it also has some of the best pharmacies as part of its pharmacy listing, enabling customers to get quality services. while it is the government ’ s mission to provide quality and affordable medical services to the people of fiji, despite the improvements made over the years, we all know not everything can be provided for locally. as such, evacuation to other countries for specialized medical bis central bankers ’ speeches treatment remains a norm. on this front, a huge relief is afforded to those covered by medical insurance as they are able to access the much needed treatment through insurance. this is where companies like fijicare play an important role. ladies and gentlemen, it is no secret that providing medical insurance is a tough business with high net loss ratios. the reserve bank ’ s insurance annual report indicated that the net loss ratio for the medical class in 2010 was 78. 6 %. in other words, for every $ 1 of premium earned, 78 cents was taken up by claims alone, leaving the medical insurers with a small margin to foot operating costs and to try to make a profit. the ratio had fallen in 2011, but still remains high. in addition to this, medical costs overseas have increased significantly over the years. however, we note that despite this and tough competition, fijicare continues to provide this essential service to the country. fijicare ’ s dedication to providing quality and affordable insurance products to the citizens of fiji is testament of its mission that “ customers are really everything ( care ) ”. this is evident in the company ’ s initiatives towards meeting the needs of all sectors of the economy. i say this because your medical products and insurance policies are designed in such a way where you offer executive packages for those that can afford them, while also designing affordable packages for the less well off. as you are all aware, the reserve bank, through the insurance task force and national financial inclusion taskforce, has been driving micro - insurance initiatives for a number of years now. we would like to see more people insured against unforeseen losses but, more so, people at the base of the income pyramid. in this regard, fijicare was noted to be at the forefront in responding to our micro - insurance initiative. in partnership with the pacific financial inclusion programme ( pfip ), the company led with the introduction of a funeral policy, the first micro insurance product for fiji. the last 20 years, however, have not all been smooth sailing for fijicare, and they have had their share

yields have now dropped. oil price remains at around us $ 60 a barrel. the trade deficit continues to widen. it is therefore essential that the reserve bank do all it can to safeguard the external financial position of fiji. since may 2004, we had progressively raised interest rate and tightened liquidity. we had also highlighted back then the need to lift our exports. unfortunately, exports have yet to respond. in fact, with gold production and the sugar reform uncertain, there is still no light in the tunnel. we have tightened monetary policies progressively. some say that we should have moved more aggressively at the start. i do not agree with this view. introducing harsher measures at the beginning would have discouraged growth which was the last thing we need. it would have been an over kill. it makes more sense to tighten progressively and as much as possible allow room for investment and the economy to grow. in december last year, we had to introduce a ceiling on private sector credit. we also reduced the delegated limits given to foreign exchange dealers on selected overseas transactions. recently, we announced changes to borrowing guidelines for non - residents individuals and companies. there have been some concerns on higher interest rates particularly from individual borrowers and investors. we understand these concerns. but again we ask that you appreciate the seriousness of our financial situation. when things are tough, we must safeguard the bigger picture. we cannot be reactionary. if we do not take care of the bigger picture, the smaller picture will suffer even a lot more than what we are facing now. there are lessons from around the world that we should heed. when we compare the interest rates in fiji with countries like australia and new zealand as well as some of our pacific island neighbors it clearly reveals that they are relatively low in fiji. for example the lending rate in new zealand is 12. 25 percent, in papua new guinea 10. 7 percent and samoa 11 percent. this compares with 9. 34 percent in fiji. while these are the weighted average lending rates and the rates will obviously differ for individual borrowers they are the best gauge of the general level of interest rate between countries. this comparison of interest rates throws up two interesting observations. first, all the countries that i have mentioned are performing better than fiji including samoa and papua new guinea. yet their lending rates are higher than us. it implies that there are other factors that are important for investment and growth than interest rates alone. second and perhaps more pertinent, these countries do not face the