

As highlighted in Parliament by Mr Sayed-Khaiyum, Government is looking at giving shares to ordinary Fijians in the Fiji Electricity Authority (FEA) so they can participate in the Capital Markets.

They will get to appreciate the Capital Market. This will allow for the trading of shares. In this way, the Government will not only create new revenue mechanisms but also grow our Capital Market.

We need to take advantage of our hub status and further our position as a financial hub. This is important because wealth accumulation enables our country to flourish and assures our ability to manage unanticipated and unavoidable adverse events.

So the trick is, we need to be able to identify the risks now and to invite people with the right expertise and experience who can assess and tell us about the inherent risks.

As Mr Sayed-Khaiyum said given that five out of six commercial banks are foreign-owned, we need to know the steps to take if something happens to the Parent Bank.

“We need to be very open about it, discuss it in an impartial manner as to what the risks are and what contingencies we need to have in place. It’s not just about the level of security for us but it also makes us more attractive for investors because they will know that our financial system is not only stable in good times but also in time it is not necessarily good because of events that may be due to global factors.”

Edited by George Kulamaiwasa


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