Bula and a warm welcome to you all to our third strategic planning workshop for 2019-2024.
I wish to begin by sharing this quote by Audrey Hepburn, “Nothing is impossible – the word itself says, I’m possible”. This quote has been my source of inspiration and I believe it will be the cornerstone of our deliberations over the course of this workshop.
One of the things that gave me sleepless nights recently, was not the devaluation rumour or the level of bank liquidity, but rather my thoughts of what to say today. Unfortunately, my thoughts were not finding the right words.
What we will discuss in the next 2 days will shape the way OUR Bank will operate over the next 5 years. This, therefore means that WE, yes US, will chart the course of where OUR Bank will head. How and where we head, or how well we do it will affect the lives of close to one million people; not only over the next five years, but also many generations after that.
We all agree we are here together to plan a new strategic direction. If we are successful in charting an innovative and exciting new strategic direction, then not only will OUR Bank succeed as an institution, Fiji will also prosper. I am confident that all of us present here today want to see Fiji continue to prosper and succeed.
I have been impressed with the pre-work and thoughts that have been put into charting this new direction. Internally, comprehensive consultations with staff at all levels of the Bank were conducted.
The Leadership Team has had several sessions to discuss our strategic pathway going forward. Externally, a survey was sent out to more than 150 key stakeholders. We will share the results of this survey with you today.
Given the wide consultative approach, I am confident that the new Strategic Plan will express the future aspirations of all the Bank’s stakeholders. It will be a framework through which we will apply our resources and strength that will enable us to exploit the available opportunities and confront threats that may face us in our quest to achieve our vision.
Reflection: A Look Back
First Strategic Plan 2009-2013
Let me start with some reflections, which I find useful when reviewing the past, and using it as a benchmark to plan for the future.
It has been slightly over 10 years since we had our first interactive planning workshop in Pacific Harbour. I remember the time fondly as my son was born around the time. Some of you might recall Armaan was born prematurely at only 7 months. He was just 1.7kg. There are some very interesting analogies between Armaan and the Bank that I will share with you.
So reflecting back in time, Governor Narube laid the platform and the challenges for us at our first strategic planning workshop with his presentation on the theme “Managing Central Banks of Tomorrow”. Looking back, I remember thinking that he was either related to Nostradamus or had a crystal ball. He talked about the “new normal”, “managing central banks in the 21st century through leading or influencing”. Governor Narube also spoke on the 3rd age of central banks where national boundaries would be blurred, national currencies would integrate, and he spoke of turbulence. He was right – until President Trump got elected.
Governor Narube liked to spend a lot of time highlighting threats. At the top of his list of threats, was the relationship with Government or fiscal policy. He spoke at length on the growing influence and stature of central banks. I still strongly believe Governor Narube took RBF to great heights.
Just like my pre-mature and underweight son, the economy was weak in 2008, having contracted the year before. The forecast was slow and weak growth. Foreign reserves were at critical levels with less than 2 months of import cover, despite the drawdown of US$150m in global bonds. Bank liquidity had just about evaporated. Inflation was 6.9% and NPLs was at 3.0%. Business confidence was low. The Bank had just adopted some non-conventional central bank tools and the GFC was about to unfold.
Second Strategic Plan 2014-2018
Our second strategic plan was held at the new and beautiful Natadola Intercontinental Hotel in 2013. By now, Armaan was 5. No one would have believed he was born pre-mature. Healthy, strong, and full of energy. My wife and I wished that he remained 5 forever.
Similarly, there was a notable turnaround in the economy. We were firmly on track for 4 consecutive years of economic growth and the outlook was very promising. Foreign reserves had risen to a new record of just under $1.8 billion, sufficient to cover more than 6 months of imports. Business confidence was high, inflation was manageable, bank liquidity was in excess of $700 million and non- performing loans were declining.
Our external stakeholder at that workshop was the IMF resident representative, Mr Yongzheng Yang. He spoke on the lessons of the GFC for central banks in the Pacific. I wish to highlight the 3 key points from his presentation which I strongly feel are still very pertinent to us today:
(i) central bank transparency;
(ii) communication strategy – growing demand for CBs to explain their actions; and
(iii) public debt and central bank independence.
Some of you might recall in the current Strategic Plan that we committed to expanding into the non-conventional roles of central banks as reflected by recent international trends. Such roles included the promotion of financial inclusion initiatives and stepping up our responsibility of ensuring increased access to financial services, and effective consumer protection, for all users of financial services in Fiji.
As an organisation, I have to say I am very pleased with our performance between 2014 – 2018. I can say with confidence that we have achieved great things in the last five years. Our accommodative monetary policy stance contributed to the continuation of the sustained economic growth never before seen in our history. Furthermore, external stability was preserved with foreign reserves hitting a record high of $2.4 billion in 2017 while price stability was well anchored prior to Tropical Cyclone Winston. These factors remain at acceptable levels despite the supply-side shocks to the economy following the recent spate of natural disasters.
The financial system with assets currently above $20 billion continued to grow and remain stable with prudential measures at satisfactory levels. On the unconventional side, we reached out to the unbanked segment of our population and have performed very well relative to our goals. The financial performance of the Bank was also positive during this period as we recorded operating profits totaling over $130 million. On this note, I wish to extend my sincere appreciation to all of you for your perseverance in ensuring that we maintain quality deliverables.
We therefore have evolved as an institution. We have successfully achieved most of the goals we had set for ourselves in the last 5 years. We have seen changes in leadership, in objectives, in processes, but most importantly, in expectations.
The Next Five Years – Third Strategic Plan 2019-2024
Fast forward to today, and we are again planning for the next five years. This workshop gives us an opportunity to pause and ask some critical questions: “what impact have we made in the economy, in our people, in our institution, and in our Team? Are we satisfied with the impact we have made? Could we have done better?”
If we have not thought collectively as a team before, then this next one and half days will give us an opportunity to do just that.
My son will be 11 soon and I have heard that teen years are what parents dread the most. As our children’s characters develop, so do their demands. Armaan wants to learn how to drive and has been asking when he can have his own car. He is firmly entrenched in modern social media trends, using video editing software to make and upload videos. We hear him having long chats with his friends, but when we ask him what they talked about, he will say, “nothing!” Like most kids his age, Armaan is also a magnet for the latest electronic gadgets. He has very specific ideas about his hair style and clothes.
Oh, yes! He says he hates girls, but I think that’s about to change soon. What I foresee is that the peaceful years of our lives are about to undergo a big change.
I can therefore in a similar fashion, clearly link the current developments in my personal life back to our current situation at the Bank, about how we are managing the economy and the financial system, and in that the honeymoon years may be slowly coming to an end. After 9 years of consecutive growth, record reserves and liquidity, low NPLs, and a long sustained low interest rate environment, I get the sense of strong headwinds before us. I envision a cold winter or a dry spell.
When I look at the crystal ball, I see a world that will be divided between those who will guard their national interest over those that will promote free trade. Small, less developed countries like Fiji will be sandwiched in between.
Climate change will become an even bigger issue, but lip service will continue to be provided by those that can make the biggest difference. Globally, India will become a more dominant economic leader while the European Union will likely see more exits after Brexit.
While the global financial markets may integrate further and crypto currencies such as Bitcoin use may become more prevalent, we will remain guarded. While we would prefer to exit our non-traditional central bank instruments, they may remain prevalent given the challenges. While we may promote a cashless society, cash will remain king, at least for the next 5 years. While we may increase transparency and awareness on our role and policies, I expect more criticism. I expect Our Bank to play a more dominant role in extinguishing the fires and sowing the seeds of growth instead, and why I believe this planning session we will have is important.
Why is Planning Important?
Before I share my thoughts on what we should focus on in the next five years, I wish to briefly highlight the importance of planning.
As the Deputy Governor said during our pre-work session on 14 February, “Failing to plan is planning to fail”. President Roosevelt said that “It takes as much energy to wish as it does to plan”. Sun Tze said, “Plan for what is difficult while it is easy, do what is great while it is small”, and I was also reminded that it wasn’t raining when Noah built the ark.
There is also this famous quote which states that “perfect moves hold you back from moves at all”. Facebook founder Mark Zuckerberg aptly said that “The biggest risk is not taking any risk in a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
As we all know, strategic planning for any organisation provides the framework that facilitates efficient and sustainable utilisation of resources in the delivery of the core business of an organization. It’s really a fancy word for long term planning of making choices and trade-offs and putting them into action.
While we have all recognize that planning is important in everything we do, it is also crucial when we seek to do more, to do better, to meet increased expectations that come our way. I therefore wish to move on to the key themes that I propose as food for thought in starting our session today, and I have titled these themes under the line of “Rising above the Bar of Expectations.”
Rising Above the Bar of Expectations
I am of the view that as an institution, we must continue to transition. We have yet to reach the level that we are capable of, regarding our performance and impact. Therefore, I am proposing the following 6 highly relevant themes for the next 1 ½ days, as we embark on our discussions to reach consensus on the way forward for the Bank over the next 5 years.
The themes are based on my personal and holistic observations of our current situation. From the lessons for us central bankers learnt at the 2008 GFC, to the current debate on liquidity happening now in our own backyard. What is clear is that shifts in policy and expectations will drive us to change. It is no light matter that the bar of expectations has therefore risen significantly, and there is no option for us, but to perform better than before, to stay above the curve.
1. Passion for our Work
We must approach the work that we do at the Bank with renewed passion. You only have to see the images of Fijian spectators in Seven’s tournaments to realize the passion that our people have for the sport. Ask yourselves – Do you have the same level of passion for the work that we have been called to do at the Bank?
Do you realise the impact we make on all Fijians? Do you take pride in the knowledge that without us, our families and friends may not be able to live the lives that they have?
I have heard someone say, “Working hard for something we don’t care about is called stress. Working hard for something we love is called passion”. I sincerely hope all of us in this room today, fall in the second category.
Our people are our greatest asset. For me, this is not just a catch-phrase when I think about the great team that the RBF is blessed with, but we need to be united, and be a drilled team like our rugby sevens team.
The saying that “Two ants do not fail to pull one grasshopper” is true, and in my view, that is what team RBF is all about.
3. Leadership with Fervour
Leadership has the capacity to translate vision into reality. It is a quality that is the driving force of success whose power lies largely in the ability of leaders to bestow their dreams to people, as well as master their own and other people’s emotions. Think about it!
The respect we receive for RBF as an institution should not be taken for granted. We have a duty to always protect and build on it.
As we embark on our discussions today and tomorrow, I propose that as leaders of the Bank, we must seek to establish unity of purpose and direction for our organisation.
On this issue of leadership, I find motivation from another saying that goes, “An army of sheep led by a lion can defeat an army of lions led by a sheep”. We must be fearless leaders.
4. Working Smarter and Raising our Analytical Competence
At the RBF, we have amongst us one of the highest levels of critical institutional knowledge on the development of the Fijian economy in the last 40 years.
There were some unexpected developments in the last 10 years, but we were able to steer well against them. We have supported growth through our accommodative monetary policy stance and ensured that risks arising from this sustained accommodative stance are managed. When faced with some of the worst disasters faced by our nation, we assisted in economic recovery. We have also internally buffered against political influences which could have negatively impacted the stability of the institution.
But that was the past. The future will come with more encounters and challenges. We must up our game! We must ensure we remain relevant. Fresh thinking is essential. We need to be bold, think outside the box and be open minded. We need to challenge systems and processes and challenge our own selves. We have to work smarter. Our analytical competence is what will set us different. I challenge you all to be visionary thinkers and come up with new ideas.
I strongly believe in “Those who know WHAT they do, tend to work harder. Those who know WHY, tend to work smarter”. Know your job, know your team. Learn why, if you don’t know already!
5. Effective Communication
Communication for central banks has become as important as financial system oversight. Commentators have highlighted in recent times the need for central bank Governors to not only be sharp economists, but also media-savvy.
Many of you who know me, know that I would prefer to remain the sharp economist. But I have learned in the past few weeks the importance of also being media-savvy in my role as Governor. Earlier this week, I had to call for a media briefing to explain about the liquidity issue that has been bouncing around in the public domain over the past couple of weeks. In trying to find ways to address the issue that was being wrongly projected, I held the view that if we were able to explain our liquidity stance clearly and especially to the media, then the media outlets should be able to assist us in communicating our liquidity stance to the public. I am happy to say that so far, it appears the media-savvy strategy has worked.
However, there is more we need to do in this space and I welcome suggestions during the workshop, on initiatives that we can agree on, in terms of strengthening our communications.
Nelson Mandela once famously said, “If you talk to a man in a language he understands, it goes to his head. If you talk to a man in his language, it goes to his heart”.
7. Build for the Future
Another good saying that I love to ponder on is, “Someone sitting in the shade today is because someone planted a tree a long time ago”.
We are truly blessed to be part of this great institution we call RBF. To me personally, I believe it is a calling for us to make a difference for our people. Our responsibility is great, but I am confident that within this room, we have the team that can “plant enough trees” so that every Fijian can sit and enjoy under a shade of economic prosperity for a long time to come.
I am aware of some exciting suggestions regarding our proposed vision and mission, evolving out of our discussions in the last few weeks. With all that we have been discussing prior to this workshop, and the 6 points I have highlighted above, one thing is certain, we must review whether we are still “fit for purpose”. If we feel we are not, then we have to ask the question “what changes are necessary for us as an institution? As a Team?
Earlier on, I said that in my view, we are still transitioning. This transitioning may be a good thing, because it allows us the chance for a good reality check, a wake-up call. The results of the Stakeholder Perception Survey should provide us some insights which may require revisiting the way we conduct our roles and how we communicate.
Fiji is changing as a nation, the world we operate in, is changing constantly, and if we as an institution want to stay ahead of the curve, then we must ensure that we are fit for the purpose we have been called to. We must possess a strong motivation to move forward.
These goals will require increased passion in our work, teamwork, working smarter, raising our analytical competence, effective communication and unity of purpose. In other words, we need to lead with fervour.
Let me conclude by saying that I wish us a successful workshop and look forward to the deliberations we will have, with the goal that we walk away from this workshop, re-energised and invigorated to meet the high expectations that will come our way in the next 5 years.