$ 1. 8 billion at the end of last year, sufficient to cover 4. 9 months of retained imports of goods and non - factor services. ladies and gentleman, what is in store for us in 2014? pre - 2014 national budget forecast for growth in 2014 was 3. 0 percent. however, given the significant increase in government expenditure on infrastructure, wages and salaries and social benefits such as free education as announced in the 2014 national budget, growth is now forecast to surpass the projection and is currently being reviewed. additionally, the surge in consumption and investment spending is expected to continue and can even be further boosted by the increased disposable income. confidence in the economy is expected to remain strong and is supported by sentiments expressed by retailers and businesses in rbf ’ s business expectations and retail sales surveys which suggests a positive outlook for consumption and investment activity in 2014. macroeconomic fundamentals are poised to remain strong and conducive to growth in business in 2014. a growing economy should therefore augur well for the micro, small, and medium enterprises. 2. importance of the micro, small & medium enterprises ( msmes ) to the economy we all recognise that micro, small and medium enterprises ( msmes ) play a vital role in economic development. they are an important engine of economic growth not only for less developed economies but also the advanced nations. i am sure you all know why msmes are important. i will therefore re - iterate these factors briefly : • it raises economic growth : in developing countries in asia, smes make up the bulk of their economies, some as high as 60 percent of gdp. in fiji, there are bis central bankers ’ speeches approximately 4, 200 registered msmes, mainly in the agriculture, fishing, manufacturing and retailing and tourism sectors. it is estimated that the msmes sector accounted for almost 12 percent of our gdp in 2013 valued at around $ 800 million. however, total outstanding borrowing by this sector from the commercial banks was $ 316 million as at the end of 2013 or just above 8 percent of the total loans portfolio. this shows that this sector is still largely untapped and there is a lot of potential to develop a strong msme sector as this leads to job creation, empowering individuals, increase exports and investments and in turn economic activity. • it raises exports / investment : small businesses do not always stay small ; they grow. many of our now large companies like tappoos, motibhais, hot

the impact of exit policies in advance economy which will differ in term of speed and magnitude, depending on each country ’ s specific economic character. given this, a faulty exit strategy of the advanced economies could easily spill over into smaller economies, swamping our efforts to deal with the slowdown. managing an exit from the current policy settings as growth recovers poses another test for emeap central banks to that hard - won credibility. with inflation in the process of bottoming out and the recent data flow in emeap countries suggesting a clear recovery in economic activity, we all find ourselves pondering the risk that the economic stimulus provided by fiscal and monetary policy makers might be withdrawn earlier compared to advance economy. in this regard, i believe that monetary policy credibility is particularly crucial to the countries ’ growth risk premium, which is judged by historical inflation volatilities. for some countries, given the inflation volatilities are historically high, a more pre - emptive monetary policy response is warranted in order to anchor inflation expectations. provided that improving balance of payment positions, for countries which historically have strong pass - through from exchange rate changes to inflation expectations such as in indonesia, stronger exchange rates will also be important to keep inflation expectations well - anchored without necessitating to aggressively increase interest rates and hurting the growth recovery. in other words, a strong exchange rate can serve as an effective anchor to inflation expectations. this will be important throughout as higher global commodity prices in 2010 could begin to translate into higher inflation expectations. finally, every country has a stake in the sequencing and magnitude of the strategies of the large economies. the impact of global exit on smaller economies could manifest in a return of recessionary tendencies as well as balance of payments ( bop ) problems, which have generally not been a significant feature so far. imf programs have conventionally been oriented to dealing with bop crises. in the current scenario, the larger resource base may have to be deployed with much more flexibility to help particularly smaller economies to deal with the potentially recessionary impact of exit — a kind of global macroeconomic safety net. some operating guidelines for such a program need to be quickly developed. thank you.