There is not much new initiatives to be undertaken on financial sector reforms in Fiji as announced in the 2009 National Budget that was delivered on Friday, 21 November 2008, by the Interim Prime Minister and Minister for Finance.
Much of the initiatives mentioned are those that the financial sector authorities have been saying that they were working on for a number of years past.
Of interest though is what is being said with regard to the deregulation of the superannuation industry. There is some mention for a detailed study to be done "on advancing the deregulation of this industry".
Will the deregulation of the industry attract new players, given that one of the primary concerns with regard to the industry is that their potential investments are mostly restricted to assets and projects in Fiji? Will the Fiji National Provident Fund still be "encouraged" to invest its the funds in government securities and to fund Government's borrowing needs, even if there are new competitors?
Also of interest is the work to be done on Micro, Small and Medium Enterprise Development. The Budget mentions that the Reserve Bank of Fiji is working with stakeholders on how Micro, Small and Medium Enterprises can be developed further in Fiji and what role the Reserve Bank of Fiji should play.
In summary, much more effort needs to be put in by the
authorities to advance thinking and development of our financial sector. There needs to be critical thinking from our regulators and the players in the financial sector on how we can keep our financial sector vibrant and attractive to potential investors.
There will be a huge challenge to balance that and what happens on the political front, however, this does not stop everyone doing some critical thinking.
Is this a time to go into offshore banking? One where we can still provide services to foreign investors and offer rates and features that are not linked to how the domestic economy works. Funds obtained from foreign investors are not invested in Fiji but overseas so they are safe from domestic hiccups.
What services can our financial regulatory authorities provide in
the region to regulators of other small island countries? Are we still able to maintain our competitive advantages in this area compared to our upcoming competitors, Samoa and
Papua New Guinea.
How can we encourage more locally owned financial institutions to establish themselves in Fiji and then to branch out into the Pacific after having operated successfully over a number of years? This will serve as a way to hedge country risks of financial institutions incorporated in Fiji.
With regard to Micro, Small and Medium Enterprises, is the Reserve Bank considering a new facility to provide a volume of funds and/or concessionary rates for lending to Micro, Small and Medium Enterprises? Is it considering providing scholarships or paying for training on basic business operations and management for the large number of Fiji's population as an incentive to encourage people to set up their own businesses in light of potential downsizing of companies and organisations as a result of the global/local crisis in the business sector?
Again, as I had already mentioned above, more critical thinking needs to be done by
the financial sector and regulatory authorities to advance Fiji's financial sector rather than give us the usual "this and that" that we have been hearing for a number of years now.
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