, and lower duties. the fiji electricity authority has a renewable energy development program which aims to provide 90 percent of energy through renewable sources by 2011. currently, around 60 to 70 percent of fea ’ s annual electricity output is generated by renewable energy sources. the ongoing nadarivatu hydro project, when completed, should add 41. 7 mega watts of power to the national power grid and produce around 100 million units of electricity on a yearly basis. on its part, the rbf has recently introduced an import substitution facility to try to assist large scale commercial agricultural businesses to obtain credit at concessional rates of interest. the rbf has also offered a scholarship for chef training in malaysia which should encourage the use of local foods in preparation of hotel menus. this is targeted at reducing our import bill and improving our balance of payments position, as well as encouraging local value adding. i wish to repeat my message once again to the hotel industry. please do everything in your power to reduce your consumption of imports. this will go a long way in assisting our bop. i wish to congratulate those hotels which have taken the effort to start growing their own fruits and vegetables. this is very encouraging indeed. as a result of the trend of declining exports and rising imports, the country has been faced with a deteriorating trade deficit and an associated current account deficit which reached a new high recently. the current account deficit is estimated at around 9 percent of gdp in 2009. a 9 percent current account deficit is unsustainable. therefore, we have to do everything in our power to increase export earnings and reduce imports. tourism has picked up well following the global downturn. in my view, under the current circumstances, tourism holds the greatest potential to lift fiji ’ s growth rate. the tourism development plan has set a target of 1 million visitors by 2016. we should aim to raise visitor arrivals threefold in the next three years. the industry and the government should develop clear strategies to make this happen. it is very encouraging to see three new airlines have started operations to fiji since december 2009, with our own air pacific adding hong kong to its list of destinations. this has linked fiji to new markets and should boost future visitor arrivals. let me now touch briefly on government finances. fiji has experienced chronic budget deficits over the past two decades. the proportion of capital expenditure to total government expenditure has been low. on the other hand, operating expenditure has continued to balloon over the years. in 2009, the proportion of

are making further refinements to their local borrowing under an integrated development project. we do not want to inconvenience projects that had already started when we implemented the policy at the beginning of this year. if your company can convince us that your project had substantially started before that, we will add your project to our so called “ exempted list ” which would allow non - resident individuals buying your properties to borrow even more locally. details of these relaxations will be announced shortly. these relaxations are positive signs. i would like to count them as proactive moves. they are intended to signal that we should focus on what lies ahead of us. i am sure that these relaxations will provide much needed impetus to private sector investment. on this front, let me take the opportunity to again say that the credit ceiling is not constraining investment in this country. if a commercial bank wants to lend to your business for investment purposes, all it has to do is apply to us and we will give our approval in a very short period of time generally within two days. moreover, the credit ceiling has allowed us to raise liquidity which has reduced interest rates. interest rates are generally were they were back in 2005. so again interest rates are not constraining investments. global prices the whole world is reeling from high food and fuel prices. these prices may stay with us for some time although some easing of food prices is expected toward the end of this year. but it ’ s anybody ’ s guess where the fuel prices may end up at! for fiji, this has come a very vulnerable time when the economy is recovering from a severe decline last year, the national debt is high and the foreign reserves are weak. monetary policy is already tight with a credit ceiling in place. we cannot tighten any further to address inflation. even if we could, this is not my preferred solution when prices are driven by supply constraints abroad. the adjustment burden then rests with the national budget. the question becomes : “ how much load can the budget carry to mitigate rising? ” my answer is that – “ perhaps not much given the high debt level! ” we are somewhat caught between a rock and a hard place! in my view, we need to concentrate more on measures that will change our behaviours in how we do things – how we can reduce fuel consumption or be self sufficient in basic foods. to help in some small way, the reserve bank announced some relaxation to the forward foreign exchange cover facility. commercial