'FNPF symposium another farce'
Saturday, May 7, 2011
By Professor Wadan Narsey
The Bainimarama Military Regime will this week announce more nails for our FNPF coffin.
While they ruthlessly maintain a draconian media censorship, Frank Bainimarama and Aiyaz Sayed Khaiyum will organize a charade of a “Symposium on The Future of FNPF”.
There will be a panel discussion by “experts”, discussing recommendations by unknown and unaccountable consultants from IMF, World Bank, ILO, etc advocating changes to the FNPF structure, operations and pension rates.
The symposium will be used to ratify that the FNPF is not financially sustainable at the current pension rate of 15% (single) and must be reduced by a massive 40% to 9% (single).
It will also be encouraged to conclude that the contribution rate by employees should be increased from the current 16% of your wages and salary to perhaps 20%, as other model countries in the world such as Singapore practice.
But this “symposium” will all be a big farce, a pretence at “public consultation”, much like the Charter Charade organized by Bainimarama, John Samy and Petero Mataca.
We all know the Bainimarama Regime will make all the decisions.
The Bainimarama Regime will continue to hide all the reports that would reveal that they are themselves responsible for a large part of the mess that the FNPF is currently in.
The Bainimarama Regime will continue to milk the FNPF cow, which, with increased contributions and reduced payouts, will give them even more of our savings to use ad misuse, however they wish.
You, the contributors to FNPF and the pensioners of FNPF, will have no choice in the matter.
With media censorship, you can't even publicly and freely discuss these massive changes to your pension fund.
But you could go and speak your mind at the Bainimarama/Khaiyum Symposium Charade this coming week. Know the facts before you go.
Why the reduction in pension rate?
For several years now, there have been studies done by IMF, World Bank, ILO etc that argued that FNPF could not sustain the 15% single pension rate over the long term. And given the long term declining performance of the FNPF investments, the 15% pension rate may have been a little on the high side. But we don’t know why.
For every FNPF management team and board for the last fifteen years (including the appointees by Rabuka, Chaudhry, Qarase and Bainimarama), have arrogantly refused to make these studies public.
The public will not know whether the data and the analysis are accurate, and whether the recommendations are justified.
But they should know two reasons why the pension rates are being recommended to go down as low as 9%: first, the economic stagnation over the last four years directly caused by the Bainimarama coup of 200; and second, FNPF’s disastrous investments and board decisions during the last four years of Bainimarama’s rule.
Bainimarama and his military officers, and all the coup collaborators, are partly to blame, for the planned reduction in pension rates.
When Bainimarama and his Fiji Military Forces (our former security guards) treasonously took over the country in 2006, they also took over the Fiji National Provident Fund.
Without any reference to you, the owners of the FNPF, they changed the senior management and the board. They appointed new board members to all the FNPF subsidiaries like ATH and its subsidiary companies.
Some of these new board members made decisions which led to financial disasters such as the lost money through unwise loans and expenditure decisions at Natadola (more than $300 million?), Momi ($80 million?), GPH ($30 million?), FSC ($100 million?) and potentially other disasters such as at Tappoo City ($30 million?) and bad loans forced upon entities such as FDB.
How much is the Bainimarama Regime to blame? We don’t know because they won’t release the reports on these financial disasters.
But we know for sure, the Bainimarama Military Regime has helped to destroy the sugar industry by turning down $300 million of EU aid available in 2006 for the sugar industry reform and restructuring, and badly managing an $100 million Indian loan for FSC mill refit, which resulted in even lower milling efficiency.
We know that the Bainimarama regime has for five years freely run massive budget deficits because of huge over-expenditure on the military itself, all funded by increasing the Public Debt, largely financed with enforced loans from FNPF at low rates of interest (around 5% at the margin).
We also know that a few months ago, Bainimarama and Khaiyum, with the irresponsible complicity of ANZ, showed their financial skills by proudly borrowing $500 million in foreign bonds at 9% while turning down an IMF loan at 2% (Yang, the IMF rep in Fiji stated there were very few conditions).
We know that with investments drying up because of Bainimarama’s arbitrary Military Decrees, there has been minimal economic growth, minimal job creation, minimal new contributors to the FNPF.
The lack of economic growth has also meant that there are few bankable projects in the private sector for FNPF to lend to.
Instead, the FNPF has been forced by the Reserve Bank to bring back its income earning foreign investments, with the lost income going through the RBF into the control of the Military Government.
On the other side, the outgoings from the FNPF have been increasing not only because of pension or lump sums to be paid to those retiring, but also because of withdrawals by members for education and health reasons, due to increased hardship.
For many years the FNPF Annual Report used to state that their target earnings rate was 2 percentage points above the rate of inflation.
That statement is not made any more in the FNPF Annual Reports, because they have failed to achieve their target (what a pathetic management tactic: when you fail to achieve your KPIs, get rid of your KPIs!).
Indeed, for this year, the rate of inflation may be as high as 7% while the FNPF average return is less than 6%. Our FNPF savings are going backwards.
As we have been warning since 2006, the FNPF is in deep trouble.
No transparency, no accountability
The FNPF Annual Reports, signed by the FNPF Board and senior management all claim to be transparent and accountable to the FNPF Members.
What a pack of lies.
For more than three years now, I have asked FNPF management to make available the reports by WB, IMF, ILO and other recent consultants, or the recent reports on the financial mismanagement of the investments at Natadola and Momi.
They have all bluntly refused- they are simply afraid to lose their jobs.
The Bainimarama/Khaiyum Regime will not tolerate any transparency or accountability of the FNPF to the public, whatever are the lies they propagate in their People’s Charter.
Just as they refuse to make public the Annual Auditor General’s Reports on the military government’s expenditure and revenues over the last five years; or to allow an audit of the Regimental Funds; or to explain why they are paying themselves more than half a million in salaries each through a private accounting firm.
Coup costs usually out of sight
When an economy suffers because of a military coup, it is difficult to identify and quantify the costs, especially when the economy recovers pretty quickly, as in 1987 and 2000.
But the economy has not recovered after the 2006 coup. Our 2011 GDP, even if we to manage the projected 2.8% growth this year, will just about recover to our GDP in 2006.
We have therefore lost four years of economic growth, costing us anywhere between $1 billion to $2 billion, not even including the huge losses in property values.
The banks know that many businesses, big and small, are struggling; FIRCA is struggling to increase revenues, despite the increase in VAT; many government ministries like education and health are struggling to maintain their budgets; and there is little money available to fix up roads, water and sewerage.
Some may point to the increased numbers of beggars in the streets, despite official efforts to keep them out of sight; or the increased numbers of suicides and attempted suicides, or increased incidence of mental health problems.
But these costs are very difficult to quantify and relate to the 2006 coup.
But costs to FNPF are now clear
This week, we FNPF contributors and pensioners (including coup supporters) will see very clearly how the military coup by Bainimarama and his supporters, are harming us.
Single pension rates will be reduced from 15% to 9%; double pension rates will be reduced from 12% to 7%.
This reduction in pensions will harm all civil servants, including all the treasonous military officers and soldiers who have conveniently forgotten their oaths of office, and blindly supported Bainimarama and his coup while enjoying their ill-gotten gains.
Existing pensioners (including coup supporters) will also know that their current pension rates will be reduced and capped: they can weep and wail all they like that FNPF signed and sealed a legal agreement with them, when they retired.
But evil people who can treasonously remove a lawfully elected government can also change the conditions of any legal contract: all they need is another military decree signed by the illegal immoral Military President, who many times has sworn sacred oaths on the Bible, to protect the people of Fiji.
We should know by now, that our basic human rights, such as the protection by law, freedom of speech and assembly, all mean nothing to Bainimarama, Khaiyum, Nailitikau, the military officers and illegal ministers in an illegal Military Government.
We should know by now that our basic human rights also mean nothing to the dozens of prominent businessmen, clergy, professionals, social leaders, and all the coup supporters and collaborators who have helped to legitimate and keep the Bainimarama Regime in power since 2006.
We should known by now that the softening by our traditional donors and Australian “think tanks” towards the Bainimarama Regime is driven by their worries about China displacing them in the Pacific, not so much our own welfare.
We are all on our own. We can watch our FNPF be gutted.
Do we owners of FNPF, who have never protested against this evil regime, we who have continued to socialize and tolerate all the coup collaborators and supporters, deserve what we get?
Adam Smith’s selfishness not good for Fiji
In economics, there has been a very strong idea, originating from Adam Smith more than two hundred years ago, that if every individual acted selfishly in his own self interest, the free market economy will perform efficiently, to the ultimate benefit of everyone in the economy.
This principle is totally wrong in Fiji’s politics and society today.
It is abundantly clear that many of our people understand the evil consequences of this Bainimarama coup for Fiji and its people.
It is clear that they say nothing and do nothing, because they think it is in their self-interest not to do so, in case they are personally victimized by the Bainimarama regime.
But if we all behave selfishly and refuse to oppose the treasonous Bainimarama coup; if all our military and police officers accept and obey their treasonous, illegal and immoral superiors; if we all live in our business, professional, religious, social, and sports boxes and refuse to confront and ostracize the coup supporters and collaborators amongst us; then the resulting Fiji is going to be a nightmare for our citizens, especially the poorest amongst us.
Adam Smith’s advocacy of individual selfishness is proving to be disastrous for our FNPF, and for Fiji.
Who knows? Perhaps even at this late stage in our demise as a free people, we might want to go to the FNPF Symposium Charade being organised by the Bainimarama/Khaiyum Regime and:
1) Demand the public release of all the reports by IMF, WB, ILO and recent independent consultants;
2) Demand the release of all the reports on the investigation into the investments at Natadola, Momi, etc
3) Demand that the majority of the FNPF Board Members must be democratically elected by the current FNPF contributors and with pensioners having separate elected representation.
4) Demand that the Chairman of the Board must be from these elected Members and definitely not some foreigner as currently.
5) Demand that any decision on changes to the FNPF must be made by the elected Board and not the current Board and Management.
6) Demand that FNPF must be allowed to invest as much of its funds abroad as is prudently advisable and that RBF must recompense FNPF for all the lost earnings because of foreign investments brought back.
7) Demand that the FNPF management swear oaths of allegiance to the real owners of the Fund- you the contributors and the pensioners, and not to a treasonous Military Government;
Also part of our struggle to regain our basic human rights, also
8) Publish the full list of coup collaborators and supporters in Fiji and abroad, so that all FNPF contributors and pensioners can see who are collectively responsible, with Bainimarama and Khaiyum, for the massive blows to our pension fund;
9) Start teaching our children to not take part in the daily charade by treasonous people illegally pretending to be Prime Ministers, Ministers, Attorney General, President, and First Ladies, etc.
10) Call on Australia and NZ to take sanctions against all their citizens who have supported the treasonous military coup in Fiji and the continuing plunder of the tax-payers of Fiji, and the gutting of our FNPF.
11) Appeal to those current and former military officers who have retained any vestige of allegiance to their military oaths, honor, ethics, and patriotism, to call on Bainimarama and his ministers to resign from government and give it back to civilian rule, immediately, not in 2014.
If we continue to remain docile and quiet under oppression, we deserve everything we get, while condemning our children to a bleak future.
May 07, 2011
'FNPF symposium another farce' - Professor Wadan Narsey
We are compelled to reproduce here, compliments of our fellow bloggers at C4.5, another outstanding point of view by Prof Narsey on the upcoming FNPF charade of an exercise that we also noted with interest.