I AM very positive about the future of the Pacific. The Melanesian bloc in particular holds potential to help the Pacific grow in leaps and bounds.
I make this assertion from the perspective of a bank that has had a presence in the Pacific for more than 130 years; since 1880 in Fiji; 1910 in Papua New Guinea; 1966 in the Solomon Islands; 1971 in Vanuatu; and with a Representative Office in Noumea, New Caledonia, opened in 2005.
We continue to invest and grow in the Pacific as part of our super regional strategy. ANZ now has a presence in 33 countries in Australia, New Zealand, Asia, the Pacific, Europe and America – including 12 in the Pacific and 15 in Asia.
Our investment in the region is substantial and we are very proud of the role we have played in supporting the Pacific’s growth. We now employ some 2,000 people of diverse nationalities, backgrounds and skills in the region.
Today, many of those on my Pacific and Fiji Leadership Teams are Pacific nationals and this is a testament to our commitment to growing local talent.
Our confidence and commitment to the region was further demonstrated in the relocation of ANZ’s Pacific Headquarters from our global Headquarters in Melbourne to Suva last year.
This moved an important decision-making resource closer to our customers, to really connect on the ground and to make it more feasible to connect across regions.
Connectivity is at the heart of my message. Through connectivity – across geographies and across regions, in development across sectors – we will find the opportunities in the very real challenges that we face on the ground.
We must chase those opportunities, such as intra-regional and international trade opportunities, with much rigor.
ANZ strategically supports key areas of natural resources, infrastructure and agriculture, with a selective focus on tourism, in certain Pacific countries, the predominant of which is Fiji.
We do so because we appreciate the interrelated nature of these sectors and because they are the key to the longer-term growth prospects of the private sector in the region.
In my career as an international banker, I have been fortunate to also live and work in Papua New Guinea, the Middle East, North America, Southern Africa, West Africa, Thailand, Sri Lanka, Malaysia and Singapore.
I indeed appreciate the varied states of economic realities across the globe and constraints to growth and development.
In the Pacific, I am often inclined to draw comparisons to my time in Africa, where in the 90s, I recall nations rich in natural resources, yet cash poor.
But theirs is not a tale of demise. Over a decade of commitment to good governance and strong leadership, improved political and macro-economic stability and microeconomic reforms, such as privatisation of State Owned Enterprises, reducing trade barriers, reducing corporate taxes, strengthening regulatory and legal systems; these initiatives helped private sector enterprises to emerge.
I think the Pacific is no different, and we need to look at replicating some of these models to attain further progress.
Melanesian nations are at various stages of economic reform. I would urge continued efforts and persistence in this area. Public sector reforms take time and deliberate actions to effect. And these efforts must be supported by strong, vibrant and competitive private sectors.
The Pacific’s future – and particularly that of Melanesian Spearhead Group (MSG) states – is going to be increasingly connected with Asia.
MSG nations are leading the way in supporting open markets and strengthened trade and investment flows.
To be even more successful, our greater region will need to embrace the opportunities to build long-term trade and investment links with each other and to seize the opportunities presented by Asia’s economic rise.
This connectivity, I believe, will help secure many opportunities for Pacific in the Asian Century.
At a meeting of Pacific and China leaders that I attended last year, the People’s Republic of China committed to the provision of USD1bn in soft loans and an additional USD1bn in special loans for infrastructure construction to help the development of Pacific island nations. This significant commitment will further forge the way ahead to connect Asia and the Pacific in the future.
Unlocking the Renminbi
From our own experience at ANZ, we are seeing growing Chinese investment in the region, as well as Pacific-based companies taking advantage of deepening trade relationships to provide China-sourced products and services to their customers.
Some recent examples include MCC Ramu Nico’s USD1.4 billion investment in a nickel mine in PNG, and China Harbour’s contract work to develop the port in Lae.
In reinforcing ANZ’s connectivity between the Pacific and China, last year we became the first bank in the Pacific to provide our customers the ability to trade directly in Renminbi, and vice versa.
Since launching our Renminbi capability in Fiji, PNG and Vanuatu, soon to roll out to the Solomon Islands, we have conducted increasing numbers of transactions in the currency – supporting our customers transact in both directions.
Opportunity in PNG
ANZ launched a major report on PNG’s future last October, highlighting the significant potential that exists for the nation to benefit from Asia’s growing demand for natural resources and agricultural commodities.
The ANZ insight report, “Bold Thinking: Imagining PNG in the Asian Century”, highlights that PNG’s resources sector has the potential to grow export revenues at least fourfold to US$23 billion per annum by 2030.
While these estimates are only broadly indicative, they imply capital investment in PNG of around US$112 billion between now and 2030 … and the creation of more than 100,000 new jobs in mining, energy and support services.
These significant developments are clearly presenting exciting opportunities for the region and are leading to deeper relationships.
Opportunity in ICT connectivity – Vanuatu example
ANZ’s finance specialists in Vanuatu and Singapore last year helped partly fund Vanuatu-based telecommunications company, Interchange, to deploy Vanuatu’s first international submarine cable system from Vanuatu to Fiji.
The 1,238km-long Interchange cable now links Vanuatu directly to the high capacity Southern Cross cable which traverses the Pacific to connect Australia, NZ and the USA.
The USD30m project involves the installation of a new cable system that will provide data transfer capability that is 200 times Vanuatu’s previous capacity.
These sorts of developments open new frontiers for somewhere like Vanuatu, including by driving down data transfer costs and encouraging new business.
Looking ahead in 2014
Political stability will be key to the region’s prosperity over the coming year. I am only optimistic in this regard.
The private sector must continue to drive growth and support Government-led priorities for a truly sustainable future.
It’s an elections year across the Pacific, including for Fiji, Solomon Islands, Tonga, New Caledonia. Political stability is absolutely crucial in supporting to investor confidence.
Our customers continue to be central to our priorities in the Pacific this year, such as through insight on Pacific – Asia – Aus – NZ trade flows, and by connecting our Retail, Commercial, Corporate & Institutional customers and help them do business.
We will also continue to drive and invest in our work to reach more of the unbanked Pacific population and promoting financial inclusion in the Pacific.
We strongly believe in this investment, particularly in the Pacific where currently around 75 percent of the population is without access to financial services.
We launched our mobile phone banking platform, ANZ goMoney, in Papua New Guinea, Samoa and Solomon Islands in 2013 with a primary focus on reaching the unbanked.
We will be launching ANZ goMoney in Vanuatu later this year.
To complement this, MoneyMinded Pacific, our flagship financial literacy program, has been successfully delivered to some 6000 people across the Pacific since it was introduced in 2010, and this important work will continue.
NOTE: Vishnu Mohan is a senior, international banker with more than 30 years experience in Corporate and Institutional Banking and Consumer Banking, covering the Middle East, North America, Southern Africa, West Africa, Thailand, Sri Lanka, Malaysia and Singapore. In his current role of ANZ CEO Pacific & Fiji, based at the ANZ Pacific Headquarters in Suva, Fiji, he has oversight responsibility for ANZ’s 12 Pacific markets, and also looks after Fiji as country CEO. Before this role he lived and worked for three years in PNG as ANZ CEO PNG and Northwest Pacific Region.
By VISHNU MOHAN
ANZ CEO Pacific & CEO Fiji