compounded by the impact of the global recession and natural disasters that we suffered. i had mentioned the devaluation above. the others included : • exchange controls that were tightened, similar to december 2006. • interest rates were capped to december 2008 levels and interest rate spread ( between the lending rate and deposit rate ) was fixed at 4 percent. • lending policies – priority sector lending will continue and special approval above the ceiling will still be considered by the rbf. • taking proactive “ hands on ” approach in the development of the key areas of the economy ( which are normally beyond the scope of a traditional central bank ’ s role ) through the establishment of the new financial system development and compliance group to look at issues like microfinance & sme development, sustaining remittances flows, financial literacy, rural banking, local value adding and policies to discourage the importation of high value luxury goods. let me correct some mis - reporting especially in the overseas media with respect to exchange controls and foreign reserves. yes, the rbf did tighten exchange controls in april this year. these measures are absolutely essential to prevent capital flight when there are huge speculations and expectations of currency adjustments. however, let me state here that there are no restrictions on any trade transactions whatsoever. all payments in and out of fiji are as normal as can be expected. however, we do control fiji residents ’ investments abroad. policies in this regard are either tightened or relaxed depending on how our foreign reserves perform. on foreign reserves, i did mention earlier that our reserve levels had started to fall rapidly since last year with the onset of the global crisis. most countries went through similar situation. we all had to take various actions to reverse the trend. this does not mean that we are not capable of meeting our overseas commitments. fiji has never failed to meet any of its foreign obligations. our reserve levels are now reaching comfortable levels and i am sure this should give more comfort to our trading partners. rbf policies towards a sustainable tourism growth one of the key policies that the rbf has announced this year is the local valued added content requirement for the tourism industry. the local value adding policy announcement by the reserve bank requires that any domestic borrowing by the hotel industry from banks for extension or development purposes should have a local value content included. this is to encourage the use of local goods and services. it would help reduce dependence on imports. why did we have to introduce this policy? i am sure there is lot of interest in this

the world. what lessons can we learn from them? i am positive that we can address this particular structural issue and improve our world ranking. investments will create domestic economic activities and help the country grow sustainably. the sustained performance of the economy is important for employment generation, poverty alleviation, improving confidence and ensuring stability. like in any other country, unemployment and poverty could become major issues if we do not grow the economy sustainably. the 2003 “ working out of poverty ” report by the international labour organisation stated that “ poverty elimination is impossible unless the economy generates opportunities for investment, entrepreneurship, job creation and sustainable livelihoods. the principal route out of poverty is work. ” we have to manage the things that are within our control whilst adjusting to those that are beyond us. reforms in this respect are therefore vitally critical. this is actually the new economic paradigm that we are pursuing in fiji. we need to commit to the reform agenda that the government has developed. our growth performance has been less than impressive over the years. we need to change the way we do things. we need to address the structural reforms necessary to unleash our economic growth potential. we have identified these structural challenges in various forums over the years. addressing them will be part and parcel of building a better fiji for all. we have to continue the reform momentum. other countries are doing it in their endeavour to better their performance. to do otherwise could mean isolation for us whilst our neighbours and others progress. we must not lose sight of this reality. we need to share this common vision that change is inevitable for us to maximise and put to good use the limited resources we have, improve productivity and efficiency, address poverty and hold our ground in this increasingly integrated global economy. we have to remain competitive. to do nothing or progress at a snail ’ s pace would be to our disadvantage. i cannot emphasise enough the importance of undertaking reforms now and maintaining momentum. the improved livelihood of our future generation will depend on the sacrifices we make now through economic adjustments or reforms. when we begin to reap the rewards of the reforms in future, though difficult some of them may be, we can stand back and say at that juncture that it has been worth it all. ladies and gentlemen, we meet at a time when the global economy continues to go through turbulent times. the numerous downward revisions of world growth by the imf are an indication of the uncertainties that we face. the recently revised global growth projection for this