savenaca narube : fiji ’ s economic status and projections address by mr savenaca narube, governor of the reserve bank of fiji, to the australia / fiji business council, gold coast, australia, 18 october 2004. * * * introduction this is my third annual update to your joint councils on the status and projections of the fiji economy. i am always pleased to accept your invitation, not only because of the opportunity to visit such exotic places as the gold coast, but also because each time that i present to you, the fiji economy continues to grow. the statistics show that fiji is now breaking out of a 20 - year cycle of volatile and low economic performance. the fiji economy is strong. this year, we are estimating a growth of around 4. 7 percent although this is currently being revised. the tourism sector is again expected to lead growth together with the building and construction sector. there are also contributions from the wholesale and retail trade and manufacturing sectors. our macroeconomic fundamentals are firm. labour market conditions have improved. investment is rising again after a long period of decline. the level of foreign reserves remains healthy. inflation has been well contained at below 3 percent. international commentators including the imf and the adb have commended our economic management. four years of consecutive growth is a performance that was difficult to achieve in the past. not only have we achieved growth, the growth rates have been generally higher. the average growth rate in four years is over 4 percent, compared to 3 percent average growth from 1987 to 1999. moreover, we have achieved this performance despite the outbreak of sars, global terrorist attacks and the middle east war. immediate prospects what about the near future? over the next two years, gdp is forecast to grow by 4 percent in 2005 and to slow down further in 2006. these estimates of course may change as new policy measures are introduced and as additional information comes to hand. let me briefly take you through the major sectors. building and construction one of the major sectors driving growth in 2004 is building & construction. like tourism, the building and construction sector is booming in fiji. what is more interesting is that growth in this sector is being driven by the private sector. a number of major public infrastructure projects are also underway. the building industry is doing so well that capacity constraints are being felt in the adequacy of skilled labour. this may lead to wage pressures in the industry. wholesale and retail trade the wholesale and retail trade sector is also

respect, inter alia, to basel il ; macro prudential regulation ; international financial reporting standards ; mechanisms to address global market stability ; and governance of remuneration / compensation schemes, securitization, and off - balance sheet operations are issues which require further debate. the post - lunch session is especially interesting as it brings a regional perspective to the fore. the wealth of experience of the panelists will ably highlight the challenges and changes needed to address matters relating to the csme and the pace of harmonization of economic and financial sector policies and regulation ; cross - border banking, financial conglomerates, financial holding companies – implications for regulation and consolidated supervision ; deposit insurance schemes ; and cross - border crisis management and crisis resolution for systemically important financial firms. my final point is that sometimes it takes a crisis to spur action and the search for voice and participation for developing countries has improved tremendously since the crisis with the establishment of g20. this is the first step and we look forward to others. in closing, let me thank those who have gone to much effort to be here and i look forward to the presentations.