Investment – a nation’s heartbeat

Written By : CHarlotte Peters. Fiji’s investment policy is based on the following principles: investment should be market-driven; investment should be welcomed from all legal sources; investment should be welcomed
27 Jun 2008 12:00

image Written By : CHarlotte Peters. Fiji’s investment policy is based on the following principles: investment should be market-driven; investment should be welcomed from all legal sources; investment should be welcomed into all areas of the economy, except where legislation reserves specific economic activities for citizens, for social policy purposes; government should stimulate and facilitate investment; investment facilitation shall not discriminate between foreign and a local investor unless stated otherwise in the legislation reserving certain economic activities for citizens for social policy purposes; investment-related legislation should be transparent and efficient, designed and implemented as the regulations that are minimally necessary to achieve a specific public policy objective.
Investment like Reserve Bank of Fiji Governor Savenaca Narube said is the locomotive of growth and without it the economy would lose steam.
He said it is always encouraging to see businesses growing and we need investment now more than ever before.
Speaking at the at opening of Westpac’s MHCC branch last week, Mr Narube said
Westpac has come a long way since they opened in Fiji as the Bank of South Wales on August 12, 1901 and now Westpac has the second largest number of bank branches and agencies in Fiji.
This he said was an impressive progress and congratulated Westpac for their commitment to Fiji and for their confidence in Fiji’s financial system.
Touching on investment, Mr Narube said, “Confidence is a special thing. True, it is hard to build and very quick to fall. And generating your own confidence when the climate is hard is a tough thing to do. “
Mr Narube said it could also be self fulfilling and contagious. “It is always encouraging to see businesses growing.
“As they say business must go on whatever is the environment. No one owes us a living,” said Mr Narube.
Investment he said must continue and Fiji needs more of it as the economy depended on it and hoped that Westpac’s confidence would rub off on many of us.
The RBF he said was doing what it could to promote investment and at the end of April raised the local borrowing limits of non-resident companies in light of the stability in foreign reserves.
“We listened to what the investors and the commercial banks were telling us. The change was welcomed and well received by lenders and investors,” he said.
The RBF is going further still and have just completed their review of the local borrowing limits of non-resident individuals.
He said they were relaxing their borrowing too. The governor announced major changes whereby the RBF would build new residence in Fiji, non-resident individuals do not have to bring in all their funding from offshore, they could now borrow locally up to 60per cent of the project cost.
Secondly, they were making further refinements to their local borrowing under an integrated development project.
“We do not want to inconvenience projects that had already started when we implemented the policy at the beginning of this year.
“If your company can convince us that your project had substantially started before that, we will add your project to our so called exempted list which would allow non-resident individuals buying your properties to borrow even more locally,” said Mr Narube. Mr Narube said these relaxations were positive signs and counted them as proactive moves. He said they were intended to signal that we should focus on what lies ahead of us.
These relaxations he said would provide much needed impetus to private sector investment.
“The credit ceiling is not constraining investment in this country. If a commercial bank wants to lend to your business for investment purposes, all it has to do is apply to us and we will give our approval in a very short period of time generally within two days.”
Moreover, the governor said the credit ceiling has allowed the RBF to raise liquidity which has reduced interest rates.
“Interest rates are generally where they were back in 2005. So again interest rates are not constraining investments.”
Meanwhile, Westpac has said it would continue to support and encourage investment in this country.
General Manager John Cashmore said Westpac has grown with the city of Suva and the rest of the nation for 107 years, so their continued expansion in Fiji in opening an additional branch in Suva, epitomised their commitment to the country in these difficult times.
He said their support and encouragement to invest in Fiji was evident with their new branches and major investments in new technology and ATM’s and also in their assistance to customers and sponsorship of events that encouraged dialogue and promoted investment in Fiji.
“We have recently gone a step further to produce a brochure with the assistance of some of our other business partners, providing a step by step guide to business to investment in Fiji,” said Mr Cashmore.
The Fiji Islands Trade and Investment Bureau is the trade and investment promotion arm of the country and is responsible for stimulating, promoting and facilitating trade and investment in Fiji.
The bureau offers investment incentives to investors to stimulate investment growth, employment and export creation.
Outgoing chief executive officer Lailun Khan said the bureau was still registering new projects and attracting foreign investments.
Mrs Khan said trade and investment is important to Fiji because it generates activities that create jobs, wealth and savings and is an important element of our country’s economy.
She encouraged locals to invest as this exudes investor confidence which would encourage foreign investors to invest in our country for the betterment of our economy. Last year she said the bureau focused its facilitation effort to 50 large projects that were registered from 2003 to 2006 with an investment value of about $6.2 billion.
“By September the Bureau was able to facilitate 42 of the 50 projects,” she said.
Suva lawyer Richard Naidu at the recent Fiji Institute of Accounts Congress said following the rule of law and staying within the framework of the Constitution is what investors want.
He said investors want a stable, understandable set of rules that does not change.
Mr Naidu said there was no point in the interim government telling us of the many things it was doing to make itself investor friendly when the investor community does not believe it.
“It’s about confidence and you cannot have confidence until you have rule of law,” said Mr Naidu.
A consultant Josiah Qalovaki has called on resource owners to analyse all the potentials and possibilities in developing natural resources as this would be a good investment and have long-term benefits.
Mr Qalovaki and his team have successfully negotiated the approval and consent of the Ba Provincial Council for the preparation of a provincial master plan which would be facilitated by some investors who are keen on the project.
The master plan has been prepared for the long-term development of the natural and human resources in the province of Ba.
“Our master plan is actually based on the wholly Fijian owned enterprise. It has to be. There can be ways of having investors share in that but these things are sustainable, investors are just looking at that,” said Mr Qalovaki.

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