barry whiteside : financial inclusion developments and challenges in fiji keynote address by mr barry whiteside, governor of the reserve bank of fiji, at the national financial inclusion strategy workshop, suva, 13 november 2015. * * * salutations : distinguished guests ; national financial inclusion taskforce and working group members ; colleagues and fellow stakeholders in financial inclusion ; ladies and gentlemen. bula vinaka and a very warm welcome to you all. introduction : it was six years ago, nearly to this very day, when we held our first ever workshop at the novotel lami to determine our future in financial inclusion in our country. this was the start of what has been an incredible journey of taking financial services and financial literacy to the underserved of fiji and providing them that necessary hand - up needed to lift themselves out of poverty and continuing hardship. this was and still is the ultimate goal of financial inclusion worldwide ; a goal that has been taken up by many countries targeting the almost 2 billion people across the globe that remain unbanked. but we have also come to realise that financial inclusion is a key driver for economic growth. the whole world recognises that it is difficult to pursue economic growth if a large sector of our society is financially excluded from active participation in the economy. hence we have seen massive worldwide support in this area over the last five or six years. the fact that many of the institutions driving financial inclusion initiatives are central banks and ministries of finance in their respective countries is truly a clear indication of its importance and recognition. we in fiji, i am really glad to say, are no different. with the completion of our initial 5 - year financial inclusion strategic plan in 2014 we are now at our first major crossroads, needing to set ourselves new goals and new pathways forward. so let me say how delighted i am to be here this morning to say a few words about our journey so far, and also elaborate a little and stir your minds into some possibilities on the way forward. i am confident that through our collaboration and sharing at this workshop today, we will be able to “ hammer ” out together a new strategy to take this journey to a new level, extending the boundaries and improving the livelihoods of our most vulnerable communities. overview of our financial inclusion journey since the first workshop dear friends and colleagues, a number of us sitting here today were a part of our first workshop back in november, 2009. at that workshop, we had agreed to a home - grown structure, a financial inclusion model

auditors have advised us that under this new accounting classification, we do not have to take the unrealized losses to the profit and loss statement of the bank. very recently, we therefore decided to liquidate all of our bond holdings. we will then reclassify the new bonds that we are going to buy under the new classification. this example shows some of the issues around reserve management and the allocation of assets. as i have said, we have a benchmark which is anchored on the maintenance of value of our foreign reserves. we have liquidity guidelines. the question that is normally posed is : what about return? this becomes more critical when reserves are falling as what is happening in fiji now. the temptation is perhaps to abandon your benchmark in search for higher return. to me this is a dangerous road to take. you may end up in a win - win situation. but you may also end up in a loose - loose situation too! my risk - averse nature as a central banker compels me to keep to our benchmark and protect values then look for return in the better allocation of assets. this workshop addresses many of these asset allocation issues and i am certain will add value to how we manage our foreign reserves. the contents of your workshop are relevant and interesting. i know that you will have an interesting 5 days. we may have different levels when it comes to reserve management methods and capacities. therefore, please freely share your country experience during the course of the workshop and in the case studies. i find that this sharing is one of the best parts of what we take home after such workshop. and please keep your network intact after the workshop so you may be able to help your colleagues in some way. there is also the related issue of how important is the central bank ’ s profits. reserve management is the major source of our revenue. while we predominantly spend this revenue on the important role of monetary policy and financial stability, i am of the view that we cannot totally ignore the strength of our balance sheets. not so much from the point of view of funding the government budget, but more so from the confidence that a strong balance sheet gives to the financial system. conclusion i wish you all a fruitful week of discussions and deliberations. please also take some time away from your workshop to enjoy suva. once again, i thank the imf, the resource persons and the organizers for putting together this workshop. official opening i have much pleasure in declaring this workshop