Jan 21, 2018 Last Updated 10:47 PM, Jan 14, 2018

Masitabua the central banker

By Mereseini Marau-Totoka

Growing up in a settlement just on the outskirts of Fiji’s capital Suva, the newly appointed Deputy Governor of the Reserve Bank of Fiji Esala Masitabua saw the 18-storey building located on Pratt Street in the city being built.

Little did he know that the same magnificent building he witnessed starting to take shape from its foundation to the roof- the Reserve Bank of Fiji- would be his work place for most part of his career life.

Taking up his new post as Deputy Government of Fiji’s central bank in the New Year, Masitabua was reflective and humbled as he looked back in his life journey and how he had fared thus far.

He also shared his plans for the central bank.

Childhood

Life in that Nauluvatu Settlement along Suva’s Reservoir Road was not easy for him and three siblings of two sisters and a younger brother.

He attributed his achievements to the extreme hard work of his police constable dad originally from Wailevu in Ravitaki, Kadavu and his mum a seamstress from Vava’u in Tonga.

“Life was tough and living conditions initially squalid but my parents worked extremely hard to improve our quality of life. They also instilled in us children the value of hard work, being honest and knowing the Lord. We are so grateful for their sacrifices. My dad was a special constable and security officer at Burns Philp and mum was seamstress at Tiki Togs.”

They both earned near minimum wages. He reminisced that when business got tough, his parents would work reduced hours forcing them to struggle to make ends meet. The struggles included going to bed hungry, walking in the rain to go to school, patching school bags and sandals until his parents could afford to buy new ones.

After he completed his secondary education at Marist Brothers High School in 1988, he wanted to work and earn his own money because he wanted to “have the autonomy to buy and enjoy the things I could not have growing up.” His dream of becoming a pilot was put on hold indefinitely.

“Working for Fiji’s own commercial bank appealed to me, I applied successfully and worked there until I decided to further my education in 1991.”

In 1994, Masitabua returned to the National Bank of Fiji and three years later the bank collapsed. Following the bank restructure, where he was part of the asset management team, he resigned and became part of the unemployment statistics for a while. In 1997 he came across a vacancy advertisement in the newspaper for a Clerical Officer Ledgers in the Reserve Bank of Fiji. He joined in July 1997 as a ledgers officer just when the Bank celebrated its 25th Anniversary. That was the birth of his career as a central banker.

Central banking

“I may not have initially aspired to be a central banker but when I joined the Reserve Bank in Fiji in 1997 I truly felt that I had found my calling in life.”

Masitabua worked his way up the ladder in Reserve Bank before becoming the Chief Manager Financial Markets in 2013. Like in any other career, Masitabua said there were challenges and obstacles along the way but he have been blessed with a loving wife Omeri Ravula and family to support him, as well as friends and workmates.

“I have enjoyed the past two decades immensely benefitting from specialised training and exposure and I look forward to the new chapter. The accumulation of development and experience I have had in the Bank will be put to good use in this new role.”

 His plan as second- in- charge at RBF is simple.

“I need to continue to build on the legacies of my capable predecessors which include the current Governor. Like any other leader I will bring my own personal style of leadership and I look forward to continuing to grow and develop as I hope I will be able to contribute to the development of others I come into contact with.”

He shares that the central bank has a strategic plan in place that provides a guide for all facets of their annual work plans linking up to the mission and vision of leading Fiji to economic success. Acknowledging that the exciting and challenging part of working at the bank is that while the mandate of the Reserve Bank of Fiji is constant, the environment and circumstances change constantly. In his new role Masitabua will play a supportive role to the Governor with key areas of defined responsibilities.

“We will be grappling with similar but nuanced challenges compared to my predecessors.”

An example he offered is what he labels the ‘period of recent unprecedented economic growth’ the country is experiencing.

“This is extremely positive but does introduce a whole new set of challenges compared to the period when the challenge was to stimulate or kick start the economy like that faced in the early then late 2000s. “

He said past Governors would have dealt with changing technologies and demographics of the labour force, those broad challenges remain but are slightly different now.

“With the increasingly younger and relatively more transient workforce, there are adjustments that need to be made to policies, processes and in my view, leadership styles. Likewise technological innovation is presenting opportunities as well as challenges for all including central banks.”

Up to the Challenge

 “I can assure the people of the country that I am excited, keen to embrace the challenges of the new role and ready to give it my absolute all.”

Masitabua reminisced on one of his favourite memories back in the early 2000s where he and a team from the bank led by the then Deputy Governor who later became Governor Sada Reddy went to donate computers to Wainiyavu Village School in the upper reaches of Namosi on Fiji’s main island.

He recalled boarding the punt from just past Navua Town up the Navua River to Namuamua Village where they had to get off and walk the rest of the way to Wainiyavu, traversing difficult terrain. After zig zagging and crossing a tributary 23 times over two and half hours, they finally reached their destination.

Marvelled at the natural surroundings and waterfalls, they never thought working for a central bank would take them to such a place. It was the joy on the faces of the students, teachers and parents that was the consolation for that difficult trip.

“I could not help thinking that one of those little children would perhaps be a future Governor, or Minister or Prime Minister.” 

Masitabua said his work at the Reserve Bank has taken him to countries abroad as well as over Viti Levu, Vanua Levu, his home island of Kadavu, Taveuni and other maritime islands. From his humble beginning, Masitabua knew there was no substitute for honesty and hard work.

His advise to youth is to listen to their parents and elders.

“Whatever task you are called to do, do it to the best of your ability, and take no short cuts. We cannot all be executives, general managers, doctors or pilots but we can all be successful and be an inspiration to others in whatever we do.”

 

A challenging situation

The level of Marshall Islands’ offshore loan debt is impressive—over US$120 million— for a country that had revenue of only US$107 million for the fiscal year 2011. The 13 loans the country obtained from the Asian Development Bank have left it owing over US$73 million, while state-owned enterprises (SOE) owed another US$50 million, mostly to a U.S. government lending agency. The annual loan payment due to ADB is increasing each year and will peak at US$3,548,289 in FY2016. Coupled with the SOE debt, the government is shelling out around US$7.5 million annually for debt servicing on top of subsidizing nearly all of its SOEs.

Barring any new loans, ADB debt is due to be cleared by FY2037. Soaring fuel prices in the late 2000s pushed the government’s power utility company into near bankruptcy, forcing it to secure a high-interest loan to pay for fuel. The loan nearly crippled the SOE. The power utility gained support of the ADB as the company launched a recovery plan in 2010. ADB lent funds to the government to pay off the higher interest commercial bank loan to give the Marshalls Energy Company financial breathing room.

While some of the country’s long-term debts to ADB are from loans that were poorly planned or should not have been issued in the first place, the power utility loan has been a key factor in the company’s resurrection as a functioning entity. In part because the utility company is pursuing an aggressive improvement plan, it was able to negotiate a two-year loan payment deferment with the U.S. Rural Utilities Services, relieving it of having to pay US$2.2 million and gained a US$2.3 million grant from the same U.S. agency to rebuild one of its large power plant engines, which will, when completed, reduce costs by cutting the amount of diesel consumed and further stabilize power service.

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Tax haven tsunami

US$32 trillion hidden in havens, offshore banks

Two months ago, sitting over a bottle of toddy, an offshore source sums up industry insider forecasts: “They know the writing is on the wall.” Overhead, coconut tree fronds rustle above us in brief summer breezes. One month ago, that breeze turned into a global gale force wind, history’s biggest expose sweeping like a hurricane through tax havens around the planet. That expose triggered off rule changes of earthquake proportions for tax havens. “Seismic”, reported the Guardian, an English daily. “Gigantesque” exclaimed La Libre, a French weekly. “A game changer”, commented the Tax Justice Network. “...a virtual [Mount] Everest of data ...” said Die Spiegel, a German daily These were just a few of the tsunami of headlines from the news media around the world, delving into 2.5 million leaked files uncovering the hidden world of more than 100,000 people and companies.

Files came in the form of a hard drive posted to an Irish journalist working long-term in Australia, Gerard Ryle, who a few weeks later went on to head the ICIJ, the International Consortium of Investigative Journalists. Immediate comparisons were made with Wikileaks, famed for publishing a quarter of a million diplomatic cables leaked from the US State Department. More recently, Wikileaks published thousands more files in what it called the Kissinger files. Wikileaks’ cables show government secrets, including behind-the-scenes deals. ICIJ offshore files exposed people and companies behind corruption of those governments.

Those named as using the havens include powerful politicians, US dentists, Wall Street traders, Russian executives and international arms dealers. Estimates of offshore wealth hidden in tax havens and offshore banks go as high as US$32 trillion.

Many news headlines featured coconut tree logos, a visual signpost pointing towards what the French media describe as “fiscal paradises”. Focus fell heavily on the role of the Cook Islands’ offshore finance centre as the origins of a global network, Portcullis Trustnet.

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ANZ Bank’s Pacific Outlook for 2015 projects Pacific Island economies to achieve a positive growth this year with Papua New Guinea’s economy forecast to soar to a record 20% growth driven by exports of liquefied natural gas (LNG).

The Australia and New Zealand Banking Group’s (ANZ) Pacific outlook for 2015 is forecasting PNG’s growth at 20 per cent while the Asian Development Bank’s (ADB) estimations are 21 per cent.
Either way PNG’s economy will thrive this year on LNG production which started in 2014 but this year will be the first full year of production.
Fiji’s economic growth will be strong following last year’s elections with a forecast of a 4 per cent growth this year.
Both Samoa and the Solomon Islands economies will improve following last year’s natural disasters. Samoa’s Gross Domestic Product (GDP) is at an optimistic 2.4 per cent while the Solomon’s will significantly improve from its 0.3 per cent in 2014 to 3.3 per cent this year.
Timor Leste’s economy is estimated to perform close to 7 per cent, Vanuatu below 4 per cent and Tonga is expected to remain sluggish and below 2 per cent.

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By Samisoni Pareti

WITH Asia projected to grow by 5.6 per cent per year for the next 20 years and expected to account for nearly 40 per cent of global output by 2030, it makes good business sense for small islands of the Pacific to look to Asia as their next big trading and business partner.

That’s the assessment of a recent study done jointly by the Manila-based Asian Development Bank and the ADB Institute on ‘Leveraging the Benefits of Asia’s Integration and Growth for Pacific Economies.’
Although the full report is due for publication early this year, the bank’s quarterly Pacific Economic Monitor published snippets of the study outcome last December.
Statistics showed that trade – both in imports as well as exports -- between the Pacific and Asia had increased nine times from 2000 to 2012.
Trading in 2000 amounted to US$2 billion, but this reached $19 billion in 2012.

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