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.
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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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V.I.P. INTERVIEWS
