" Foreign companies

don't make excess profits in Fiji”

Prom a Suva correspondent Director of the New Zealand Institute of Economic Research, Mr. J. W. Rowe, believes there is no tendency towards excess

profits by overseas companies

which have invested in Fiji.

During a visit to Fiji in April, Mr.

Rowe, who is visiting Professor of Economics at the University of the South Pacific, estimated that foreign investors received a return after tax of roughly 9 per cent, on the estimated SIOO million they had in vested in Fiji.

This was a normal rate of return on foreign investment, he said.

Official estimates put the current annual in-flow of private capital at about $1.5 million, but he believed the real figure was at least $5 million.

This disparity was because there was not enough information available from the Ministry of Finance and the banks upon which to base a better official estimate.

So far there appeared to be no significant outflow of capital from Fiji and he could find no evidence of any general tendency towards excess profits by overseas companies.

No profit control

“The best sort of investor is one who wants security against national isation or profit control and the ability to remit capital and profits without trouble, but who supplies most of the capital himself and who does not need special tax incentives,”

Mr. Rowe said in an address to the Fiji Institute of Management.

He said he thought tax incentives were over-generous when applied to hotel construction in Fiji.

He suggested too that details of business done in Fiji by overseas companies should be published locally in the interest of better rela tions between the companies and the Fiji public.

He suggested that Fiji should legislate to require the publication of annual accounts by all subsidiaries and branches of overseas companies.

“It would also be a good idea to require disclosure to the appropriate authority of all transactions in Fiji real estate or other assets in Fiji and require such transactions to be settled through the banking system.”