Around 8,000 members of the Fiji National Provident Fund (FNPF) now have less than F$35 in their General Account (GA) after exhausting it over COVID-19 assistance.
This was revealed by the Fund this week when it gave details of a second phase of assistance for members - to begin tomorrow (Friday June 5) with a payout of around F$1.7million ($220 each) to the 8,000 members.
"These are the members who came in during COVID 1 (COVID-19 Assistance Phase One) and have exhausted their GA balances. Why we have kept the $35? It is to cover their Special Death Benefits. So about 8,000 workers have between $0 and $35. For these 8000 members, the government will fully pay their assistance for the next five fortnights," said FNPF Chief Financial Officer Pravinesh Singh.
Phase 2, announced by government last week, will see FNPF members unemployed due to COVID-19 dipping again into their own accounts for a total of $1,100 per member, paced out in five fortnightly payment of $220 per fortnight, with those having less than $1,100 to be topped up by government.
Category 1 of Phase 2, which comes into force today, caters for 8,000 members, according to Singh.
While the first $220 will be directly deposited into their bank accounts this Friday, they will only qualify for the next fortnight's $220 and subsequent installments if they are able to verify, via their previous employer, that they are still unemployed.
Singh said the Fund expects total value of assistance for this first group to be at around F$8.8 million, if all 8,000 members qualify for the duration of the five fortnights.
Category 2 and 3 of Phase 2 will be activated on June 9, with total value dependent on number of applications approved.
The FNPF, a compulsory pension scheme for Fijian workers, maintains a 70/30 access rule for each member, where 70 percent of a member's account is preserved for retirement (Preserved Account) and 30 percent is for members to access for a list of approved benefits such as housing, unemployment and education(General Account).
According to CEO Jaoji Koroi, this 70/30 rule was instituted in 2012 following a reform of the Fund and this has helped build up members' Preserved Account from F$2.5billion in 2014 to F$4.72 billion at the end of June last year.
While confirming FNPF's participation in the Fiji Government-guaranteed loan facility of F$455 million (US$207 million) approved by Parliament last week, FNPF CEO Jaoji Koroi said interest payments, deferment and related issues will be discussed with the borrower under the Fund's new lending facility, in which its borrowers can make suitable arragements in light of difficulties faced due to COVID-19.
"FNPF has always had a strategic relationship with Fiji Airways. We're a long term investor and we see Fiji Airways as a strategic asset for Fiji because tourism is quite important and having a strong airline is crucial for our investments in the tourism sector. As you know after the Global Financial Crisis, we had that investment with Fiji Airways through a loan and that has yielded good results over the years. In fact, members have received close to $65.1million in interest from that lending facility since then. We're going through a very important cycle, and we still need to look to the future. We still need that strategic asset to grow and continue to bring back what we all look forward to, which is a strong tourism sector," Koroi said.
"It's a matter of looking over the next two years or so, we understand the capacity and what needs to be done. I think Fiji Airways has also done internal restructuring of their balance sheet in terms of what to let go and what to keep, so that it can be a finer company that we can improve. So we're looking at participating in that facility and because it's now a government guarantee, we're taking a risk on the lending." Koroi said.
Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum detailed the loan structure in Parliament last week as comprising domestic borrowing (F$191.1m) and offshore borrowings (U.S$117.1m), or a total of F$455million spread over a three year period, effective May 30, 2020.
"Companies like ADB and all these international funding agencies are also looking to be part of that facility, so I think the message is: ok, two years is going to be tough but we need Fiji Airways to come out strongly for the future of the country," Koroi said, when asked about the likelihood that the national airline may not be able to pay anything in the first year since tourism is still crippled.
As revealed by Sayed-Khaiyum last week, $56.3 million is coming from FNPF while the rest will be borne by other local agencies including the Reserve Bank of Fiji and ANZ Bank.
FNPF, whose exposure in the tourism sector is around 16 percent, owns most of Fiji's major hotels and hotel properties in Fiji's tourist belt in Nadi as well as in Suva.
*Editor's note: This article was updated on June 5 after FNPF provided updated figures.
The end of breakfast buffets and garlanding on arrival. The rise of virtual travel experiences. The longing for solitude and simplicity. This is just a sample of the travel predictions being debated across the globe as we look to post-COVID tourism.
But how well is the Pacific positioned to respond to potential changes, and what is the current status of the industry?
“I understand one of the greatest challenges that we have is uncertainty,” Fiji’s new tourism minister, Faiyaz Siddiq Koya told Fiji tourism industry participants in a webinar recently.
China, which has reopened for domestic tourism, has closed buffets, increased distance between tables in restaurants, has all staff wearing personal protective equipment, closed gyms and indoor swimming pools and switched off air conditioning, reports McKinsey’s China-based analysts. Magazines and newspapers are no longer available on flights, and food and beverages are packaged and bottled.
McKinsey predicts young travellers will return to international tourism first, not traditionally the Pacific’s strongest visitor dynamic, although it does provide an opportunity to further develop niche markets, such as adventure tourism.
Associate Professor of Tourism Futures at Wellington School of Business and Government, Dr Ian Yeoman has identified a number trends which could characterise travel in the future, including the desire to connect with family and friends, the search for simplicity, the end of expensive, frivolous or environmentally-destructive expenditure and a move towards community and collectivism.
The Pacific is well placed to capitalise on several of these trends when borders open up, as long as we can differentiate ourselves from other destinations.
The outbreak of Covid-19 in Papua New Guinea represents an added threat to economic growth and stability, given the country's limited capacity to manage the health crisis, according to three global economic analysts.
On the plus side, government has raised more than K1 billion (US$286 million) ‘COVID Bonds’ from banks and super funds and Treasurer Ian Ling-Stuckey says he’ll be seeking another K1.5 billion for COVID bonds over the coming weeks.
Fitch Solutions’ Country Risk Research Unit, the latest ANZ Bank’s Pacific Insight Report and ratings agency Standard and Poor’s (S&P) have all revised down growth forecasts, with both Fitch and ANZ predicting a recession this year.
But the Bank of PNG, the central bank, thinks the impact of Covid-19 will be ‘contained’ during 2020 and will be minimal next year and 2022, according to its latest biannual Monetary Policy Statement.
The UN Human Rights Office has warned of “toxic lockdown culture” in a number of countries, with UN Secretary General António Guterres reminding governments that the threat was the “virus, not people.”
States of emergency have been declared in many Pacific island nations in response to the COVID-19 pandemic, with measures including curfews, border closures, internal travel restrictions and compulsory quarantine and self-isolation periods. For the most part, quick and decisive actions from our governments has borne fruit; many Pacific island nations have been spared from local COVID cases for now, and in others, the spread has been quickly contained . They should be congratulated for that.
However some of these government-mandated measures have been challenged (with varying results), for example in courts in Guam, French Polynesia and Fiji.
Meanwhile, there have been challenges to the notions of media freedom in several jurisdictions.
To scrutinise, question and unpack government policies, and the rationale behind them, is the job of the media. They’re not acting this way because they are evil, but because the ability to question, debate and understand is integral to a healthily functioning society.