Rick Hou sure of Solomon Islands economy

by Dionisia Tabureguci
photo of Rick Hou supplied by Central Bank of Solomon Islands


WHEN the century turned in 2000, so did the social and political matrix of a few countries in the Pacific islands. While nations like Samoa and Cook Islands were earnestly mending the nets of their economies to better their prospects, others like Fiji, Papua New Guinea and Solomon Islands were going the other way. In particular, the meltdown of Solomon Islands towards the end of the 1990s is well documented as being linked to land-related tension between native Guadalcanal islanders and neighbouring Malaitans.
The reign of the Isatabu Freedom Movement, a group that comprised Guadalcanal islanders, saw the attacks and subsequent displacement of Malaitan settlers on Guadalcanal, finally erupting into a takeover of Honiara and Bartholomew Ulufa’alu’s government in 2000 by armed militants that belonged to the Malaita Eagle Force.
Continued standoffs resulted in the occupation of Solomon Islands by the Australian-led Regional Assistance Mission to the Solomon Islands (RAMSI) in 2003. Law and order were gradually restored and economic rebuilding began.
In those trying times, one institution that held fast to its mandate was the Central Bank of the Solomon Islands. With governor Rick Hou at the helm, the country’s economy began a slow but steady climb back to normalcy. In April this year, Solomon Islands held its first national elections since the ethnic tension.
However, the newly elected government and its prime minister drew a violent public outcry after being accused of corrupt collaboration with Asian businesspeople.
Rioters burned and looted Chinatown, a commercial section in the capital Honiara run by Asian businesspeople. While this did put a dent to progress made in rebuilding the economy, Hou remained optimistic that the country will not suffer. In an interview with ISLANDS BUSINESS Magazine, he spoke of an economy that is faced with other major challenges.


INTERVIEW

IB: You were optimistic about the Solomon Island economy before the April riot. Do you still feel that way?

Hou: Oh yes. I am still optimistic. Last year, the economy turned a 5 percent growth and our forecast this year is 6 percent. Given the persistence of the trend that we saw happening most of last year, indications are that the trend will continue so we will keep our growth forecast for this year and last year. We will not review them.


IB: So the April riot is not going to be affecting the economy so much. How is that?

Hou: Our assessment is that there is not a lot of impact in the short term. We looked at the government revenue side and felt there would not be a lot of impact there. I guess the areas where we will have negative impact are in security, property rights and investment confidence. The riot came at a very bad time when we were trying very hard to rebuild confidence and it is not a good thing to happen at a time when we are doing this. So I think we will have to work very hard again to convince not only our own people here but also most overseas investors to invest.


IB: What then has been the driver of Solomon Island’s economic growth?

Hou: Last year, the main drivers of the economy were construction, utilities and distribution or wholesale activities. That one has dramatically gone up.


IB: Is this because of RAMSI?

Hou: I think so. But generally, the economy is picking up, especially the construction sector. There’s a lot of construction going on…roads, bridges, buildings. But along with that, consumption has also gone up really dramatically.


IB: RAMSI, we have been told, will extend its stay in the Solomon Islands. How do you see that in relation to the country trying to put forth a good image for investment?

Hou: You ask the ordinary man on the street about the presence of RAMSI and they will tell you that, yes, we need RAMSI. I guess the feeling of normal Solomon Islanders here is that our institutions are still fragile and there is still a need to get on top of the issue of law and order. Our government departments need to be sorted out. So there is a lot of need for institutional building, training, skills upgrade…these are all happening at this time and I think it is not going to be a short-term thing.
I also believe that these are areas where RAMSI’s input should be - in building our confidence in our institutions and that our own people can manage them, for example, the government department, finance. I guess it is in the rebuilding process where we will need RAMSI to help us in. So I think the extension of RAMSI will be positive there. But I think what RAMSI should be careful of is giving an impression that it can fix everything because it cannot.


IB: You were saying that there is a need for rebuilding and strengthening institutions. What is the situation right now?

Hou: Yes, there is that great need. Look at our police force for instance. It was badly affected during the ethnic tension. We had officers who were taking sides and as a result, the integrity of the police force was badly affected by the ethnic tension. We are now in the process of re-recruiting and retraining and in the process, we hope that the confidence that the public has in the police force will return. At the moment, it is still doubtful. So our police force is one institution that needs to be upgraded in terms of the confidence that people have in it, that it can really enforce the law. Other institutions like government departments; well, some of them are doing very well because of RAMSI’s presence in them, for example the Ministry of Finance and Treasury. They have people in there who are looking after things, for example, in treasury, things are now under control as far as government finance goes. Now they are going to have local counterparts to understudy the overseas RAMSI officials that are occupying positions there. Good things are also already happening in the judiciary. Much improvement is needed in other areas like the utilities. Our electricity and water supplies are very weak at the moment. Also in the areas of good governance, we are very weak here in the Solomon Islands so we need to revamp the governance aspect of our all institutions, whether in government, semi-government or those in the private sector.


IB: And then there is the issue of corruption…

Hou: Yes, there is a fair bit of that still happening and this is because of the absence of governance principles, rules and regulations. Some people tend to interpret rules and regulations according to how it is convenient for them and in some institutions, the checks and balances are still not there. One of the things that people have been urging RAMSI and government to do is to bring to account any corruption cases. There are a lot of speculations and allegations going on but nothing has really come to the front to prove that corruption has taken place. People have been terminated and sacked as a result of allegations for corruption and in the last government, ministers were sacked left right and centre but I don’t think there has been any case where the court has sent people to jail for their involvement in corruption.


IB: You were talking about the problems of over-logging. How much of a threat is that to your economy in your effort to gain from your natural resources?

Hou: I have three concerns when it comes to logging. The first concern is that of the environmental damage that logging is causing to our country. I am not sure about the management practices that logging operators apply in the forests. I can only see it in my own local area where – I mean I know very little about forest management - but all I know is that rivers are not flowing and what you have in the lagoon is mud and that’s all I see. So definitely, some environmental concern is there. The other concern I have is: what will happen when we run out of trees? According to the forestry experts at the Forestry department, we will run out of trees in six years’ time if we keep cutting at the rate we are cutting. Six years is not a long time and that is where my third concern is, when we will be looking for something to fill this gap.
Sadly for us, logging has now become the mainstay in terms of foreign exchange and in terms of our exports as it accounts for almost 60 percent of our exports. In terms of our exports, logs is one of our few exports and it account for more than 50 percent of our exports. It is also an important government revenue – it accounts for more than 30 percent of government revenue so it is a very important commodity at the moment. My concern is: what will happen in six years’ time?
The third concern that I have is really a question that I have been raising for a number of years that I just have this gut feeling that the local economy is not getting maximum benefits out of logs. Yes I mentioned that it is the leading export earner for us but it could be more. I am not sure about the prices that we are getting out of our logs because we do have very valuable trees here. I am not sure about the value we are getting for our exports and the value we are getting in terms of our import duties because for a number of years, these logging activities have enjoyed a lot of exemptions. I am also overly concerned about the resource owners. I am not sure whether they are getting any benefits out of this. I have my doubts.


IB: So this is mostly the private companies who are here to do logging?

Hou: At first it used to be foreign companies who come in here to do logging. The license allowed you to do logging and give you a quota, which allows you to log a certain cubic meter of logs. In the last few years, the government had moderated that project. What it did was gave resource owners the license and, in theory, these resource owners and landowners would own and run the logging operation. However, things did not happen that way. The thing that is happening now is the landowner or the license holder, usually goes out in search for a foreign company to operate the logging operations. And there’s very little government involvement in the negotiation process. And this is where I see the landowners losing. For example where I come from, some of the landowners are getting SB$40 (US$5.20 per cubic meter) and I am not sure if the landowners know exactly that they are getting the wrong end of the stick.


IB: Isn’t there a mechanism or process in place that will take care of the marketing of this commodity?

Hou: There have been suggestions and discussions and proposals on this but unfortunately the way the whole process has been managed is so murky and disorganised that everyone is doing their own thing. And as long as you can get a license, a concession and landowner agreement, you go ahead and log. At the end of the day, I think the landowners are the ones who are losing out the most.


IB: Solomon Island’s foreign reserves situation looks attractive with an average seven months import cover, mostly from aid monies as you’ve mentioned. Would you expect this situation to continue in the immediate future?

Hou: Solomon Island’s external reserves position has been relatively high since 2004. In fact, over the last 18 months, the foreign reserves represent an average of six months of import cover. This is quite an achievement given that the Solomon Island’s external reserves have, historically speaking, been always below three months of import cover. So for the moment, our external position could not be better. We are very mindful however, that much of this was derived from donor assistance and other RAMSI related activities in the Solomon islands. However, since last year, we have seen some improvement in long-term sustainable sources of foreign exchange, for example in exports and foreign direct investment. I believe the favourable situation would continue for some time yet. Much of the economic reforms and physical infrastructure rehabilitation work has barely started and hence with government commitment and donor assistance, it should still continue for the foreseeable future. These reforms and the rehabilitation process will take time and commitment, but when pursued consistently, economic activity is expected to pick up further.


IB: Inflation is at around 10 percent. Could the economy sustain such high rates and what is being done to mitigate inflationary pressures?

Hou: Historically, double-digit inflation is not new to the Solomon Islands. However in the last two years, it has been maintained in single digits. More recent numbers released by the Statistics department show inflation has declined to 8.5 percent by the end of 2005. This is within the central bank’s policy objective, which is to keep inflation below 10 percent per annum. Prolonged inflation of over 10 percent would pose a threat to economic growth. Current monetary conditions however pose potential risks to this policy objective. The banking system is highly liquid and the government has built substantial deposits with the banking system. Higher oil prices, accelerated lending by commercial banks, a draw down of government balances and the RAMSI spending could all add to inflationary pressures. In a small open economy like the Solomon Islands, price stability is vulnerable to all these movements. The previous government had acted sensibly and responsibly to help ease this pressure and the new government should do the same. The central bank is poised to take appropriate action to lessen any inflationary pressure by mopping up excess liquidity to influence domestic credit growth. We may also use administrative measures where necessary and of course, use moral suasion. We do however encourage financial institutions to provide greater access to financial services in the rural areas.


IB: What about exports, how is that faring?

Hou: Solomon Island’s export base is very narrow and is mainly in raw materials. Production levels of our main commodities – round logs, fish, copra and cocoa – have rebounded since the restoration of law and order. Log production has been running at record high, although unsustainable, levels. Production levels in other commodities are already close to pre-crisis levels. There is still capacity to increase production and to broaden the economic base. The Oil Palm project, which has been taken over by a PNG-based investor, is expected to start production this year. Given the high level of interest in this commodity, it may in future become a major source of employment, foreign exchange and general economic activity for the Solomons. In the mineral sector, although its production schedule has been pushed back by about a year, plans to restart the Gold Ridge mine is already a source of confidence building.


IB: What is your view on the progress of the global economy and how Solomon Island’s economy can benefit from it?

Hou: The positive growth indications in the global economy are encouraging as it will be helpful to us. More particularly in Japan and some of the Asian countries, which are important destinations for our exports, we are hopeful that these positive trends will continue. However, the consistent rise in oil prices will seriously undermine these hopes. For Solomon Islands, oil accounts for about 40 percent of our total imports and is an important component in local production. The increasing oil price therefore poses potential risks to this positive outlook. And for a small open economy like Solomon Islands, we are extremely vulnerable.

---
NOTE: This is the original transcript of a Rick Hou interview, published in the Islands Business Magazine as: Interview: Rick Hou, GOVERNOR OF THE CENTRAL BANK OF SOLOMON ISLANDS, pp 34,35, September 2006 edition.

Islands Business is the flagship publication of Islands Business International.
***

Training top on APP agenda

Association of Pacific Ports consolidate through new secretariat

by Dionisia Tabureguci


TRAINING of management level personnel is top on the agenda for the South Pacific Community’s Regional Maritime Programme (SPCRMP), the new secretariat of the Association of Pacific Ports (APP).
It takes over from the Ports Authority of Fiji (now Fiji Ports Corporation Ltd) and was formally handed the function in the signing on a Memorandum of Understanding between SPCRMP and APP during the latter’s 31st annual conference held in Fiji last month.
SPCRMP’s maritime ports security officer Timoci Tamani said the move should go a long way in helping the organization to realise its goals by virtue of SCRMP’s expertise and the network that it has already established in the regional maritime industry.
“In the past years, the APP secretariat had been taken up by Fiji on a volunteer basis so all the expenses and everything related to the secretariat was borne by Fiji all along. And because there was no full time person responsible for that role, most of the activities that APP did or would have liked to put in place were not done. In essence, everything just went to sleep as those tasked with doing the secretariat’s job had their own responsibilities with FPCL,” said Tamani.
It was only logical, he added, that the role be transferred to SPCRMP, a programme that comes under SPC’s Marine Resources Division.

More important are the two key components of this programme which include the provision of legal advice on maritime policy and legislation as well as the provision of training to maritime administrations, training institutions and seafarers throughout the region to bring their operations into line with international codes and conventions.
Now with the two organizations in direct alignment with each other, what has been envisaged is “the strengthening of APP as a formidable lobby group in the Pacific with SPCRMP harnessing the power base of its members to take up regional issues collectively with the objective of bringing about awareness and proactive change to the Port industry.”
That is a key, although long-term goal. A more immediate issue that APP is faced with, according Tamani, is the lack of formal training for port workers and this is what the new secretariat will set out to do first.
“We have a F$500,000 grant from China for port development for the next five years and we will be using it for training. We are already lining up target recipients for that,” said Tamani “We think we will spend all that amount within two or three years because of the need that is there.”
Also under discussion is a proposed Degree level course at the University of the South Pacific to treat the subject of maritime transport management, in a bid to inject a more serious tone into the port business.

“The course will be for the shipping industry – for the ports, shipping and movement of cargo. There is not a place in Fiji where one can go to and do those courses so we are talking with USP it already has campuses around the region. Last year, we held discussions with people in the port industry and as a result, we saw that there was a need for such a course. Many people working in the port industry are experienced workers but very few have proper qualifications because the courses are only available overseas,” said Tamani. “We are proposing with USP for this course to come under its School of Marine Studies and we hope that it will start by next year.”
With an expanding and what is now becoming a more sophisticated port business in the region, the APP conference ended with the views that the need for training is crucial.
Also on its agenda - and which the secretariat will be expected to play an important role in – is to get governments in the Pacific to recognize the importance of their port business to their economy.
“We are all island countries and we depend on a large degree on seaports for our external and internal trade. But the emphasis seems to be on tourism and air traffic,” commented Herbert Hazelman, executive president of APP. “We feel that Pacific island ministers and governments should give seaports and the maritime industry more recognition. Give it the recognition that it deserves because we are island nations and all we do is rely on the sea for the transfer of 95 percent of our trade and the majority of our population between the islands.”

After its symposium, APP presented its list of issues to the meeting of ports chief executive officers also held in Suva on the same week.
“We did a one hour presentation and it was well received. Hopefully, there would be some changes in attitude by governments in the Pacific in that they give due recognition to ports as a major player within the economies of island countries.”
Hazelman said most of the issues common to all ports in the region are pollution, the presence of derelicts and the lack of a formal training programme for land-based port management.
“With SPC’s involvement, we will hopefully be able to push our agenda up there to be recognized alongside air transport, tourism and the rest of it,” he added.
---
NOTE: This article was written after coverage of the 31st Annual conference for the Association of Pacific Ports (APP), held at the Fiji Ports Corporation Limited's HQ, Kaunikuila House, at Flagstaff Suva, Fiji from June 04 to June 7, 2006.
The article was published in the Islands Business Magazine as: TRAINING TOP ON APP AGENDA, Bringing port operations into line, p37, December 2006 edition.

Islands Business is the flagship publication of Islands Business International.
***

Vodafone Fiji upgrades to 3G

But where is the ISP license?

by Dionisia Tabureguci

IS FIJI's Internet Service Provider market really deregulated or is it still showing signs of a hallucinating monopoly haunting the living daylights out of existing and potential newcomers?
One must not ask Lionel Yee a question even closely resembling that because he will only politely direct your attention – and in a very rhetorical way - to the decision made by that previous government which chose the model of deregulation for Fiji’s telecommunication industry.
As chief executive officer of Amalgamated Telecom Holdings (ATH), holding company of Telecom Fiji Limited (TFL) which is the majority shareholder in Vodafone Fiji, Yee is often heard to express to the media how peeved the conglomerate is at the way the telecommunication industry had been handled and how short people’s memory seemed to be when it came to acknowledging that.
If ATH has become a beast that people love to hate, then the beast was created not by its management, but by past decisions that loiter around like a bad smell that wouldn’t go away.
“We didn’t get into this space for free,” says the veteran corporate manager who is also chairman of the Vodafone Fiji board. Yee’s foray into telecommunication began immediately after the Fiji National Provident Fund bought 49 percent of ATH from the Fiji government in 1998. He had taken over the role of ATH CEO after serving at the top management level of the pension fund for a number of years.
“We paid close to F$250 million for this and don’t forget, part of the agreement when we bought it was that we have five years of status quo. But we never had one minute of peaceful existence. Every five seconds, we have people trying to barge into us.”
Yee made another classic side step during a press conference in Suva last month when asked about Vodafone Fiji’s ISP license status, since the company has now begun to offer Internet based services to the general public.
He mumbled something about the country’s sole mobile telephone service provider going into wireless Internet and the rest was inaudible.
While announcing its US$15 million partnership with Ericsson Australia for the upgrade of its mobile network to a 3G standard – which its release says will cost it a total US$50 million over a five year period - this affiliate to the country’s biggest listed company had nothing to say about its procurement of a license to provide what would now become new revenue sources among its range of services.
“High speed web surfing and data access while mobile will become a reality so the experience will be the same whether you are in the office or outside. Speeds of at least 1MB/s and up to 14 MB/s should become the norm,” Yee announced. “The new technology will allow Vodafone Fiji to launch a whole host of new infotainment services such as Vodalive!, multimedia messaging, video telephony, location-based services and high speed wireless Internet.”
Behind the grand design however, no one is in a hurry to talk about levelling the playing field where licensing is concerned. There are people in the industry who are confused about this. Does Vodafone Fiji need an ISP license to operate or does it not?


...ATH CEO and Vodafone Fiji chairman Lionel Yee announces the Vodafone Fiji/Ericsson partnership in Suva, Fiji, November 2005.






If it needs a license and does not have it, why has it been allowed to provide Internet services? Another subsidiary question pops up: where is the industry regulator in all this?
What has been labelled as “one hell of a messy confusion” does not end there. Both TFL and its subsidiary, Internet Services Fiji Ltd (trading as Connect) do not have ISP licenses, a point that was raised by the Commerce Commission in its recent ruling on the price of telecommunication services in Fiji. If, under Fiji laws, companies are required to be licensed in order to provide Internet services, as has been required of the new independent ISPs, why are Connect and Vodafone Fiji exempted from this rule?
The Department of Communication, which is the industry regulator and licensing authority, had referred all queries to its ministry’s chief executive officer.
The Ministry of Information, Communications and Media Relations is silent on this issue and did not reply to questions sent to it.
In all fairness, it may be pointed out that telecommunication is a complex industry where problems are not solved overnight. But ISP licensing has been a sticking point since the Internet was introduced into Fiji in 1995. Local media reports at the time had pointed out that there was no mention of the issuance of an exclusive ISP license to Telecom Fiji. Ten years on, this point remains unclarified despite the huge change in Internet and Internet technologies since then.
Yee later reiterates what TFL has consistently argued over the years. That the exclusivity clause in TFL’s telecommunications license is all-embracing and covers all forms of communication in the domestic market, whether transmitted via telephone, telex, telegraph or in data form.
This same rule applies when TFL transferred the part of its license that deals with mobile communication to Vodafone Fiji when the latter was incorporated in 1993.
The conglomerate’s deep conviction with this argument has, over the years, seen it reluctant to allow new players into the market despite government moves to gradually deregulate certain parts of the industry. To illustrate the incumbent’s reluctance, one ICT specialist pointed to the fact that despite the number of ISP licenses that has been issued by the government since it opened the ISP market in 2000 – and this amounts to more than 10 licenses – not one new player has entered the market until this year. If those who had applied for those licenses had banked on some brilliant ideas that they could bring cheap connections to their customers by buying bandwidth directly from offshore resellers or directly from FINTEL (Fiji International Telecommunications Limited), they were greatly disappointed. TFL waived its exclusive licence and emphasised its right of control in the domestic telecom kingdom. No one was going anywhere if they did not go through its network. That being one part of its argument, it then moved to dub itself an ISP and created Connect in 2002 to trade its Internet business. As the Commerce Commission highlighted, both still do not hold an ISP license. But as Yee and TFL managing director Josaia Mar have often argued, every move that TFL makes is catered for in the company’s telecommunication license.
This argument has never been legally challenged however and there are those in the industry who still wonder about how this license, issued in1989, could have foreseen the advent of the Internet when this medium of communication was still a budding cocoon at the time and the world had yet to come on line.
But if the unclarified issue was swept under the carpet, as some commentators believe, then it has been flushed out again as the ATH Group of companies, particularly Telecom Fiji and its subsidiaries Vodafone Fiji and Connect, are forced to compete in a business that is rapidly reinventing itself.
As this edition went to press, it is understood that Connect has finally applied for an ISP license but Vodafone has yet to make an application.
---
NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as: Vodafone Fiji US$50 million 3G upgrade...But where is the ISP license? pp 7,8, December 2005 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.
***

Yaqara Studio City developers seek F$4.5 million

Stage one of studio city to cost F$200 million. YGL seeks F$4.5 million for documentation, marketing of stage one.

by Dionisia Tabureguci

THE Yaqara Studio City project has been called many things, among them, a ‘pie in the sky’ dream that some critics believe will never happen.
With the gestation of its genesis now going into its eighth year, an overhaul in management last year and perception in some quarters that project owner, Yaqara Group Ltd (YGL), may be a cash-strapped outfit that periodically resorts to the capital markets to raise funds to survive, it may seem likely that the benefit of whatever doubt there is would go in favour of the critics. YGL had been exploring ways within the markets to help it raise parcels of the funds that it needs, an exercise that led to the listing of the company’s B class shares on the South Pacific Stock Exchange in 2005 followed by another fundraising drive via the issuance of convertible notes to an Australian company Pooled Investments Pty Ltd in the same year, with conversion obligations, scheduled to be honoured in January this year, still under negotiation between the two parties.
Its annual report for the financial year ended March 31 2006 saw it reporting an operating loss of F$1.823 million taking the total loss accumulated by the company in its seven-year life to some F$6.696 million.
This was accompanied by a note from independent auditor G. Lal + Co. on the company’s “inherent uncertainty regarding continuation as a going concern”, where, in a nutshell, the accounting company reminded members of YGL that the company’s existence was dependent upon its ability to raise enough capital to bring to reality the range of products that make up the Studio City and further from this, its ability to generate income out of it and make a profit.
Stockholders were reminded that should YGL fail to reach this stage, “it may be required to realize its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial statements”.

Some critics interpreted this extra service by the auditor as confirmation that the company was really in financial distress and that its announcement last month of yet another convertible notes issue – via a rights issue to shareholders including Pooled Investments Pty with the aim to raise up to $4.5 million and this time around, with the official support and partnership of local investment banker Kontiki Capital Ltd, which has agreed to underwrite the issue – was really to help the company keep its head above the water.
But behind the misty curtain of this project, the company’s management is unfazed and believes that with the right combination of management people, strategies, committed investors and partners plus focus and tenacity from all stakeholders, Yaqara Studio City will emerge not only to see the light of day but become a project that Fiji and the Pacific region can be proud of. And that the mere size of it – a value that the company put in today’s dollar terms to be in the vicinity of F$4-F$5 billion – would naturally mean that it would take a while for the project to be realised.
Last month (October), YGL executive chairman Mark Falzon and managing director Lyndon Driscoll held a meeting with representatives from Suva’s brokerage houses to inform them of the company’s developments and to disclose that this latest fundraising exercise is going to be the last in terms of equity input and that the money raised would be used not just to keep the company going but to help in marketing of the residential units under stage one of the project and to put together the final documents needed for stage one of the project to attract debt funding. The company said that Stage one, which is further broken down into three phases of development, consists of some 200 residential units, apartments and foreshore development as well as a Yaqara Yacht Club/Marina and Yaqara Gold Club facilities. The total cost of this stage, Falzon said, is tagged at around F$200 million, funds that the company hopes to take out as a loan from what may be a syndicate of international finance entities seeing that “I’ve got about 20 international investment groups lined up who are very excited about investing in this project”. Falzon said YGL would be using the pre-sale of its residential units as security for the loan.
But in order to secure the pre-sales, the project needs to be marketed and this is one of the areas that part of the F$4.5 million would be put into.

Mark Falzon...YGL executive chairman

“We will put that money (F$4.5 million) into producing feasibility studies, lodgement of the site plans, schematics, the visuals and the contracts as well as marketing materials required to take the project to those clients for them to see and say: ‘gee, I want to buy this unit in that lot and I want it to look like this…a 2-bedroom’. Then we get them to sign a contract, which requires them to put up, say, 10 percent of the cost of that unit and gives them the option to purchase it when it is built. Once we get these pre-sales in place, it would allow us to bring in debt funding which will then allow us to take the first project forward.” Once the F$4.5 million is raised, it may take the company up to 14 months to market and fully sell out the residential units of stage one and get the debt funding, said Falzon, and although it would only need to secure 60 percent of this pre-sale, there has been some indication that the response from the market may be a favourable one.
YGL had tested the waters last year when it released, via its residential sales and marketing company Horizon Sales and Marketing (Fiji) Ltd, 60 purchase options of its Peninsula Apartments. The option contracts were all sold within 10 weeks, according to a company announcement in September last year. As well, some Yaqara Marina berths options had been sold.
But getting Stage One to the point where physical work actually begins would be a thing of certainty once the company is able to secure the debt funding.

Seen in its entirety, appraising such a mammoth project (by Fiji terms) as the Yaqara Studio City could be a daunting task for one not used to visualising projects that has a wide array of products and not limited to the tourist business theme.
The Yaqara Studio City ‘dream’ or ‘impossible dream’, depending upon whom one is talking to, is an attempt to build a city using methods that are guided by the world’s best practices that are environmentally friendly and ecologically sensitive, said Falzon. The aim is to create a community that will live in a setting that supports a vibrant lifestyle and is sustainable. The sugar coating would be what is considered by some as the ‘world’s best tax incentives for financing audio visual productions’ as well as the tax free opportunities associated with a Studio City Zone. Yaqara Studio City has been declared such a “zone”.
With over 5,500 acres of land and foreshore to be developed and turned into what would someday become a city equipped with audio visual production facilities, hotels and premier accommodation facilities, educational institutions, sports facilities and ancillary facilities and services like the yacht club and marina and the golf club, YGL’s management is prepared to be misunderstood by the general public and respect the opinions of critics but not necessarily endorse them.

“It is about strategically unfolding this huge project in a way that makes it sustainable, that makes it realistic, that makes it work,” said Falzon. “There will always be critics but I have complete faith in Fiji’s capacity to make this a reality. It has government support, it has enormous support locally, it has international support and what encourages me more than anything is, when I travel internationally and talk to other groups, the incredible optimism, support and encouragement from visionary organizations and groups that have materialised large-scale projects all around the world. I think we have a committed board and we have a number of committed investors behind it as well as a committed government. A big project like this only happens if you bring people together and stay focussed on the vision and the outcome and you deal with each issue or each problem as it arises along the way. And there will be all sorts of issues and problems along the way. But you don’t let that stop you. You just keep going.”

---

NOTE: This article was published as a cover story in the Fiji Business Magazine (www.islandsbusiness.com) as: Yaqara Studio City: A pie in the sky? pp 3-5 November 2006 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.

CIDA’s coconut plans

Fiji’s Coconut Industry Development Authority looks at reviving the local coconut industry
Words and Pictures by Dionisia Tabureguci

AFTER being pushed to the edge of oblivion and almost falling over, Fiji’s coconut industry is ready for a comeback.
And those who are moulding the cast for this revival are doing so with big plans in mind, a sympathetic ear for critics but with a forceful resolve that the industry, far from being a sunset one, is on its way to a brighter future.
The steam that is left, it seems, is about new opportunities, a total makeover by shifting the focus to propel the industry away from traditional copra production to one where coconut farmers are involved in value added products, more specifically health foods and cosmetics.
The outfit behind this revival is the industry regulator CIDA (Coconut Industry Development Authority), an entity set up in 1998 to regulate and bring back to life what by then had become a faded economic icon.
CIDA’s chief executive officer John Teiwa, not often one to call for media attention upon the affairs of the entity, was nevertheless a little more accommodative when approached by Fiji Business to discuss the direction, if there was such a thing, of Fiji’s coconut industry.
A week before the approach, Fiji Business had been told by former politician and long time coconut planter Leo Smith, that the coco-peat factory project mooted by him and endorsed by CIDA late last year had been shelved “for reasons that are not clear to us”.

JOHN TEIWA...industry plans to be more than just copra


Smith had called for CIDA to get off what he called “its civil service mentality” and start doing something about the industry. For if nothing was done quickly, he feared for the survival of what had once been the cornerstone of the economy and the hundreds of small farmers in the outer islands who send their children to school from copra money.
Having been in the coconut business ever since he was a child, Smith was familiar and still experiences first hand the gradual decline of the coconut industry. He had raised his concern to this magazine over decision made by a growing number of plantation owners in Vanua Levu to either diversify into other crops or worse, subdivide their properties and sell them off.
Vanua Levu supplies most of the country’s copra and also hosts the milling factory. Chances were, said Smith, the new owners “don’t give a damn about coconuts”.
What followed was a significant drop in production when the trees are cut down to make way for property development.
“It’s a sunset industry if nothing is done about it,” Smith predicted.

His prognosis on this dim future is based on his argument that CIDA is not doing enough or moving fast enough to turn anything around. He himself had been a victim of this ‘inaction’ when he took his proposal to CIDA for a Fiji-first coco peat factory. Based on a “whole nut” philosophy, the plan required that CIDA gather whole nuts from farmers for 10 cents or 15 cents a nut, sell the husks to Smith and his Australian/Sri Lankan partners (coconut peat is a form of organic fertilizer derived from coconut husk fibre), then re-sell the nuts for both domestic consumption and copra production.
“After a series of meetings with them (CIDA), we are still waiting from them to get back to us on the proposal,” Smith said.
But seen against the laid out plans of CIDA, Smith’s proposal may be honourable and logical but not up to the mathematics of the regulatory authority.
Teiwa argues that Smith’s plan “just won’t work” because of the logistic and financial constraints that CIDA already faces and will face when gathering coconuts simply to sell back to Smith and his outfit for two cents a nut.
It would heavily tax an entity already burdened by lack of funds and resources. But that is not to say that nothing has been done, Teiwa argues.
At CIDA’s estimate that some 100,000 people - mostly in the rural areas - still depend on income derived from the copra industry, it would be unfair to say that nothing has been done.
A more reasonable way of looking at the coconut industry would be to look at the challenges pitched against it, which makes any effort to advance its interest equivalent to moving about in a pool of glue.

At field level according to CIDA, the greatest threat is the depleting coconut plantation as real estate booms in Vanua Levu, making it more attractive for plantation owners to sell a piece of land rather than do something about the coconuts. When in the 1950s coconut was a thriving industry capable of producing over 40,000 tonnes of copra a year, estate owners were responsible for the production of up to 60 percent of that figure, Teiwa points out.
Now, we are lucky if we can do 20,000 tonnes a year and in fact, after Cyclone Ami in 2003, CIDA’s Copra Millers of Fiji (sole producer of copra and coconut oil, the two main coconut products in Fiji) recorded a depressed output of just 9000 tonnes of copra at the end of that year.
Out of the figures of production nowadays, smallholder farmers are the ones who are producing the most.
Another weighty challenge was the lack of coordination between Fiji’s Agriculture ministry and CIDA, which made it difficult to ascertain the number of coconut trees there were on the ground, their age, their per-tree-production and whether the owners were serious about planting coconut for commercial purposes. And if they were, did they follow proper crop husbandry practices.
This challenge was partly overcome last year when all coconut related matters handled by the ministry were officially handed over to CIDA.
CIDA is now in the process of putting in place two enabling arms to help charter its course – a farm extension division to gather all relevant field information and a research and development arm to help realise the new goals that have been set in regards to developing value added products.
At field level therefore, CIDA’s retraced steps into the coconut groves now involves the careful documentation of farmers, the type of planting that they do, the areas taken up by coconut palms as well as a comprehensive replanting programme to supply seed-nuts to these farms.
Another infamous challenge faced by this industry is the decline in the prices of copra and coconut oil, an adversity now worsened by the rise in freight costs brought on by the global fuel price hike. Needless to say, this has lent credence to critics who call copra production a “sunset industry” on account of farmers moving away from it due to low returns.

Rearing nut seeds at Wainigata in Vanua Levu...THIS PHOTO WAS SUPPLIED BY CIDA.

To CIDA however, the industry is a long way away from its last breath. While copra may not be the most attractive commodity right now but there is a plan, which, in its entirety, is to shift away from that very notion that coconut planting in Fiji is all about producing copra and coconut oil.
“The industry is getting nowhere agriculturally but we do have a vision, although it will take a while to achieve it,” says Teiwa with firm resolve. “Our vision is to reinstate the coconut industry as one big business in the country and I can assure you that we will all live long enough to see the fruit of that vision.”
This optimism has its roots in the entity’s grand design. First, the CIDA of 2005 is really a reformed entity, quite unlike its 1998 self in terms of size, structure and defined goals. Second and more importantly, global development in coconut based commodities have already made a u-turn into newer products like virgin coconut oil and coconut timber and these are two commodities that a greater part of CIDA’s plan now revolve around.
Virgin coconut oil, in particular, is something of a fetish for health food lovers in more developed countries and CIDA hopes to construct a comprehensive infrastructure in place to link itself and its registered coconut farmers in time for both to ride on the bandwagon of this development and reap similar benefits that countries like Philippines and Sri Lanka are already gaining from this craze. Virgin coconut oil, sold at retail for about A$12 per 300 grams bottle, has also been put forward by some authorities as a natural wonder-drug, with a wide range of capabilities that include the prevention of heart disease, diabetes, cancer and skin protection among a host of others.
This, says Teiwa, makes virgin oil an attractive alternative right now and should be reason enough for farmers to want to get back into coconut planting.

For those that do, CIDA aims to equip them with portable virgin coconut oil mills so that they produce the oil without having to go far. “The farmers will husk the coconuts and they will end up having access to water, husk and shell. Copra Millers will eventually have no copra (its fate is yet to be decided) and CIDA will instead go to these small mills and take all the shells, water, oil and husks and then we will do the downstream processing with them and our own marketing.” Teiwa explains.
“In the end, we want to change copra trading into whole nut trading where people will talk about the industry in terms of whole nuts. Once we have the small mills established, it would then be the right time for people like Leo Smith and the kind of venture that he is proposing, to come in because the infrastructure would have been in place already. Right now, it is premature and too costly.”
LEO SMITH...sought CIDA help in establishing a coco peat factory

---

NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as Cover Story. COVER title: Coconut Revival? CIDA takes industry to new level; Cover article title: PUTTING LIFE BACK INTO COCONUTS. CIDA has big plans to revive the industry; 3-5, July 2006 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine
***

RAJ PATI KEWAL: WOMAN BEHIND THE WHEEL

She is the matriach behind Island Buses Ltd, one of Fiji's biggest biggest bus companies




Caption: Left: Westpac Banking Corporation chief manager Fiji David Evans presents Mrs Raj Pati Kewal a plaque to symbolise recognition for her service.
Photo supplied by: Westpac Banking Corporation.



by Dionisia Tabureguci

RAJ PATI Kewal is an unassuming woman. But the character that she exudes is not so ordinary. It is strong and bold; the motherly and soft caring nature is toned with steely determination that comes through when you speak to her. She smiles kindly but one cannot miss the underlying aura of finality, as if she has already analysed and made up her mind what to think of you all in one instant.
That is probably part of the people skills she has learnt after running a bus company for over twenty years and also having to manage two other companies, not to mention the amount of community work she has involved herself with over the years.
Kewal has also been the recipient of many honorary awards big and small, thelatest of which is the Westpac-sponsored Women in Business recognition of a long and outstanding contribution to women in business and the community, an award created particularly to recognize her contributions to the community.

But her little office in Rodwell Road next to the Flea Market in Suva gives away her sensitive, sentimental nature and shows one the door to her mind and heart. The wall is adorned with a large picture of her late husband Shri Krishn Kewal, who passed away in 1965, leaving his wife and five children behind. There is a picture of the newly weds before the children came. Beside the array of photos, a little corner is devoted especially to sacred images of the Lord Krishna and the Goddess Laxmi. “Prayer,” she nods solemnly, “is very important.”
Far from limiting herself to Hinduism, to which she belongs, Kewal finds it easy and has on numerous occasions attended worship and prayers of other faiths and denominations and demonstrates that as her belief that there is only one God and therefore, one people.
Little surprise then that she is so philosophical about life and her work – managing a fleet of 45 or so buses that belong to Island Buses Ltd, her late husband’s business, is no easy task and she recalls the challenges she had to face when on May 18, 1965, she got the devastating news of her husband’s death.

“I was shocked and stunned as any wife would be,” she says. “All of a sudden, I was left with our children and the business to look after.” The Kewals’ five children were still in school and the Island Buses fleet, then comprising over 70 buses and being the first bus company ever established in Fiji, was servicing many routes in Nausori and Suva.
Kewal took the difficult times in her stride and imparts a valuable lesson she learnt from it: “Always stay positive. That is very important. Positive thinking is the most important thing after hard work, sincerity and loving one another.”
Those words sink heavily in and it is easy to feel the weight of the message, coming from a woman who has largely worked and prefer to work behind the scene. “I am media shy,” she smiles. “I don’t think everyone should know what I’m doing in the community. It gives me great satisfaction and is also an important part of my life to serve the community. Our business is about ordinary people.”

Admittedly, it took some doing to get her to share her experience. The challenges she faced when her husband passed on and how she managed to go the distance alone. Women looking for inspiration could easily turn to her for a role model. In fact, at the Westpac-sponsored WIB awards, it was noted that the judges couldn’t give her an award because her accomplishments were far too many, her involvements in and with the community immeasurable in relation to the awards. The judges had to create a mention of recognition to acknowledge her and she received a standing ovation as a sign of respect and assent that credit is indeed due.
“When my husband died, there was no one to look after the business because the children were still small and my husband’s brother had his own business to run. So I took on the task,” Kewal recalls.

That move positioned her directly in the face of criticisms and disapproval as in those days, it was not the norm in the Indian culture for women to be running a business. And a bus business for that matter was just too far fetched.
“I turned these negativities into a positive thing by being determined to take on the job. The more disapproval there was, the more was my determination to work hard and show the world that women can do it. This is where it became important for me to remain and think positive about everything. It was not a very easy time. All my workers were men and it was a difficult thing for them to adjust to having a woman to report to. But in the end, we all managed to turn the business into one big family and that is still how it is today. The men have been very understanding, respectful and supportive of me and I treat them like family,” says Kewal.

Without a second thought, she had plunged into running the business and into bringing up her five children. “There was a vacuum in the decision making. The business needed someone to make decisions and that was the role that I played,” Kewal recalls. To make the business manageable, she had to sell some routes and bring down the size of the fleet. The number of employees, which had grown from when it started in 1945 to 120 in the 1960s, had to be reduced again to the now 70 odd workers that the company employs. Aside from the bus business, Kewal also had to drive the operations of Island Motor Spares, a subsidiary of Island Buses as well as Kewal Investments Ltd which manages her late husband’s and now the family’s property investments.
But juggling all that with her family commitments was not a very difficult thing for her. “Nurturing is part of the woman’s role so it was a natural thing for me to nurture my family and the business,” she says.

Thirty years on, her children are grown and have left the nest. The eldest Surjan is a chartered accountant. Her first son Viren Kewal is a business administrator, second son Raven is an automotive engineer, third son Naren is a cardiologist running his own hospital in Auckland while second daughter and youngest of the siblings Ranjni Kumari is an accountant. All are married and live abroad but the two elder boys come in frequently to help their mother with the business.
“They are very good boys. They are always here to help me,” she beams. Thirty years on too, the bus industry has changed. More bus companies have sprung up, new roads and routes have been developed and more people now travel by bus. And with those come new sets of problems including the rising cost of fuel, illegal minibuses and the bad road conditions and generally, the bus business is getting harder.
So it gets very difficult now to plan for the future, says Kewal. “I might decide to retire tomorrow and my children may take over with their own plans. For now, I am going everyday at a time as I have always done since taking on the business after my husband died.”
---
NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as: The POWER behind Island Buses: Positive thinking helps Mrs Raj Pati Kewal run a bus company, pp 9,10, January 2005 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.
****

Fiji: An economy in decline

Fuel bill hit F$1 billion in 2006, export sector dismal, central bank worries

By Dionisia Tabureguci

FIJI obviously needs a miracle if it wants to get out of an impending economic tailspin that some believe will get worse before things get anywhere near better.
Latest national economic data is showing a troubled state of affairs for a nation still entangled in internal political difficulties and facing an economic recession on the back of an expected two percent contraction this year.

Figures from the Fiji Islands Bureau of Statistics (FIBOS) released in February has shown that for the first time in seven years, possibly in Fiji’s recorded history, fuel bill has passed the F$1 billion mark within a year last year, with the surge driven by steep increases in aviation turbine fuel and industrial distillate fuel. Despite generally good performances by fuel re-exports, other economic signs like the perceived lack of activities to stimulate exportable commodities, the fast-depleting foreign exchange reserves weathered by declining export earnings against escalating import costs, have posed worrying implications, adding more strain to the country’s ability to sustain investment needs and remain competitive in the global
market.

FIBOS 2006 provisional trade statistics on overseas merchandise shows Fiji’s total import bill was F$3.1199 billion, of which mineral products contributed 33.4 percent, or F$1.042 billion. Domestic exports put together was only F$807.9 million, not enough to pay for fuel bill alone, and total exports at F$1.1752 billion implies a national spending of 88 percent of export earnings – or 88 cents in an export dollar earned – only to pay for fuel bill.

FIBOS data over the last seven years have shown Fiji’s balance of payment increasing as a result of the country’s mineral fuel costs and overall increases in other costs, made worse by the dismal export performance.
The state of urgency - pushed closer to the edge as donor agencies suspend aid to pressure the interim regime to return the country back to democratic elections within the next two years – has prompted Fiji’s central bank to again ring warning bells.
“The rise in the price of oil has come at the worst possible time,” said Reserve Bank of Fiji governor Savenaca Narube in a social event early this year.
“Our oil imports are four times what we used to pay some six years ago. The balance of payment therefore continues to come under pressure. Reviving export is the key.”
Last month, RBF’s plea for lasting solution came with a more sombre overtone, with Narube urging the nation that “tinkering at the margin will not work for us any longer.”
“To me, the key economic challenge that we face is to correct our widening trade imbalance. Our exports continue to be dismal. Sugar is earning $100 million less than its peak year. Garment has lost even more than that. Gold production has now disappeared and that’s another $60 million. Tourism numbers and yields have now dropped. Oil price remains at around US$60 a barrel. The trade deficit continues to widen.”

Obviously running out of short-term policy measures within its mandate to hold the fort in a crumbling national economy, the Reserve Bank has flatly admitted that export performance has not responded and this, it added, is now putting undue strain on Fiji’s external financial position, the protection of which comes under the bank’s supervisory role.
“In December last year, we had to introduce a ceiling on private sector credit. We also reduced the delegated limits given to foreign exchange dealers on selected overseas transactions. Recently, we announced changes to borrowing guidelines for non-residents individuals and companies. There have been some concerns on higher interest rates particularly from individual borrowers and investors. We understand these concerns. But again we ask that you appreciate the seriousness of our financial situation. When things are tough, we must safeguard the bigger picture. We cannot be reactionary. If we do not take care of the bigger picture, the small picture will suffer even a lot more than what we are facing now,” Narube
said.

Donor agencies have also noted Fiji’s dismal economic outlook in their recently released flagship publications.
The Asian Development Bank identified in its ADO 2007 that Fiji’s broader challenge now “is to encourage private investment and export development that, together, generates faster, sustained economic expansion that is compatible with external balance.” The challenges were also noted by the United Nations Economic and Social Commission for Asia and the Pacific(UNESCAP) in its annual survey report, titled” Surging Ahead in Uncertain Times”.

While Fiji’s economic challenges as such are now widely acknowledged, the country is now faced with a choice of either actively invigorating its export sectors or go down the road to an economic and social meltdown. For its part, the interim government has modified a few national blueprints from the Laisenia Qarase–led government, including the 2007 national budget. For the short term, it has put in place measures to stabilize government finances by cutting down on operational costs while offshore borrowing is on the cards as a short-term measure to address the balance of payment crisis.
For the medium term, it has revised the focus areas in the Qarase government’s National Export Strategy from 13 to six, where the focus now is on stimulating Forestry, Agro-business, Marine Products, Audio-Visual, Information and Communications Technology and Mineral Water.
Getting things started however has been Fiji’s weak point ever since RBFbegan tolling the warning bells over seven years ago.

---
NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as: "Economic tailspin? Miracle needed to halt impending decline", pp 7,8, May 2007 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.

****

Local three eye Emperor’s Qalibua tenement

Viti Mining Ltd, a new company, wants to start a gold mine in Tuvatu


By Dionisia Tabureguci

A locally owned and Fiji-registered company is seeking to secure an exploration and mining lease to start a mine in a gold exploration tenement currently held by Emperor Gold Mines Ltd.
Viti Mining Limited, launched last month by its owners merchant banker John Sanday, administrator and manager Ratu Timoci Tavanavanua and surveyor/land development consultant Michael Whippy, also announced plans to be involved in the mining of precious and metalliferous metals in Fiji and the South Pacific islands.

“VML has already submitted three applications to the Mineral Resources Department (MRD). Of the three, two are for exploration leases and one is for mining lease. We have an intention to develop a gold mining operation in one of the prospects we have applied for,” said Sanday, who is also CEO and chairman of the company.
“Subject to approval processes, the directors of VML are confident of building a mining business and should have the mine up and running within 18 months of approval of the mining lease application from MRD.”

VML has plans to initially raise F$10 million via a combination of private placements of its shares, a possible listing, and loans from bullion financiers. Should MRD grant it a lease to explore and mine the Qalibua tenement, which is currently held by Emperor and located within its Tuvatu portfolio of exploration tenements in Nadi, Sanday estimates gold production to be in the vicinity of 15,000 to 20,000 ounces annually and jobs created over time to reach around 200. This would make VML’s mining project a small scale mining operation.

The application to MRD however is not expected to be an easy ride and the project is not without sceptics from within the mining industry itself. Those familiar with the industry and with Emperor’s Tuvatu tenements believe operating a small-scale mine in Tuvatu would be a difficult and non-profitable undertaking, as a small-scale operation would have to be using either an open pit or alluvial mining method, both of which are said to be unsuitable at Tuvatu’s rugged terrain.
As well, a trial mining was approved by MRD in the mid-1990s to consolidate, among other things, the physical attributes of the ore bodies in relation to mining that could not be totally confirmed by drilling interpretation.

According to sources, this exercise determined that a Vatukoula-style underground mining method in Tuvatu could not be applied due to poor ground stability conditions. Also, the terrain and depth of the ore body ruled out the use of open-pit method.
Although a lesser-known prospecting tenement in Emperor’s portfolio, Qalibua, which is located between the Tuvatu and Tuvatu North resource areas, was identified by Emperor in its 2000 and 2002 annual reports as one of the three out of the ten resource areas identified which had “high gold prospects”.

Since acquiring Tuvatu from Geopacific Ltd in 1997, Emperor had spent over A$20 million exploring its three tenements there and almost sold the entire prospect in 2005. The fact that Qalibua is still one of Emperor’s tenements means that VML’s application will be subject to certain conditions and that there is a possibility the company may not be given a lease over Qalibua.
Sanday, aware of the sceptics and MRD’s issuance processes, remained optimistic about VML’s success in getting the license to work Qalibua. “The question will come down to....‘who, at law, has a legal claim over Qalibua?’ Emperor's permit has expired, Westech has not started the application process, the tenement remains vacant and along comes VML and seizes an opportunity. Is it wrong for us to make an honest and legal attempt to peg it? Using our savings to do so? Or should we be good and humble locals always waiting for someone else to come and take the lease?” VML had already paid F$100,000 in application fees, which Sanday said came from the three directors’ personal savings.
“It is our firm view that there needs to be more local presence in the mining industry. It is one thing to criticise and condemn foreign companies having presence in the industry, it is another to put your money where your mouth is, jump into the field and play the game according to the rules. We recall the criticisms foreign banks have been receiving lately; it is easy to criticise! The mining playground in Fiji is open to everybody and the rules apply to everyone, foreign and local alike. We prefer to be players in the field rather than spectators commenting from the sidelines,” he said.

As for the availability of the Qalibua, MRD director Ifereimi Dau confirmed to Fiji Business magazine that the tenement is closed “meaning that anyone is free to apply for it, hence the Viti Mining Ltd application”.
“The application by VML will be checked and any ground allocated previously (but not yet granted) by another company will be removed from their area. This is because the industry operates on a first come, first serve basis,” said Dau. “Current policy dictates that any SPL holder will be given the first chance of its application to be processed for mining. Ground can only be applied for if it becomes available, that is, there is no company over that piece of ground. Applications by other parties for grounds currently held by any licensee will be declined,” he added.
Sanday said VML’s intention to start a mine is to produce raw gold and export it to a Papua New Guinea’s Metals Refinery Operations Ltd (MRO) using the MSG trade agreements platform. MRO is managed by Melanesian Metals Corporation Ltd (MMC), upon which Sanday serves as a board director. MMC is involved in gold production, fine bullion and jewellery manufacturing. In the event that VML gets the Qalibua lease, begins mining and starts production, it will use its PNG connection to help it diversify into making jewelleries using Fijian cultural designs.
Sanday said VML is also mindful of landowners of the tenements and have included them in the company’s business model.
“We view them as partners to the business and have structures available in our business model for their inclusion as active participants and not passive spectators. In that light, we call on landowners who have minerals and petroleum potential in their lands to come and talk to us about it.”
VML’s applications are for exploration lease and mining lease in Qalibua as well as an exploration license in Drumasi in Tavua.

--

NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as: Local three eye Emperor's Qalibua tenement, pp 6,7, May 2007 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.

****

A diary: Crab catching on a F$3 million island

A day on Yasalaga Islet,
Nadi,
Fiji Islands.

Words and Pictures by Dionisia Tabureguci


Caption: "John the Cannibal" holds out a mud crab we caught that day!


Sunday August 7, 2005

YASALAGA is a tiny island flanking multimillion-dollar Denarau in Nadi, Fiji’s Gold-Coast-in-the-making. We didn’t need to get to this islet on a boat, much to my surprise. It used to be an island before that area was reclaimed and the thing that strikes us most about it is how different it is from its hotshot neighbour. There are no golf greens, no cultured turfs, no well-manicured lawns. The landscape is unplanned, the dwellings are as close to nature as dwellings could be. Even this sun-filled slow Sunday morning feels different here than 100 meters away. If this place ever gets chalked into a list of choice for different experiences, Yasalaga is ideal for just lazing around coconut groves, watching tiny ripples in the river and not caring at all what time of the day it is. Its very naturalness is what puts us instantly at ease. One could easily understand why someone would want to pay F$3 million for this piece of paradise, an offer that was made not long before our visit. We are here to catch mud crabs, not buy the island and the truth is, even if we could afford it, John the Cannibal will not sell it. “This island has been in my family for generations and I promised my father that I won’t sell it so it’s not for sale,” his eyes lights up as he sweetly smiles afterwards when we are savouring our prized catch.
‘John the Cannibal’ is a trade name for this Nadi native who is also of Indo-Fijian extraction. With the help of his good friend Captain Paul McCulloch from Robinson Crusoe island (that is a champion backpacking story), John had started what he calls the “3hr Crab and Culture Tour” and it is this tour that we are here to try out today. The cost: $150 per person. The experience: it depends on the expectation. We have come with none. John is somewhere in the bure which is also home to his wife and two children and as we wait for him to take us on his “jungle cruise”, I savour the quiet peacefulness of the island, thinking how easy it can be for one to simply slip in between the moments of time and be happily lost forever.
Finally, Capt. Paul – he drops in now and then to see his friend - nods over to the bure to indicate that John the Cannibal is ready. We all turn to look. The attire catches my eye.
One could be forgiven for thinking that our host might have forgotten to get himself Westernised.
I get this queasy feeling thinking that either he has stepped out of the history books or we all have made a quantum jump to the past.

JOHN the Cannibal confidently looks us over. He is wearing a thick brown grass skirt with a cloth of tapa-design around his waist. The strip of cloth and grass skirt are held together by a coil of magimagi, fastened by two cowry shells. Around his ankles and upper arms are grass strapping that complement the boar’s tusk that hang around his neck.
His face is set in stone as he frowns from beneath his midnight-black Afro hair, his generously oiled dark brown skin shimmering in the sun. With one swoop, he lugs a Fijian war-club over his shoulder and just when you begin to wonder if he is also going to use it, he breaks into a smile and warmly greets us with a hearty “Bula!”. “Welcome to Yasalaga,” he booms, then proceeds to usher us into a small open bure.
John goes through this process every Wednesday, Friday and Sunday if he has visitors for the tour. “The Fiji Backpackers Association have used him quite a lot,” Capt Paul explains. The guests are first taken through a short “yaqona” (kava) ritual, in which John formally welcomes them to the island. It takes our six-member group only a few minutes to “feel welcomed”. A bowl each of that tribal concoction and we are all chatty, all loosened up.
“This is Junior Cannibal,” John gestures towards his seven-year-old son who is wearing a less elaborate matching costume. We laugh at the pun. “What we are showing you here is the yaqona ceremony which our forefathers performed to welcome visitors,” John says after a moment to smile at Junior Cannibal. “We are now performing it to welcome you to our shores.”
The visitors grunt in approval.

AFTER the ceremony, my two friends and I join Hitoshi, Takako and Yuka to check out the compound and follow John to the plantation. We are going to pull out a few sticks of cassava for the lovo (earth oven, traditionally used by Fijians to cook food – still used today). Inside the bure, John’s wife and niece have already prepared the chicken, fish and dalo (taro) for the lovo and we brought in the cassava to add to the feast. I am keeping an open mind. It may feel all too simple but this is the very reasoning behind the tour, which is for visitors to understand how things were done in the olden days where life was simple and agrarian based. In a way, John the Cannibal is still living a life in which the Fijian has not changed very much.
At the lovo pit, the fire is raging, heating up stones to be used to cook the food buried in earth. We sit around near the pit while John explains his way through the process. But much of our attention is focused on the fish. Clearly, the poor creatures are a delicacy not just in Fiji. The Japanese also savours them.

IT’S almost noon and we finally step onto the Tabu Tabu Soro, John’s catamaran, which had he bought from the Fiji museum and then modified for this purpose.
The highlight of the tour is just beginning. We are going to catch some crabs! I’ve done this before and today in Yasalaga, I look forward to fixing up a crab trap myself.
To quench our thirst, John brings on board a few cans of cold beer and soft drinks. Then he makes his way to the aft and grabs hold of a pole to steer the vessel while Tui, his assistant, is in the front to guide us to the traps. My expectation is a little too high. “We prepared and set the traps early this morning,” John informs us, dashing my hope of fiddling around with the bait. “We put in the traps when the tide came in so when tide comes out again, the crabs come down to eat and that is when we hope to catch them.” The tide is on its way out right now. John points upstream to the blob of Styrofoam, which marks a trap. “Let’s go there and check that one.” We all gasp as Tui pulls up the trap. Less than ten minutes after we left the dock, we are pulling up seven crab traps onto the boat, each clearly carrying a good-sized prize, teasing our empty stomachs. Each time a trap is hauled on board, the Japanese women squeal in delight. John carefully picks a crab from inside the wire contraptions and holds out a thin wooden pick. “I am just going to push this here…” he strikes the instrument straight through the middle of the crab’s body, a little too suddenly, launching the critter into a painful convulsion while we are momentarily lobotomised.

“THIS will kill the crab and make it safe for you to hold it,” John explains the wooden pick trick. Not being an avid crustacean feeder myself, I wonder at that moment if I should be taking part in this practise of killing and then eating crabs. Takako’s remark rings in my ear. “Oh,” she exclaims, “I feel sorry but I want to eat it.” My friend, with his smattering of Japanese, looks at the crabs with an evil glint in his eyes: “Onako pekopeko,” he says to Takako. “It’s Japanese for: ‘I’m very hungry’,” he explains when he sees my puzzled expression.
That settles it. The crab is going to the pot and I am going to partake in this meal.
Caption: Our new Japanese friends Hitoshi, Takako and Yuka totally enjoyed their crab feast!

MUCH can be said about Yasalaga and its crab tour that one has not seen in a typical tourist brochure. This must not be mistaken as a trekking adventure or sightseeing cruise where the visitor gets to enjoy Fiji’s natural beauty. Guided by John the Cannibal, the excursion for me was pretty much a do-it-yourself getting back to simple living exercise. We helped uproot our own crops, we watched the food being prepared, we took to the river for the crabs and got back in time for the lovo to cook. That was as simple as how the old world was lived. By the time lunch was served, we were all citizens of the island, merrily blending two worlds with the clinking of champagne glasses over the firm flesh of mud crabs and lovo feast and an enterprising native by the name of John the Cannibal standing by and watching us display our ravenous appetites.
By the time they sang ‘Isa Lei’, no one was really in the mood to leave.


Caption: John sings "Isa Lei", the Fijian song of farewell

NOTE: This article was published as: "Crab Catching" in Islands, the Complimentary Inflight Magazine for Air Pacific, Fiji's national airline; pp 24-35, Volume 1, 2006 edition. 

Islands is a publication in the Islands Business International portfolio.

*******

Study complete on third longest barrier reef in the world

WWF Pacific releases Great Sea Reef survey report

Photo Caption: Divers counting fish in the GSR. Photo supplied by WWF Pacific's Suva office.


By Dionisia Tabureguci

FIJI’s marine scientists have, for the first time, surveyed and documented the marine ecosystem of Fiji’s Great Sea Reef (GSR), the third longest continuous barrier reef system in the world and which is said to stretch a distance of some 150 kilometres along the Northern tip of Vanua Levu, Fiji’s second largest island.
The exercise, which culminated into the launch last month of its report titled: “Fiji’s Great Sea Reef – The First Marine Biodiversity Survey of Cakaulevu and Associated Coastal Habits”, has also provided new insights into the previously lesser understood marine life in the reef system and re-emphasised the need to document Fiji’s relatively unknown marine and reef systems.
With funding support from Vodafone Fiji Foundation, the project was administered by the Worldwide Fund For Nature’s Fiji Country Programme (WWF FCP) and also financially and technically supported by a number of organizations including the University of the South Pacific’s Institute of Applied Sciences, the Packard Foundation and the MacArthur Foundation.
“This survey is the first ever systematic effort to document the marine biodiversity of this reef, locally known as Cakaulevu,” said WWF FCP in a statement. “Findings of the survey include the GSR having 55 percent of the known coral reef fish in Fiji, 74 percent of the known coral species in Fiji, 40 percent of all known marine flora in Fiji and 44 percent of Fiji’s endemic reef species.” The 12-day survey expedition was carried out in December 2004 and sets the pace for efforts to document the Fiji Islands Marine Ecoregion (FIME), which experts say remains largely unknown, and which is also being streamlined in an accompanying report titled: “Setting Priorities for Marine Conservation in the Fiji Islands Marine Ecoregion”, also launched last month.
FIME, according to WWF FCP, is “one of the 16 natural jewels of outstanding biodiversity found in the Pacific, comprise about 844 islands and islets with over 10,000 square kilometres of reef and strewn across 1.20 million kilometres of oceans.” The little that is known about this ecoregion has meant that conservation efforts remain a scientifically ill-informed exercise, a situation that inspired a meeting in December 2003 of over 80 scientists, community members, non government organization representatives and government administrators and decision makers who shared current scientific information on the biodiversity of and threats to the country’s marine environment.
One of the important outcomes of that meeting, as elaborated upon in the report, was the identification of “35 priority conservation areas, which try to capture the full range of marine biodiversity, species and communities that make FIME unique”, and whose conservation would “contribute to maintaining the integrity of Fiji’s marine systems.”
Of these, five areas were ranked to be globally important due to their uniqueness, endemism and high level of diversity; 15 areas were considered to be of national importance and 15 of sub-regional importance. The five areas of global importance are the GSR, which is located in Vanua Levu, the Lomaiviti Triangle (Vatuira Channel-Ovalau-Makogai-Wakaya Channel), Namenalala, Southern Lau Group and Rotuma.
In anticipation of it being a costly exercise, the documenting of all 35 areas has been portioned to prioritise the five areas of global importance, according to WWF FCP manager Kesaia Tabunakawai. Of the five areas of global importance, the GSR is on the top of the list, being the “third longest barrier reef in the world, with an exceptional level of endemism and intact systems of lagoons, channels, mangroves and seagrass habitats.” Photo Caption: A clownfish protected by its host, the anemone. Photo by Baravi Thaman, Scientific Survey Team. Supplied by WWF Pacific's Suva office.

“The study (of GSR) is a step forward in understanding our resources and what we have so that we can better plan and manage them,” said Tabunakawai. “It has also helped in decisions making for organizations that work in the areas of conservation or environmental concerns because we now have an idea of what is there.”
Scientists surveyed 23 sites over six major habitats and made some significant findings, including the discovery of new species of a coral and a fish, the importance of the reef as home to a diverse species of marine life as well as breeding ground for some and as home to some endangered marine life. The scientists also noted that aside from the marine biodiversity and conservation status of the GSR being poorly understood, it was also “increasingly threatened by burgeoning human populations, associated industrial and coastal development, and the rising international and local demand for tropical reef products.”
A WWF FCP’s March/April 2006 socio economic survey in Dreketi, Macuata, Sasa and Mali disctricts – part of the EBM initiative – showed that 100 percent of households earn income from their natural resources (marine, freshwater, forest and agriculture). Of these households, 75 percent depend on these natural resource harvests as their main source of income. “Local community residents of these districts traditionally fish two thirds of the Vanua Levu portion of the GSR. The reef is therefore a major part of living their life and sourcing their livelihood,” WWF FCP said.
To the end that this human factor is managed and that the GSR system is protected, the findings of the GSR survey will provide part of the building block to an Ecosystem Based Management (EBM) initiative, a partnership between Wildlife Conservation Society (WCS) as the lead partner, WWF FCP, Wetlands International – Oceania (WI-O), USP and in association with the Fiji Locally Managed Marine Areas (FLMMA).
“The EBM area extends from Macuata through the Bua Peninsula to Kubulau. Its aim is to protect the marine environment by addressing land-based threats to coral reefs and other marine habitats.” said WWF FCP.


SOME DETERMINATIONS OF THE GREAT SEA REEF SURVEY:

➢ Populations of 12 species listed on the 2004 IUCN (World Conservation Union) Red List of Threatened Species, including 10 species of fish, the IUCN threatened green turtle and the spinner dolphin;
➢ Population of the nationally endangered species of Bumphead Parrotfish (Kalia), previously presumed locally extinct; one new species and one presumed new record, previously known from the Indian Ocean, 44 percent of endemic coral fish species were observed;
➢ Within the hard corals, 43 new records were documented for Fiji. Of these, two were new genera, and three are believed to be geographic range extensions;
➢ Sixteen species were found to be new additions to the flora of the Fiji archipelago. Two possible new species were also recorded;
➢ Unusual distant offshore mangrove island fringing reef habitats were found to be of surprisingly high diversity and productivity. These highly dynamic, tidally influenced systems are considered to be “keystone habitats” of crucial importance to maintaining the ecological integrity of the entire coastline;
➢ Overall, commercially important fish were found to be in low numbers and small sizes. Fish important to local subsistence were found in higher numbers, but this varied greatly from site to site. Fishing pressure, as indicated by discarded fishing lines, was greatest around the vicinity of Labasa.


NOTE: This article was published as "Fiji's Great Sea Reef: What's really there" in Islands, the Complimentary Inflight Magazine for Air Pacific, Fiji's national airline; pp 60-65, Volume 2, 2007 edition.

Islands is a publication in the Islands Business International portfolio (see: www.islandsbusiness.com).

UNESCAP forecast "robust" growth for Pacific

UNESCAP launches 2007 flagship publication


By Dionisia Tabureguci

IN the face of an expected slowing of US economy in 2007 nudging Asia into what has been described as “uncertain times”, Pacific Island economies are forecast to experience “robust growth”, according to the 2007 Economic and Social Survey of Asia and the Pacific, the flagship publication of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).
In a worldwide launch of the survey report, titled: Surging Ahead in Uncertain Times, UNESCAP executive secretary Kim Hak-Su said although Asia and Pacific nations were rapidly emerging as engines of global growth, there were key questions.
“What will drive our growth if the U.S economy slows down in 2007? Ten years after the Asian economic crisis, is the region once again becoming more vulnerable to shocks? Has the region learnt to live with high oil prices? What kinds of opportunity and challenges does China present to trading nations in Asia and the Pacific? How do central Asian countries cope with the appreciation of their currencies in the face of rising oil prices?”
While indeed growth will be robust for PICs in 2007, they lag behind their Asian peers, most of whom have long instituted economic and structural reforms and policies on good governance, transparency and accountability.
The report estimates Pacific’s average growth at 3.7 percent in 2007, on par with last year’s 3.8 percent. Although considered robust by UNESCAP, the growth is not enough to push forward the standard of living of Pacific islanders.
“Much higher levels of economic growth are required if Pacific island countries are to raise their living standards significantly in the face of rapid population growth,” said Herve Beaver, head of UNESCAP Pacific Operations Centre.
“For the future, there remain many big challenges that Pacific islands have to meet. The poor investment climate in many Pacific island countries is depriving them of much needed investment to sustain higher economic growth. Limited scope for export diversification and poor infrastructure continues to be a problem in many countries,” Beaver said.
The report identified internal challenges faced by PICs as poor investment climate, maintaining political stability, limited scope for export diversification and poor infrastructure.
External challenges, of which PICs had little control, were noted as being geographical isolation, trade liberalization and higher oil prices.
The prevailing high oil prices, although expected to ease in 2007 as global economy slows, has posed and will continue to pose considerable challenges for policymakers in Pacific island countries, with only PNG expected to benefit from the windfall, it being the sole producer and refiner of oil in the Pacific region.
“For other Pacific island countries, high oil prices have reduced their terms of trade and led to the deterioration of their trade balances and current accounts. The 250 percent rise in the price of West Texas Intermediate petroleum has translated into sharply higher import bills and to higher costs for businesses and consumers, thereby reducing incomes and stoking inflationary pressures. And the cost of international air travel is rising just as tourism was beginning to improve in several Pacific countries,” the report said.
The report noted that PICs had implemented various policy measures in order to manage shocks from this cost but for most, the option of exploring and developing alternative renewable energy sources is the only logical one to take in order to ensure sustainable and less costly energy supply in the long term.
In terms of social challenges, the report identified the rapid rate of urbanization and subsequent rise in unemployment due to lack of economic activities as root cause of what has been perceived as increasing urban poverty in the region.
To manage this, the report suggested that PICs developing countries “develop a clearer vision of how they want their urban development to go in the future, how they might get there and who will be responsible for the different tasks.”
“Policies aimed at poverty reduction could first aim at rehabilitating those in dire danger of losing their lives due to extreme poverty – and second at providing sustainable income generating opportunities,” it said.
In a special study it also carried out as part of this report, UNESCAP research showed that the Asia-Pacific region loses US$42 to US$47 billion a year due to restrictions on women’s access to education and another US$16 to US$30 billion a year because of gender gaps in education.
It is not clear how much of these figures may be attributed to the Pacific because of lack of reliable statistics.


NOTE: This article was published in the Islands Business Magazine (www.islandsbusiness.com) as article titled: ROBUST GROWTH FOR THE ISLANDS, p.52, May 2007 edition.