degree of economic challenges that we currently face in fiji. for instance, papua new guinea and samoa have better levels of foreign reserves in months of imports than fiji has. yet their lending rates are higher. i wish to take this opportunity to thank the commercial banks for their understanding and support in our effort to address the economic challenges before us. with the credit ceiling in place, the reserve bank has allowed liquidity to rise. liquidity has risen by over $ 50 million since february this year. in addition, we are reducing the statutory reserve deposits by one percentage point from 1st of may which should pump an additional $ 29 million into the system. this should take liquidity to a very comfortable level. we are already seeing the impact of this easier liquidity on wholesale deposit rates which have fallen sharply to 5 percent from around 15 percent late last year. with this liquidity condition, one would expect commercial banks and other lending institutions to pass this lower cost of funds through to lending rates. and here i must congratulate westpac for taking the lead and reducing its lending rates. lower rates will help support growth and investment in this difficult time. in support of investment and growth, the reserve bank now considers commercial banks ’ lending to investment, small and medium size businesses and to exporters to be outside the credit ceiling. since december last year, the reserve bank has approved over $ 70 million of loans above the credit ceiling. economic projection as you know, we project that the economy will fall by 2. 5 percent this year. there are some important factors that will determine the final outcome. first, what happens to tourism is important. there are mixed signals coming from this important industry. the latest visitor arrival figure shows a decline of around 7 percent in january compared to january the previous year. a survey we conducted recently of a few major hotels show a low occupancy rate of around 30 percent and not much higher going into their forward booking. the second factor is gold. the current forecast does not include any gold production. but with the change in ownership of the vatukoula mine, we hear that production may commence in june. the third factor is the possible industrial action by the trade unions. it appears to me that all trade unions are seeking strike mandates. i hope that the situation is amicably settled. the fourth is the uncertainty in the european union ’ s support for the important sugar industry reform. we all hope that the discussion in brussels this week is fruitful for fiji.

it with the high standards demanded by the international community. the lack of proper tools is another reason for our low productivity. given the oversupply of labour in our economy, we tend to be labour intensive in our industries. our ratio of capital to labour is quite low. unfortunately, this equates to low productivity. it does not necessarily be so. we can still have labour intensive industries but higher productivity. this means that productivity must be internally driven by organisations or firms themselves. the introduction of performance contracts in the civil service is a classical example. another problem faced by us is the lack of up - to - date and appropriate technology. we still find some industry with outdated or inappropriate technologies. our sugar mills are an example. there are some industries that have taken advantage of the latest technologies and adopted international best practices, such as fiji water. of course, adopting new technologies cost money and a business case needs to be made. but those that have been able to adopt new technology have reaped good results whereas the others have lagged behind. in this regard the rationalization of telecommunications charges. they will help lower our cost of doing business and catalyze innovation to the industries. another factor is the skills in our workforce. education and retention of skills are important. because of our size, we have a limited pool of skill people. but to make it worse, we are losing them all the time. this is a graph of our emigration trend. they average around 5000 people a year. developed countries like australia, new zealand and canada reap the benefits of our training. its aid in reverse. but it is a free world! these countries themselves loose labour to other countries. global labour movement is intensifying and the global war on talents is fierce. the world is now the market place. fiji therefore must look elsewhere to fulfill its short - term skills requirements. this will add to our costs. but we cannot afford to wait around until we have the right skills. on the flip side, we are just beginning see the positive side of labour transfers with our soldiers in kuwait, care givers in the united states and rugby players in japan. one of the direct results of this export is the phenomenal rise in the remittances that we now receive from our workers and families abroad. last year it rose to about $ 315 million and counting. this blessing has come at the right time with our exports performing well below potential. how can we raise productivity? who should do