Presentation to the Fiji Institute of Accountants

FUTURE INVESTMENT AND GROWTH IN FIJI

Barry Whiteside Governor, Reserve Bank of Fiji 10 June 2011

Reserve Bank of Fiji

PRESENTATION OUTLINE

World economic outlook The Domestic economy Future Investment & Growth Way forward?

WORLD ECONOMIC OUTLOOK

Reserve Bank of Fiji

WORLD GDP GROWTH

% 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 2004 2005 2006 2007 2008 2009 2010 2011(f) 2012(f)
Source: IMF World Economic Outlook April 2011

2011 World Growth Revised Upwards

5.2 4.9 4.6 4.2 Forecast @ Apr 11 Forecast @ Apr 10 3.0 2.8 4.3 5.3 5.0 4.4 4.5

-0.6 -0.5

WORLD GDP GROWTH

Emerging Economies Underpin Global Growth
2-Speed Growth
% 8 2010(e) 2011(f) 2012(f) 7.3 6.5 6 5.0 4.4 4 3.0 2.4 2
2.6 4.5 6.5

0 World output Advanced Economies Emerging and Developing Economies

Source: IMF World Economic Outlook April 2011

TRADING PARTNERS OUTLOOK

% 6.0

Positive Outturn in Trading Partner Countries - Despite Natural Disasters still Positives for Fiji in Trade, Tourism
3.5 4.1 2010(f) 3.9 1.6 2.1 1.8 3.5 2.8 2.8 2.9 2.7 3.0 3.2 2011(f) 2012(f)

4.0

2.0

1.5 0.9

1.4

1.7

1.6

0.0 United States Australia New Zealand Japan Eurozone

ASIAS ECONOMIC OUTLOOK

% 15

Favorable Performances and Outlook in Asia

10.3 9.6 10.4 9.5 8.2 7.8 7.8 7.2 5.5 6.1 5.2 4.5 4.2 4.0 4.5 6.8 5.4 4.2

14.5

10

5.2

4.4

0 China India Thailand Malaysia Korea Hong Kong Singapore

Source: IMF World Economic Outlook April 2011

International price movements

Reserve Bank of Fiji

HIGH CRUDE OIL PRICES

US$/barrel (Brent)

Downside - Oil Prices Expected to Remain around US$100

Highest price ever $146 Currently ($116.73)

160 Futures

120

80

40

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

RISING GLOBAL FOOD PRICES

Index 37% 232

250 200 150 100 50 0 Apr-95

Food Prices have Increased Markedly

FAO Food Price Index

Apr-97

Apr-99

Apr-01

Apr-03

Apr-05

Apr-07

Apr-09

Apr-11

GOLD PRICES
US $/oz 1,800 1,600 1,400 1,200 1,000 800 600 400 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Upside for minerals - Gold Prices Expected to Remain above US$1,500

25/5 $US1528

Futures

ALUMINIUM PRICES
US$/Tonne US$/Tonne

COPPER PRICES
10,000 9,000 8,000 7,000 6,000

3,500 3,000 2,500 2,000

6/06 US $2664
1,500 1,000 500 0 1/01/2008 1/09/2008 1/05/2009 1/01/2010 1/09/2010 20/05/2011

5,000 4,000 3,000 2,000 1,000 0 2006 2007 2008 2009

6/06 US $9135

2010

2011
Source: Bloomberg

Reserve Bank of Fiji

EU Sugar Prices
US cents/1b

World Market Sugar Prices

US cents/1b

38 34

40 35 30

A record increase in supply from Thailand. 30/05- US 27.57 cents/ pound

30 26 22

25 20

30/05 US 21.78 cents/pound

15 10 5

F u t u r e s

18 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Fiji Sugar Corporation

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013
Source: Bloomberg

LUMBER PRICES
US $/000 board feet US $/tonne

FISH PRICES
2,000 1,600

500

01/06 US$ 1,693

400

30/05 US $232
300

1,200 800

200

400 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Bloomberg

100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

EXCHANGE RATES - against FJD

Stronger AUD & NZD - Improved Export & Tourism Competitiveness
NZD/AUD/USD 1.10 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30
Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11

Weaker USD positive impact on fuel import bill

NZD

-10.2%

USD AUD

+25.4%

-15.2%

In Summary
Positives Global recovery continuing . Positives for our trade, tourism, remittances. Strong emerging economies growth More spending power opens us up for
tourists from China, India etc.

Higher export prices assist our trade balance Favorable exchange rate movements more competitive market for our exports
and tourism especially from Aus and NZ

Negatives High crude oil and food prices

- Higher import bill and accompanying inflation

DOMESTIC ECONOMIC OUTLOOK

Reserve Bank of Fiji

DOMESTIC GDP GROWTH

Volatile & Low Economic Performance
Percentage point
14 12 10 8 6 4
2.7 2.1

Actuals

Average 5 Years

Average 10 Years

Average 10 Years = 0.9%

2
0.6

0 -2 -4 -6 -8 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009(p) 2012(f)

Average 5 Years = -0.2%

Sources: The Fiji Island Bureau of Statistics and Macroeconomic Committee

SECTORAL CONTRIBUTIONS TO GROWTH - 2011

%
1.4
1.23

Growth will be Broad Based

1.2 1.0 0.8 0.6 0.4

0.24 0.52

2.7%

0.2 0.0

0.19

0.14

0.13 0.07 0.07 0.05 0.03 0.03 0.02 0.01 -0.02

-0.2 Agri Manuf Fish Htl Rl Est Fin Mining Trans Edu Elect Othr Pub Whlsale Cons

TOURISM
Arrivals & Earnings at Record Levels
000s

Visitor Arrivals
Forecast as @ Apr 2011 Annual
663 632

$M 1,200

Earnings
Forecasts as @ April 2011 1,030

800

700
1,000 Annual 980

600
800

500

400

600

300
400

200
200

100

0
2002 2004 2006 2008 2010

0 2002 2004 2006 2008 2010

Reserve Bank of Fiji

Sources: Fiji Bureau of Statistics and Macroeconomic Committee

FISH
Production erratic but Earnings on the rise
000 tonnes 35

Production

$M 250

Exports

30

30

Annual 200

Annual 186

205

25

Forecast as at Apr 2011 150

Forecasts as @ Aprl 2011 157

20

15

14

100

10 50 5

0 2002 2004 2006 2008 2010(e)

0 2002 2004 2006 2008 2010 (e)

Reserve Bank of Fiji

Source: Fiji Bureau of Statistics

GOLD PRODUCTION GOLD

Production & Earnings on the rise
000 ounces 160 150 181 140 Annual 120 Forecast as @ April 160 Forecasts as @ April 2010 148 Annual

Production

$M 200

Exports

100

120

80 70 62 60 80 88

40

35 40

20

0
1997 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(f)

0 2002 2004 2006 2008 2010(e)

Reserve Bank of Fiji

Sources: Vatukoula Gold Mines Limited and Macroeconomic Committee

MINERAL WATER EXPORTS MINERAL WATER (EXPORTS)

Exports to Rise Further
$M 180 160 140 120
105 110 Annual Forecasts as @ April 2011

25%
156

56%
126

100 80 60 40 20 0
2002 2003 2004 2005 29 46 52 68

87

-27%
80

2006

2007

2008

2009

2010(e)

2011(f)

Sources: Fiji Islands Bureau of Statistics and Macroeconomic Policy Committee

SUGAR
Has sugar bottomed out?
000 tonnes 550 517 500 450 400 350 300 160 250 200 158 150 100 40 50 0
1994 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(f)

Production

$M 320 302

Exports
Annual Forecasts as @ April 2011

Annual Forecast as @ Apr 2011

280

240

200

185

187

120 79 80

104

132

0
1996 2002 2003 2004 2005 2006 2007 2008 2009 2010(e) 2011(f)

Reserve Bank of Fiji

Sources: Fiji Bureau of Statistics Fiji Sugar Corporation Limited and Macroeconomic Committee

GARMENTS
Production up but Export earnings flat
F$M 200 189 180 322 320 Annual

Production

$M 360

Exports

160 Forecast as @ Apr 2011 140 Annual

280 Forecasts as @ April 2011 240

120 200 100 160 80 64 60 58 120 101

98

40

80

20

40

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(e)2011(f)

0
2000 2002 2003 2004 2005 2006 2007 2008 2009 2010(e) 2011(f)

Reserve Bank of Fiji

Source: Fiji Bureau of Statistics

TIMBER
Production & Exports upsee huge potential in Forestry up
Production
000 m3 900 Annual 800 721 700 602 600 70 59 Forecast As @ Apr 2011 $M 90

Exports
83

80 Annual Forecasts as @ April 2010 72

578

60

500 385

50

400

40

300

30

200

20

100

10

0 1995 2003 2005 2007 2009(e) 2011(f)

0 2002 2004 2006 2008 2010 (e)

Reserve Bank of Fiji

Source: Fiji Bureau of Statistics and Macroeconomic Committee

TOTAL EXPORTS*
$M 2,000
Annual 21% Forecasts as @ Apr 2011

Exports on the increase !

10.3% 1,643 1,489

1,500
1,129 1,183 1,206 1,193 1,202 1,210

1,471 1,230

1,000

500

0
2002 2003 2004 2005 2006 2007 2008 2009 2010(e) 2011(f)

* Accrual data excluding aircraft

Sources: Fiji Bureau of Statistics and Macroeconomic Policy Committee

TOTAL IMPORTS*
$M

Imports also on the rise

Annual Forecasts as @ Apr 2011

4,000
3,535 3,096 3% 2,875 2,723 2,502 1,969 2,083 2,808 2,897

3,500 3,000 2,500 2,000 1,500 1,000 500 0 2002 2003 2004 2005 2006 2007 2008 2009

11.4% 3,227

2010(e) 2011(f)

* Accrual data excluding aircraft

Sources: Fiji Islands Bureau of Statistics and Macroeconomic Policy Committee

IMPORTS - 2011
Contributions to Growth
Percentage points

10
8.3
$1,040M

Mineral fuel and food imports account for around 47% of total imports
11.4%

o/w $333M for reexports

4
1.9

$531M

0.6
$587M

0.2
$282M Miscel Manuf Gds

0.2
$269M Chemicals

0
Mineral Fuels Food Mach&Tran Equp
* Contribution of mineral fuel re-exports to imports growth

PERSONAL REMITTANCES
Remittance inflows stabilise but industry more bullish!
$M

400

Annual 322

Forecasts as @ April 2011

300
232 213

297

311

294 256

295

287

200

188

100

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(p)
Sources: Fiji Island Bureau of Statistics and Macroeconomic Committee

CURRENT ACCOUNT
$M

1,500

Current Account Deficit now manageble

1,087 922 978

1,000

500 Services, Income & Transfers Net 0 Current Account Deficit

-31 -311
-4.7% of GDP

-226
-3.2% of GDP

-500

-1,000

-19.3% of GDP

-18.2% of GDP

-1,118

-1,233

-1,204

Trade Deficit -1,500

Forecasts as @ Apr 2011

-2,000 2002(r)

2003(r)

2004(r)

2005(r)

2006(r)

2007(r)

2008(r)

2009(r)

2010(e)

2011(f)

2012(f)

Source: Fiji Islands Bureau of Statistics and Macroeconomic Committee

FOREIGN RESERVES FOREIGN RESERVES

Foreign Reserves at Comfortable Levels
$ Millions 1,600 1,400 1,200 1,000 846 800 600 400 200 0
2001 2003 2005 2007 2009 31/05/2011 0

Months 1,470 1,303 1,096

6 8

741

729

786 549 515

805
4

559
2

BANKS LIQUIDITY
With the foreign exchange inflows there is ample Liquidity in the System.
F$ M 550 500 450 400 350 300 250 200 150 100 50 0 Jan-09
15 404 Devaluation Date 15-Apr-09

-RBF maintaining accommodative policy

559

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11
As @ 1st Jun

OUTSTANDING BANK LENDING AND DEPOSIT RATES

Interest Rates have trended down, though lending rates more gradual
Percentage

12

-RBF Policy rate biased downwards

Lending rate 7.44%

10
Time Deposit Rate 4.29% Savings Deposit Rate 1.17%

0
Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11

PRIVATE SECTOR CREDIT

Bank Credit Trending Upwards but very slowly
$M

-highlights the weak private sector activity

Value Annual Percent Change

Percentage $2,867 35 30 25 20 15 10

3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000
Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec-08 Jul-09 Feb-10 Sep-10

3.3%

5 0 -5 -10 -15

Apr-11

INFLATION
2011 Year-End Inflation Forecast at 7.0 Percent YearPercentage
12 10 8 6 4 2.7 2 0 -2 J F M A M J J A S O N D J F M A M J J A S O N D J F M A Devaluation

8.1% Y-on-Y Excluding Food & Energy 10.5% (VAT+FEA Tariff + OIL/Food)

2009
Reserve Bank of Fiji

2010

2011

DOMESTIC ECONOMY SUMMARY

Domestic growth erratic over the years GDP outlook is looking more promising Trade & Current account deficits improved Foreign reserves comfortable But Private Sector activity is weak Inflation is a concern but expected to ease

FUTURE INVESTMENT AND GROWTH

Reserve Bank of Fiji

Recent Trends and Indicators of INVESTMENT

Reserve Bank of Fiji

FOREIGN DIRECT INVESTMENT

$M

Inconsistent and minimal as a percent of GDP

Annual 9 Year Average FDI in Fiji % of GDP

% of GDP

800 700 600 500

433 9.9 714

20

16
13.3 542 499

12
8.8

400 300 200 100 0 2002

Reserve Bank of Fiji

9.2

8
263 229 5.2 67 1.7 76 1.7 111 2.0 3.9

0 2003 2004 2005 2006 2007 2008 2009 2010

INVESTMENT IN FIJI
% of GDP 35

Total Investment levels have been low for some time! Our economic performance is clearly reflective of this!

30 Government 25 Private Statutory Bodies & Public Enterprises 20 $651m/11%

Government Target: 25%

15
5.5 %

10
3.5 %

5
5.0 %

0 1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007(e) 2010(f)

Reserve Bank of Fiji

Sources: Fiji Bureau of Statistics & Reserve Bank of Fiji

INVESTMENT
Low in comparison to others
% of GDP

50
China

45 40 35 30 25 20 15 10 2000 2001 2002 2003 2004 2005 2006 2007 2008

India Aus Mauritius NZ PNG Fiji

2009

Reserve Bank of Fiji

EASE OF DOING BUSINESS

- We just make the top 33%!

Ease of Doing Business Singapore New Zealand United States Australia Samoa Fiji Tonga China Kiribati Papua New Guinea India
Reserve Bank of Fiji

2011 rank 1 3 5 10 61 62 71 79 93 103 134

2010 rank 1 3 5 10 67 61 66 78 91 108 135

Change in rank 6 -1 -5 -1 -2 3 1

Total Number of Countries - 183

Source: Doing Business 2011, The World Bank

DOING BUSINESS IN FIJI

Top quartile for getting credit and protecting investors!

Ease of... Doing Business

Starting a Business Dealing with Construction Permits Employing Workers Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Closing a Business
Reserve Bank of Fiji

2011 rank 62 104 58

2010 rank 61 107 58 31

Change in rank -1 3 -6 -2 -3 -1 5 2 3

50 46 44 77 103 63 117

44 44 41 76 108 65 120

Source: Doing Business 2010 Fiji, The World Bank

What have been some Impediments to Investment in Fiji?

Reserve Bank of Fiji

IMPEDIMENTS TO INVESTMENT
RBF Survey 1999
Major Impediments found: in no particular order of priority Government policy uncertainty Red tape and bureaucracy General economic climate Finding skilled labour Political situation Law and order issues Lack of infrastructure High Utility costs (eg. water and electricity) Land tenure instability
Reserve Bank of Fiji

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?
Impediments: Government policy uncertainty Actions Feedback obtained by RBF Govt Investment Packages and policies introduced over the years Need proper follow through eg. Develop the North policyno markets, infrastructure problems No about-turns/ transparency critical Transparency of tender processes for Govt funded projects Ensure proper regulation/licensing of builders to maintain construction industry standards Treat local and foreign investors the same

Reserve Bank of Fiji

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?
Impediments: Red tape and bureaucracy Actions Feedback obtained by RBF PMs Office & Commerce Ministry working to improve investment approvals process Proposal for an EDB Take investors by the hand approvals process Approval process must be investor friendly with quick turnaround time Numerous approvals required across many agencies Where is the one stop shop? Approving Agencies protecting their turf

Reserve Bank of Fiji

PROPOSED VS. ACTUAL INVESTMENT

Great potential but low implementation rate
Is this Red Tape holding us back?
$M 2000

- better implementation would take us closer to the 25% Investment/GDP ratio!

1,846

Proposed

Implemented

1600

1200

1,044

800

639

687 591

400 223 94 0 17

2007
Reserve Bank of Fiji

2008

2009

2010
Source: Investment Fiji

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?
Impediments: General economic climate Actions Feedback obtained by RBF

Annual growth target of 5 percent

Expansionary fiscal policy Reforms target land availability (land bank), sugar industry, agriculture (import substitution) Mining licences issued Mahogany legislation and licences Lowered tariffs on selected Agricultural equipment Accommodative monetary policy (RBF) Sound and modern financial system (RBF) GFC had negative impact for many businesses Still high tariffs on imported farm inputs (barbed wire) Hotels need to adapt to preferences of emerging market tourists (from China & India) Uncertainty about taking out profits and capital

Reserve Bank of Fiji

THERE IS NO UNCERTAINTY ON OUTWARD REMITTANCES!

RBF is responsive to requests for capital & profit repatriation

Withdrawal of Investment , $245 Other, $7

Profit & Dividend; $849

$1.1 BILLION IN WITHDRAWAL OF CAPITAL FUNDS SINCE 2005

Reserve Bank of Fiji

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?
Impediments: Finding skilled labour Actions Feedback obtained by RBF Govt set up National Employment Centre to facilitate training to up skill workers 15,000 NEC registrations with training started Initial NEC placements underway We have an educated, English-speaking workforce (positive for call-centers) FNU should stick to teaching relevant Trades to cater to demand in these areas

Reserve Bank of Fiji

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?

Impediments: Political situation

Actions Feedback obtained by RBF Govt committed to elections in 2014 under the Electoral Reforms Assistance on electoral reforms from Indonesia Continuing wait and see attitude by local investors Law and order issues Reforms in the Judiciary Visible progress in policing Judiciary operating smoothly Case backlog still an issue
Reserve Bank of Fiji

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?
Impediments:
Lack of infrastructure

Actions

Feedback obtained by RBF

Major road/bridge/jetties upgrading projects in progress

$192m earmarked in 2011 ($156m 2010) Poor state of existing roads Low utilization rate of capital budget Delays in tender processes Difficulty of access to markets (eg.Dalo)

High Utility costs (eg. water and electricity) and inconsistent supply.

Reserve Bank of Fiji

Promotion of renewable energy projects to keep down costs (FEA Nadarivatu Hydro Project, etc.) Corporatization of Water Authority to improve consistency of supply (ADB Funded Suva Nausori water project)

IMPEDIMENTS TO INVESTMENT
Have we addressed the issues from 1999?
Impediments: Land tenure uncertainty Accessibility to land Actions Feedback obtained by RBF New Land Use Decree (Land Bank) Around 1,115 hectares committed to the land bank by landowners o/w 226 hectares already leased for periods up to 20 to 30 years Win-win situation for landowners and tenants Equitable distribution of rental to landowners

Reserve Bank of Fiji

Where does the Potential for INVESTMENT and GROWTH lie?

Reserve Bank of Fiji

INFRASTRUCTURE PROJECTS of Government

New Roads & Bridges Outer Island Jetties $42.2 Maintenance of Roads & Bridges Fiji Road Upgrading Project $15.0 $13.3 $3.1 $3.0 Maintenance of Public Buildings Others

2011
$116.0

$192 m

Reserve Bank of Fiji

TOURISM
Project
SSS International Hotel (Fiji) Ltd

Location

Value of investment

Progress to date
Stage 1 - Completed Stage 2 - Construction to start later this year Target completion - 2012

Nasau, Nadi

$40 million

Tabua Sands Warwick International Hotels Naviti Resort Warwick Fiji Resort Denarau

$4 million - renovations $14 million - additional rooms $2.5 million - furniture upgrade $5 million - for next 3 yrs Work has started Bridge/Marina/Sandworks Completed Peppars Naisoso Island Resort - Civil & Earthworks underway Work has not started yet

Westin Denarau

Total value - $230 million Naisoso Island Nadi Full project to be completed by 2017

Reserve Bank of Fiji

Source: Media, Industry liaison, company websites

TOURISM
Project
Fun World Center Ltd

continued
Progress to date
Stage 1 Completed Stage 2 Construction underway At designing stage Construction expected to start in July

Location

Value of Investment
$15 million

Nadi

Grand Pacific Hotel (GPH)

Suva

No details available

FNPFs Momi Bay Project

Nadi

FNPF to either sell property outright or opt Revalued at $55 million against for joint venture Fund exposure of $61 million EOI on joint venture called last year

Reserve Bank of Fiji

Source: Media, Industry liaison, company websites

TOURISM - CASINO PLAN

The Government has called for Expressions of Interest from internationally successful casino developers and operators Local casinos are expected to attract more visitors and increase visitor length of stay, particularly from new emerging markets China, Europe and India Advantages: o Create a new segment for Fijis tourism sector o Flow on effect to satellite industries and the public o Create employment o Increase Government revenue Drawback: o Possible social implications for locals if not controlled
Reserve Bank of Fiji Source: Ministry of Tourism

MINING
Project Developer Location Potential Production & Employment Progress to-date

Wainivesi Gold

Asia Pacific Wainivesi Resources Ltd Tailevu (APRL)

250,000 tonnes Currently in small-scale production of ore every Royalty payment made to Govt. and year for five land-owners on first shipment of years. ores Paid for surface lease 50 years in 20-25 workers advance employed 240,000 ounces NML seeking mining license gold reserves Company currently exploration phase is Phase 1 exploration works in Presence of high quality gold deposits confirmed via surface sampling

Mt Kasi Gold Tuvatu Gold

Newcrest Wailevu, Mining Ltd Vanua Levu (NML) Lion One Ltd Sabeto Lautoka

Reserve Bank of Fiji

Source: Industry liaison, company websites

MINING
Project Developer Location

continued
Progress to-date

Potential Production & Employment

1 million tonnes of Bauxite Ore Export Value $56 million.

Bauxite

Xinfa Aurum Exploration Fiji Ltd

Nawailevu, Bua

Mining lease issued in May 2011 Major export destination China A $4 million jetty expected to built in Bua

Life of Nawailevu Mine 2 years Copper Newcrest, Mitsubishi & Nittetsu (Namosi JV). Namosi Employment -100 workers Amount of ore reserves not fully determined at this stage. Between Nadi Sigatoka Ore reserve - 0.13 million tonnes Awaiting surface lease from NLTB. Mining lease to be issued after the issue of surface lease
Source: Media, Industry liaison, company websites

Drilling works continuing Feasibility studies underway at the Waiyaka and Waisoi corridors

Manganese

Viti Mining Ltd

Reserve Bank of Fiji

FORESTRY
Company
Pine/ Chips Tropik Woods Limited/ Fiji Pine Limited

Location
Viti & Vanua Levu &13,000 ha of plantations across the Maritime zone Viti Levu

Potential
59,000 hectares

Value
Current Price - $US 155.50 per tonne equivalent to around FJ$273 per tonne. Over a billion dollars

Progress to-date
Harvesting in Vanua Levu deferred due to delay in construction of the loading tower First shipment of pine chips to Japan delayed to Q4 Local value-adding will fetch higher returns for Fiji FFF also received lease to plant teak in Nadroga Listing on the South Pacific Stock Exchange

Mahogany

Fiji Hardwood Corporation Ltd Future Forest Fiji Ltd (FFF)

41,000 hectares

Teak

Ra Province

1 million trees by 2015 (2025 years to mature)

Teak price is three times higher than Mahogany

Reserve Bank of Fiji

Source: Fiji Future Forest & Tropik Wood Limited

FISHING
ACCESS TO EU MARKET Progress to Date Only 1 fish processing company (Golden Ocean) , out of 6, is currently EU compliant

7 fishing vessels (out of the 60) are now EU compliant

Entry into the EU market will attract investment into the fishing industry , especially in processing

Benchmarking against high EU standards - will assist Fiji to export more fish to any destination overseas

Reserve Bank of Fiji

Source: Industry Liaison

RENEWABLE ENERGY
Project Developer Location Capacity Invest. Value
$300 million

Progress to-date

Nadarivatu Hydro

FEA

Nadarivatu

41.7MwH

55% complete Jan. 2011 Start generation - Q4 2011

Biomass

Pacific Renewable Energy Ltd

Vuda

17.4MwH

$65 million

Project construction to employ 200 workers Plantation will employ 215 workers 20-25 will be employed at the Plant Save $40 million in foreign reserves Roads connecting to site completed Chinese engineers finalising designs Fully funded by the Chinese Govt

Somosomo Hydro

Department of Energy

Taveuni

700KwH

$20 million

Cogeneration Plant Bagasse Namosi Hydro

FSC Rarawai Hydro Fiji Ltd

BA

30MwH

Expressions of Interest - called Jan. 2011 $100 million Preliminary geological studies completed Preliminary agreement with FEA to purchase production
Source: Media, Industry liaison, company websites

Namosi

25 MwH

Reserve Bank of Fiji

To sum up FIJIS RECENT INVESTMENT EXPERIENCE

Investment levels are well below 25% target Private sector investment clearly below par with reliance on public sector to drive growth World Bank suggests we have lost some ground in terms of ease of doing business (but still in top third) Are we doing enough to address the impediments to investment? Still large investment interest in Fiji; but we need to nurture this to implementation! Excellent opportunities for investment in a number of key sectors

Reserve Bank of Fiji

THE WAY FORWARD

It is crucial that we MAINTAIN MACROECONOMIC & POLITICAL STABILITY to provide the foundation for INVESTORS

Reserve Bank of Fiji

TO DO THIS
We must:

Grow the Economy Create an environment conducive to Investment Maintain Law and Order Continue to Promote a Sound Financial System Speed Up Structural Reforms

Reserve Bank of Fiji

THE WAY FORWARD

Only if we do these things will we realise our potential for Investment and Growth!

Reserve Bank of Fiji

VINAKA

Reserve Bank of Fiji