Q1. In order
to locate our readers, we would like to know
who we are interviewing. You are involved
in FTIB, FHC, and FIC. What is your position
in each of these institutions and in what
other boards are you present?
A1. I am a retired businessman. I made
sufficient investments during my business
life which have given me good returns so I
can afford to be present in various positions
even though these are not paying positions
as such. I started particularly after the
event of May 2000 when people were loosing
confidence in Fiji. I believed back then and
I still believe today that Fiji has a lot
of potential. What we had was literally called
a hic-up and we had to be manage to keep people
focused. As a result, there were vacancies
on various boards and the appointer thought
I would fit in some of them so I committed
my time there. A lot of the companies that
were government organizations had to restructure
from the old government perspective to a more
commercial perspective. I have been involved
in the Fiji Investment Corporation, the Fiji
Hardwood Corporation, the Fiji Trade and Investment
Board and the Trade Standards Advisory Council.
I was a member of the Housing Authority, a
government authority looking after the housing
of the people in the low income stream, and
now I am also Chairman of the Maritime &
Ports Authority of Fiji. At the moment, I
am more focused on Ports and FTIB. Fiji Investment
Corporation is a new institution and thus
I am not that heavily involved with, about
the other ones, I spend at least two or three
hours a day.
Q2. Taking a look at Fiji's economy,
if we compare it with countries like Jamaica
or Mauritius, we can see that they have
grown to achieve the 25% of GDP investments
a year desired for a developing country,
while Fiji presents a flat growth rate over
the years. What are the reasons for this?
A2. Answering to your question in an objective
way, I would say that the reason is because
we did not have sufficient plans or structures
to focus ourselves where our competitive edge
is. The restructuring of the telecommunication
sector or the establishment of the Fiji Sugar
Corporation has taken a lot of the efforts.
A lot of the potential has gone into restructuring
of government organizations like the Ports
Authority of Fiji, where we created Ports
Terminal of Fiji Ltd. PTF is the operator
of the stewarding and activities on the wharf.
The separation brought challenges for the
long run so we have not really focused at
where the expansion is needed. FTIB has been
doing a good job as you can see from the industries
that have been established but it has not
matched the 25% growth that we should have
achieved as a developing country. But this
has been addressed in trying to capture some
major investments, particularly in the area
of Ports infrastructure, with the project
to expand the Port of Suva where the waterfront
area will have to be reclaimed and extended,
a project estimated to be over 300 million
FJD. There is also potential in other area
of Transportation, perhaps another International
Airport in Suva.
Q3. Is Fiji prepared to be hub of the
Pacific in terms of marine and air communications?
A3. Yes. Fiji has been the hub of the
South Pacific for some time but it has not
taken advantage of the additional opportunities
that exist in this country. There is a lot
of merchandise that goes thorough our economic
zone into the South, Australia and New Zealand.
They are transshipped through Fiji on to the
South Pacific countries. I believe there is
an opportunity to capture here. It is a chance
to demonstrate the shippers and the shipping
industry that mega ships wanting to spend
little time between cargo loading and unloading
will be able to achieve this in Fiji. We are
geographically in a strategic position to
take advantage of it.
Q4. If Fiji does not achieve a growth
from 11% of GDP in the investments to 25%,
the economy will not grow the 5% needed,
the population will suffer the consequences
and social instability will come back to
Fiji. FTIB is the institution in charge
of attracting more FDI into the country.
What are the responsibilities and the financial
efforts that FTIB has planned for 2003?
A4. Many. There have been some social
ills that have come into Fiji, particularly
in the area of lack of employment, distinguishing
it from unemployment as it is practically
impossible to reach 100% employment. The lack
of investment brings lack of employment and
other social evils such as poverty, crime
and others. In 1977 the private sector investment
had a GDP ratio of 13.7% and in 1997 it slipped
to 3.7%. If we analyze the figures carefully
you will find a co-relation with the social
evils I mentioned and we have to address them,
being this one of the prime focus of FTIB.
In order to achieve this we are proposing
a major Expo in Los Angeles in August this
year. Why Los Angeles? Because USA is the
1st largest economy of the world and Los Angeles
is the 5th largest economy of the world. If
we capture a small portion of the opportunities
there we will have an impact on our GDP figures.
We proposed it to be in partnership with Marketing
Edge, a company from California that has experience
and credentials for marketing expos as the
one we proposed. The Expo will cover the whole
of Fiji's economy but the major players will
be the Fiji Audio Visual Commission, the Fiji
Hardwood Corporation, Ports, FTIB and we are
hoping to bring on board some exporters to
USA which include the sugar, the textile and
the footwear industry. Fiji Waters will be
there as well as some producers and exporters
of fresh food and also others that have potential
for exporting to the US.
Q5. In your presentation of the next
three years Corporate Plan, the "investment
promotion" and the "development
of exports" were two aspects that received
the strongest attention. How do you plan
in further details to achieve this?
A5. There is a continuing liaison with
prospective investors. A project that is likely
to materialize is the "Retirement Village",
which has a large potential and is likely
to be the first one to happen this year. The
Fiji Investment Corporation has an interest
in this project and It has been promoted by
FTIB. Another major development that is likely
to materialize is the Convention Center. Once
again, because of its strategic location Fiji
has the potential for these two projects and
most of the business in Australia and New
Zealand have the interest in them. There are
many advantages for them coming into Fiji,
rather than going from Australia or New Zealand
to America or the other way around. It is
better to use the midway point so this is
an opportunity and I think it has a tremendous
potential. An investor has been identified
and the plans are well progressed. It is up
to the state and they are now looking for
finance. |
Q6. To put
an example, Mahogany is one of the biggest
opportunities that Fiji presents at the moment.
As Chairman of FHC, what is the potential
that this industry have for Fiji and what
is the state of the trial period?
A6. It has just commenced in October 2002,
it is the beginning of the whole trial period
and then we will be looking for a strategic
partner. One of the reasons for this trial
period is to establish some hard data which
will be used for the negotiations. I have
to emphasize that the Fiji mahogany plantation
is the first one in the global market, so
we are acting as trendsetters in the world.
That is the advantage. The disadvantage is
that we have not got hard data to present
to potential investors in the market. The
trial is now to establish that. The quality
of the logs that are coming is being checked
by a professional company that provides the
evaluation of the plantations and they are
obtaining very pleasing results. In their
respect it was said that if they had 60% retrieval
from the trees we would be doing well. We
are pleased to know that we are getting 75%
out of the plantations at Nokualoa, in Tailevu,
and 68% out from the plantations at Nabuatini
and Naloa. So we are pleased with the quality
of the logs but now they have to be translated
into products. We have also ventured into
a partnership agreement with a timber processing
company and they have sent samples of timber
to various parts of the world, particularly
to Europe and USA. We are in the process of
obtaining a license to ship out two containers
loaded of log to New Zealand to be processed.
The advantages that arise from working in
these conditions in terms of price and return
offer a ratio of 3 to10. We are thus looking
for a strategic partner in order to go down
the full track, the intention is to establish
subsidiary companies. Fiji Hardwood Corporation
Ltd. will remain as the asset owner and manager.
Then there will be processing companies with
strategic partners. There will probably be
downstream processing, which is yet to be
accessed. This is the question, furniture
management with the appropriate partnership.
Certainly, processing, management and the
actual products are important, yet branding
can give you greater added value. Therefore
we are focusing in putting Fiji Mahogany on
a platform that will give us the commercial
advantages. We have already registered the
names of "Fiji Mahogany" and "Mahogany
Fiji" with the objective of branding,
which will in turn give us the maximum return
of the product. We might not have the cash
to fund all the projects but we have 160 million
FJD in assets, and that is bankable. It will
all make up for a very good business.
Q7. FIC is an institution created to
assist projects that find it hard to get
investments. Mr. Siwatibau told us the best
way to tell to the world to trust in Fiji
is if Fiji invests in Fiji. Do you agree?
A7. It is all a question of having sufficient
capital. Capital can appear in two different
forms. Shareholding capital or borrowed capital.
Some of the proposals we analyze at FTIB do
not have the sufficient equity capital so
the intention of the FIC is to give them that
support, to be able to strengthen the balance
sheet in terms of equity capital to attract
more capital for the project to proceed. I
work closely with FIC and FTIB and there are
synergies in both organizations, which we
are exploiting to the maximum.
Q8. The current government in Fiji encourages
business that enter in partnership with
the indigenous people. Why would you encourage
foreign investors to establish partnerships
with the Indigenous Fijians?
A8. It is not only the capital that counts.
The Fijian people have got the biggest strength,
the biggest asset, as 83% of the land belongs
to them. They do not have the strength of
capital, in terms of cash, nor do they have
the strength in the borrowing power that is
needed. The experience that goes into a project
is a very important thing too. If we combine
this four aspects there is a big possibility
in that project to become a business but people
must understand this. Most of the land in
Fiji is leased by the indigenous owners. The
greater chance for them to realize the potential
of their asset is to get into the business
via partnership so that they become equity
holders in the business. The Government is
already promoting this aspect by creating
a Fijian Mahogany Trust, also meant to solve
the complexities of traditional land ownership
in Fiji. It will be a trust to manage the
interest of the owners.
Q9. Fiji's negative reputation among
foreign investors after 3 coups is difficult
to change. What is your message to that
International Business community that still
focuses on those issues when a new Fiji
is being built?
A9. Immediately after the event there
were two options for the nation. The first
one was to put an interim Government and take
the country back on the path of democracy,
which is what we did. The second one was to
let anarchy prevail. The international community
does not recognize the positive side of that
whole incident perhaps because of the nature
of the event. People need to understand what
has happened in order to give sufficient credit
to Fiji and the leaders who brought the country
from anarchy to democracy. This demonstrates
that we form part of the international community,
that we are doing business and that it is
working out. There are certain problems that
have been unique to us but they are being
managed. A lot of dissatisfaction and problems
in Fiji arise from the lack of investment
and the key to increase investment is to change
the negative view that the international community
has obtained due to the way the press have
painted things.
Q10. What advantages would foreign investors
find now in Fiji as compared to other developing
countries?
A10. First of all the opportunities we
offer and second the very friendly investor
government we have. We are in a strategic
location and in a privilege time zone in contrast
with Europe and USA for the development of
technology, on data processing, as the data
is processed during their sleeping time and
ready for their next day, or vice versa. This
is a tremendous opportunity and we have the
facilities due to our link with the Southern
Cross Cable. We have this competitive advantage
over anywhere else in the world to offer to
investors. We have a very high literate English
speaking population, which will be an advantage.
Our regional and international communication
links are strong. We have a very good financial
system. Our monetary policies are such that
the profits here can be repatriated without
any control. I would encourage investors to
come and find out for themselves. I know a
lot of people that have come here with a negative
perception and eventually have gone back very
happy. The diamond is there to be harvested,
this diamond is the people of Fiji. I guarantee
you that in 10 years time Fiji will be different
if we all focus in the right direction. At
the moment there are certain disparities between
various communities but we all have to do
it first for ourselves which in turn will
be positive for the international forum. We
must realize what our problems are and what
are the other parties' problems.
Q11. Mr. Singh, what can you tell us
about yourself?
A11. I was born in Fiji, trained and worked
for the New Zealand government at the Nadi
Airport and in the Royal New Zealand Air force.
My business background is property management.
I started as a technical person in Civil Engineering
and joined the government of Fiji in 1957,
where I worked for 17 years rising to the
position of Assistant Director of Land. My
nature made me change directions so I ended
up joining the private sector. I became Property
Manager and rationalized the property portfolio
of Carpenters, which was one of the largest
property owners in Fiji, and developed a lot
of properties, one is the dominion house in
Suva, at the time one of the largest buildings.
I then became Director of Dominion Property
Trust and director of Carpenters. Finally,
at the age of 60, I thought it was time to
do something else and my wish was to retire
but we had the events of May 2000 and that
changed my plans in the national interest.
So here I am, much to the disappointment of
my grand children, but someone has to do it
and I believe I have that duty and responsibility
for the country. Retirement and life on the
beach is not for me at the moment.
Winne cannot be held responsible for
unedited transcription.
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V.I.P. INTERVIEWS
