The Reserve Bank of Fiji (RBF) has today confirmed Fiji's sure path to an economic recession, as all sectors of the economy brace for the harsh impact of the current coronavirus pandemic.
"Following almost a decade of positive economic growth, the domestic economy is now forecast to fall into a recession. The magnitude of the contraction depends on how long the pandemic lasts and the extent of local contagion," RBF stated in its March Economic Review, released today.
"The main transmission will be through the tourism industry and cessation of economic activity due to appropriate precautionary measures taken by the Government and the general population. The halt in tourism activity and the general decline in incomes and consumption appetite will also negatively affect Government revenue and have spillover effects to all other sectors in the economy."
A recession is generally defined as two successive quarters (6 months) of economic decline and weak GDP growth.
Fiji's predicament mirrors the trend in most countries around the world, with the pandemic sparing no one including the global economy, which itself is on life support in the form of financial response packages doled out by all affected governments as well as the world's bilateral and multilateral financial institutions.
This week, the International Monetary Fund (IMF), whose membership of189 countries includes Fiji, issued a bleak prognosis on the health of the world's economy after virtual meetings with leaders of the G-20.
"It is now clear that we have entered a recession as bad or worse than in 2009. We do project recovery in 2021," said IMF's managing director Kristalina Georgieva in a telecast press briefing.
"In fact, there may be a sizeable rebound, but only if we succeed with containing the virus everywhere and prevent liquidity problems from becoming a solvency issue."
The IMF, she said, had so far received 81 requests - an unprecedented number - from member countries for emergency funding.
Fiji's economy, initially forecast to grow by one percent this year, is now estimated to contract by 4.3 percent as a result of the coronavirus pandemic.
By Anish Chand
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.
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.
“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.”