Q1. FTIB is the investment
and trade promotion Agency formed back in the 80's
to promote, facilitate and stimulate economic development.
Could you tell us what have been the most significant
efforts of the FTIB in the last two years towards
developing the Fijian economy?
A1. The most significant efforts for us have
been concentrated on keeping the investors in Fiji
during a very difficult time. When the 1987 coup
d'état occurred, they thought that a rebellion
in Fiji, the paradise, was really unlikely to happen,
and that it was just an economic abbreviation. But
after the coup in May 2000 the average investor
was expected to feel like leaving the country. Many
of them took very seriously this third overthrow.
Therefore, a lot of our efforts were addressed towards
testifying that Fiji had a good record bouncing
back very strongly after a political turmoil. If
you look at this country's economic record you will
realize that some of the best economic performances
in Fiji's Independent history took place during
the five-year period after 1987. This shows the
relative resilience of our economy. To a large extend,
our success has been to continue the talks with
them. One example is Nestle, who has been looking
into the possibility of setting up a Noodles Factory
Plant in Ba, in the western side of Fiji. An investment
of $10 million dollars.
Q2. In what aspects do you put more emphasis
when you talk to those investors?
A2. When we speak to these investors we try
to persuade them. We understand the way they feel
and we understand sometimes it is difficult but
we tell them that we have a good record of bouncing
back strongly and we feel that this time the economy
is going to bounce back as well. We will be doing
a lot of promotion telling them that it is going
to come out right and the predictions we have given
to them have been largely burnt out. Just before
I went to Australia, three weeks ago, I was speaking
to the General Manager of the Trend West and he
told me: "Mr. Vitu, we have been having a 97%
occupancy rate". Taking into account the previous
rates, these figures are really good and the way
this hotel has performed in the last months have
encouraged them to proceed with stage three of their
development. I remember back in year 2000, when
the coup happened, and I got a call from this same
hotel that had opened its development stage one
only two days before the coup: "We want to
proceed with stage two regardless what has happened".
Many would have forgotten about keeping their investments
and going on with more development but they thought
it was going to come out right. I told them that
by the time the stage two was ready to be opened,
it would have been 24 months since the coup, that
this event would have long blown away and that the
tourists were going to be back be back to the paradise.
They took the risk and other projects did not proceed.
Now they are catching on it. Now, with the terrible
events that have stricken Bali, there are going
to be a lot more arrivals to Fiji.
Q3. Bali terrorist attacks are something that
nobody could expect. Is Fiji ready to coup with
this new increasing demand?
A3. No, Fiji cannot cope with this demand. I
spoke to Air Pacific in Sydney and their forward
booking is being very high. I do not think they
can pick up any more passengers that were at going
to Bali and now they are coming to Fiji. Our air
transport and hotel capacity is already full. During
a recent conversation I had with the Permanent Secretary
for Tourism, we came up with our need to cash in
this spillover from Bali. Qantas clearly has to
mount extra flights, Qantas and Air Pacific are
partners so they might be able to increase their
flights into Fiji. We also have to do something
with our hotel capacity, maybe some of the homes
would be good to be used for hotel purposes in the
meantime. This measure was quite successful in the
Cook Islands during our trouble times, when the
tourists from New Zealand were going to the Cooks
or to Samoa instead of coming to Fiji.
Q4. What are the respective responsibilities,
the concrete functions, of the FTIB and the Cabinet
sub-committee on investment concerning this raise
of FDI in the country?
A4. The FTIB is like the arm of the government.
Once the government has decided the areas with the
highest need of investments we are there to promote
these areas and also the concessions available.
That is the first part of the promotion. Once they
come to invest in our country, we are there also
to process their applications, get the necessary
approvals from various ministries and after securing
these approvals we work with them to get their project
implemented. The third part of our activity look
upon providing advices to the government regarding
the policies they should be formulating in order
to increase investments and exports. The Sub-committee
on investment was set up by the government in order
to speed up the process of getting the approvals
because we knew that we need to move fast after
the events of year 2000. Some of our procedures
needed a shortcut in order to implement these investment
projects so the decisions have to be taken at the
highest level so that the decision can be done very
quickly. In other words, they have to facilitate
the approval that is necessary to get this investment
project going.
Q5. What are those advices you have been giving
the government in order to increase the incentives
for FDI?
A5. First of all I would like to talk about
the tourism sector, the most important sector of
our economy. Over the years we have been working
with the government to bring about really attractive
incentives. We know that we are competing with the
whole world and above all with Bali, Malaysia, all
those neighboring countries where the investments
could go to so we have to be sure that our incentives
are more attractive than any where else. We are
disadvantaged in one way as we are in the middle
of nowhere. Apart from our main markets, Australia
and New Zealand, you have to travel 10 hours to
get to here if you fly from LA, and 24 hours if
you fly form Europe. We really have to offer a much
more exciting holidays than they could get anywhere
else, and we do. In order to attract investments,
for projects that represent higher investments than
F$50 million we offer a 20-year tax holiday, this
is the major incentive. It is quite expensive to
build a hotel here because you have to import most
of the material so, for them to reduce costs, we
set a duty free importation of all the materials
needed for the construction. For projects lower
than F$50 million we offer a ten-year tax holiday
and also duty free importation of the materials
for the construction of the hotel.
Q6. You just came back from an investment promotion
mission in Australia, What can you tell us about
the results of this mission and the improvements
in the relation between both countries?
A6. Australia represents a very important market
for us, not only for export but also for investments.
It was necessary for us to give them an update about
what has happened in Fiji, politically and economically,
and on the investment climate. We told them about
our economic performance, we told them that the
economy only contracted by 3.2% in the year 2000,
and taking into account the political turmoil that
we went through, this figure is the testimony of
the relative resilience of our economy. We explained
to them that we have recovered very strongly, with
a growth rate of around 4.4% and expecting next
year a 6% growth. This is a the forecast to continue
exciting investors from Australia and that was the
first message we gave them. The other message we
gave them is that investor confidence is bouncing
back powerfully. The investor confidence is very
sensitive, you can be switched off very quickly
and getting back that confidence is very difficult.
Democracy can be smacked but can also come up again.
We have had democratic elections one year ago and
we have now a democratic government so the political
confidence is back but the investor confidence takes
a while before it comes back again. People are wondering
if it is worthwhile coming now and invest in Fiji,
this is the first sign that the confidence will
be back. In the movie "Independence Day",
at the end of the film, the main character ask his
family: "Where would you like to be when the
world is coming to an end", without missing
a bit, his teenage daughter Jessica answers: "I
want to be in Fiji", he asked Jessica: "Why
would you like to be in Fiji at the end of the world?"
and she said that in Fiji everything comes fifty
years later. Investor confidence has not taken fifty
years to come to Fiji, it has come right away, and
it is bouncing back right away. |
The Trend West decided
to go on with stage three right away and that is
an example. Australia has been one of the first
countries to say that they like what they have seen
and they have restored full diplomatic relationships.
New Zealand followed Australia and the Commonwealth
did too. Fiji relies a lot onto the International
good will as 60% of our economy is exports. We are
highly relying on the preference trade agreements.
Without these preference trade agreements we be
in bad situation. It is very important for us to
win back the International good will. Australia's
Prime Minister, Honorable John Howard, was very
happy about what is happening in Fiji, he said that
Fiji could be a model in the world. In the Pacific
Islands, Solomon is going through very difficult
problems, even Vanuatu and other neighboring countries
and Fiji was held up by Mr. Howard as a good example
for the countries in the Pacific Rim. We also talked
to a few companies interested in setting up Call
Centers here as Fiji is now presenting very good
advantages in the IT Industry: Call Centers, Data
Processing, etc. We speak good English and we have
good telecommunication infrastructure, we have a
labor force with really competitive wages so many
companies are looking into Fiji to set up Call Centers.
The ANZ (Australian National and New Zealand Banking
Group) have already set up a Call Center here. We
are talking to ACS (Accessories Computer Services),
the large American company. They have bought the
Call Centers operations for the National Processing
Corporation (NPC) and they are going to do Data
Processing for Qantas and Air New Zealand here in
Fiji. NPC was going to do it back in year 2000 but
when they were installing the equipment the coup
took place and they left but now they are back.
Q7. Besides being part of the Southern Cross Network,
what are the advantages that Fiji presents for
the IT industry?
A7. We asked a New Zealand company to make a
survey on what were the advantages and in which
areas should we be pushing more in order to promote
this industry. In that survey we did back in year
2000 Fiji showed a tremendous potential for the
IT industry. They summarized by saying that we have
an excellent platform with the Southern Cross Network,
we have low cost wages and the English speaking
ability. We speak with no accent, so we are easily
understandable if you compare with Indians. We also
have advantages when compared to Europe because
when Europe is sleeping we could be doing the processing
and when the sun rises you have what you want. We
have about 13,000 school leavers every year, an
abundant labor force for an intensive labor industry.
When ANZ was recruiting the people to work in their
Call Centers they were very happy with the quality
of the workforce.
Q8. What other interesting investment projects
from other countries are you currently evaluating
and which countries are showing the biggest interest
in Fiji?
A8. We recently had a business trip to Europe
and U.S. This time we concentrated on L.A. as California
is the fifth largest economy in the world so there
is no need to worry about the whole of the U.S.
We were trying to attract some of the investments
in Fabric Manufacturing. We talked to one company
that has been in the business for thirty years and
that is looking to set up a fabric manufacturing
plant here. Our garment industry has grown to such
a level that it represents a critical mass and it
can support a small to medium size fabric manufacturing.
They were quite excited about the idea and they
announced to us that they would be coming to Fiji
in November 21st for the Export of the Year Award.
There was also a swimming wear factory that showed
interest in coming into Fiji because they wanted
to attack the Australian market and to export all
the way from the U.S is quite a long way.
Q9. Are you talking about using Fiji as a platform
to export to neighboring countries?
A9. Absolutely, they are not here just for the
local market. We are only 800,000 people We always
tell them, when you come to invest in Fiji, to forget
about the local market and think more of Australia,
of New Zealand or of the U.S. They should think
of the European Union. Because of the agreements
we have with the European Union they can export
under preferential terms. For the local market they
can go to China or to India but when you come to
Fiji you think also of Japan.
Q10. Do you feel that Fiji should strengthen
the commercial links with any country in particular?
A10. That depends on what you are looking at.
If you are thinking about investments or about export.
Our traditional export markets are Australia, New
Zealand, U.K and U.S. Australia has been our largest
export market. Back in 1999, 43% of our exports
were to Australia, mainly Gold. Gold is the fourth
largest industry here. A significant amount of our
garments also goes to Australia. After the problems
that went through, we saw how exposed we are to
the Australian market and we determined to diversify
our export market to minimize the impact we experienced
in year 2000. We decided that we had to upgrade
a policy called "Look North". We should
be looking to the north more than to Australia and
New Zealand. U.S. is already a big market for us,
in terms of garments and fishing, but we want to
increase our export to the U.S for other commodities.
Q11. What about the Asian market?
A11. Asia is very interesting for us. Asia should
be in our minds when we talk about "Look North"
but, what can you export to Asia that they do not
already have? We also went to China this year, they
have almost everything, we are doing some export
in terms of sea cucumber, small fishery products,
etc., but nothing that would be significant to us.
This is why we have to make the distinction between
the export market and the investment market. China
is an investment market. Many Chinese are becoming
very wealthy. Estimations show that 15% of their
population is millionaire, the Government owns most
of the industries in China. We can give them those
opportunities to invest in Fiji. Other countries
are going to try to attract the investments from
China so we are targeting that country. Other interesting
Asian countries for us to attract investments from
are Malaysia, Singapore and Korea. In fact, next
year we are thinking about settling in South Korea
because we have an embassy in Malaysia but not in
South Korea. There is no doubt that Asia is important
for us. In 1998 we were interested in that market
and we sort of pulled back when the financial crisis
hit Asia. Now it is time to revisit those countries
and we have planned an investment mission on Singapore,
Malaysia and Korea. India is definitely another
interesting country for us and it will represent
for us not only investments but also an export market.
India has this added advantage of experience in
the IT industries, the sort of industry we want
to go into and we could work together on that particular
aspect. Our government is thinking of setting up
a mission there in India and already we have a Fiji-India
Business Council.
Q12. What promotional activities are the FTIB interested
in carrying out in order to put Fiji on the map
as a safe investment destination?
A12. After May 2000 there was a lot of work
to do to repair the image of Fiji, the bad publicity
that Fiji had received. We knew that before trying
to excite investments we had to correct the perceptions
about Fiji. Time is a good healer, you forget things
over time and it is very difficult to erase from
the mind of the people that Fiji is like a Paradise.
When you go to France and you talk to them about
Fiji, the immediate image that comes to their mind
is "paradise". Our work is not too difficult,
we had a coup but now it is peace loving again.
Fiji is a nice place to go to and that is why we
bounced back in tourism already. Basically people
still remember Fiji as a wonderful destination,
no coup will remove that. four or five weeks ago
Mary Chaney, the daughter of Dick Chaney, came to
spend her holidays here. She went to Beqa Island,
where the Sawa tribe walks on fire, she went to
the Marlin Bay Resort, etc. That speaks well of
how secure is this place. Fiji is back in the minds
of the people as a good place to go, it is secure
as it is in the middle of nowhere. Fiji is back.
Fiji's investment environment has greatly improved,
investor confidence is back and the people out there
ought to be excited about doing business in or with
Fiji.
Winne cannot be held responsible for unedited
transcription.
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