Griffith Business School is playing a key role in the fiscal policy development of the South Pacific Central Banks, with an impressive research program involving the highest standards of academic rigor from multiple Australia Awards Fellowships, 15 joint working papers, journal publications, symposium, seminars and conference, that are all aimed at building research capacity for the region’s key policy makers.
The South Pacific Central Banks come from a region to the North-East of Australia and included in the program are the Reserve Bank of Fiji (RBF), Bank of Papua New Guinea (BPNG), Reserve Bank of Vanuatu (RBV), and Central Bank of Solomon Islands (CBSI). In addition, the countries of Samoa and Tonga are from the region and it’s anticipated they will seek to become involved in the future.
The driving force behind this successful research program is Dr Parmendra Sharma from the Department of Accounting, Finance and Economics and a member of Griffith Asia Institute. Dr Sharma is Griffith’s banking and finance specialist in the area of financial reform and development, with a special focus on the South Pacific. He was formerly a Fijian citizen working with the RBF before joining Griffith and he has a deep understanding of the region.
“The DFAT Fellowships and the conference that we are planning in Fiji in December this year, are part of a bigger program we have with the South Pacific Central Banks,” said Dr Sharma.
“The partners are the Central Banks in the Melanesian region, so they are the Reserve Bank of Fiji, Reserve Bank of Vanuatu, the Central Bank of Solomon Islands and the Bank of PNG. These are the main Central Banks currently in the program.”
Griffith University has been aligned globally since it’s inception in 1975, when it offered Australia’s first degrees in Asian studies. This is demonstrated in Griffith’s vision of, ‘Advancing innovative and socially responsible business education, scholarship and practice in Australia and the Asia Region.’ This global orientation is essential for preparing students to be global citizens with a focus on the Asia region, as outlined in Griffith Business School’s Strategic Plan.
“Griffith Business School is very keen on engagement and GAI has a mandate for engagement in the South Pacific and Asia of course. And also it comes from Griffith’s high-level goal to be a university of influence in the Asia Pacific, including the South Pacific,” said Dr Sharma.
“I am formerly from Fiji and I have worked for the RBF in the past. But that does not necessarily mean that because I was there, I was able to start and do all these things. It’s just that I was keen and passionate about the region.”
“I have always been interested to do something in the region, for the region, my PhD too was on a topic involving the South Pacific.”
Since the early days of intergovernmental collaboration in 1986, with the Melanesian Spearhead Group where heads of government agreed at their inaugural meeting that it was important to have aligned positions and solidarity in advancing regional issues of common interest, many leaders within Melanesia have tried to apply the principles of unification and now the South Pacific Central Bank Governors are exercising these principals for the economic benefit of the region.
The role of the Reserve Bank of Fiji (RBF) and other Central Banks is to promote monetary stability through low and stable inflation, to maintain sufficient level of foreign reserves and a stable and sound financial system. According to the RBF Annual Report 2016-17, the Bank undertakes this responsibility through the formulation and implementation of monetary policy. Their policy tools include the Overnight Policy Rate (OPR), Open Market Operations (OMO), Statutory Reserve Deposits, and other direct and indirect tools.
The Monetary Policy Statement from RBV indicates a similar position, The Reserve Bank of Vanuatu (RBV) is charged with the responsibility to formulate and implement monetary policy in Vanuatu. And based on their 2017 assessment, the Board resolved that maintaining an accommodative monetary policy stance was necessary in order to support growth in the country.
“Many of the policies the Central Banks have been developing so far have not been research based, they are aware and they fully recognise the importance of research. So we are helping them do that, and that is one reason why we’re doing this,” said Dr Sharma.
“Currently we have signed MOUs with the Central Banks of Fiji, Papua New Guinea, Solomon Islands and Vanuatu. This capacity building research program has been growing fast and it’s quite established now, as we’ve been going since 2014.”
“There is a lot of scope because we have a mutual interest. The Central Banks would like to change or enhance their research culture and environment, and we are here to help.”
The South Pacific Centre for Central Banking (SPCCB) was founded after the inaugural Central Banking Symposium hosted by Griffith University in 2016, where it was discussed to elevate the regions study group into an research Centre for Central Banking. The SPCCB was formed to bring together world class economic and finance experts, with a clear aim to help build capacity for research and policy formulation.
“Because our work was becoming more focussed on the Central Banks, we thought it might be useful to change the name and direction, and focus on creating a research Centre with the Central Banks,” said Dr Sharma.
“It has been well received by key finance sector stakeholders and the Australian Federal Government are supporting this, because they need to have as much presence as possible in the region to ensure financial, economic and security-stability.”
Building research capacity and skills within the South Pacific Central Bank’s leadership group is at the epicentre of this program and is a major objective, along with building ongoing linkages and networks between banking officials in the region.
“One good thing we are doing is helping build capacity for independent research and policy development, and monetary and financial stability are key responsibilities of the Central Banks,” said Dr Sharma.
“This is an apolitical program and a very different model of engaging with the Central Banks and with the policy makers and key policy institutions.”
A major component underpinning the program’s success is the Australia Award Fellowships training with Central Bank officials, that started back in 2015 with AAF – Developing capacity for research and policy formulation at the Reserve Bank (Fiji) and continued in 2018 with a second AAF – Developing research and policy formulation capacity at the Central Banks (Fiji, Vanuatu). The programs have provided training on evidence-based research techniques with the creation of five working papers, that may assist to shape future policy directions in the region.
“In this last Fellowship (2018) we had 8 Fellows involved in the training. But next time we are planning to get a few more, up to a dozen or so,” said Dr Sharma.
“The idea is for the Fellows who are trained here to provide mentoring and leadership to others when they go back. And there will be new ones and we are hoping they will be able to provide help to other Fellows.”
“Ultimately we would like these things to have implications for Policy, and that’s an area DFAT might also be interested in. So how these policies are going to be developed and of course these policies will have implications for the private sector, for economic growth and perhaps for Australia as well.”
Working research papers are an important tool in the Central Banks program that have advanced the development of participant’s research skills and capabilities, and strengthened their ability to collect and analyse data.
Some of the themes for the collection of working papers include financial inclusion, benchmarking financial development, micro finance, banking efficiency and macroeconomic management, along with other topic areas. To see the list of joint working papers and more information please visit the Centre’s website.
“An outcome of the Fellowships is working papers. All of these working papers are going to be developed into content that will be published as a working paper and journal article,” said Dr Sharma.
“And currently we have fifteen joint working papers going on with the Central Banks this year. These involve fourteen Griffith colleagues and thirty-six colleagues from the South Pacific Central Banks. These papers are being presented by the Central Bankers at seminars and then at a conference in December.”
“The working papers have given us opportunities to do all of these things. We started with one working paper from the Reserve Bank of Fiji, and then from there we have grown quickly and now a number of things are going on.”
“They cover very different themes, there are papers on micro-finance, on banking efficiency on banking sector performance, on financial inclusion, so they cover wide areas. All of these things of course will have some implications for economic development and the financial sector,” said Dr Sharma.
The research papers involve predominantly quantitative research from data collected from various sources, including the South Pacific Central Banks, and some projects will include surveys.
“Yes qualitative as well, but it is mostly quantitative research. So most of the research is based on data, the evidence is presented better and the conclusions come out better when based on data,” said Dr Sharma.
“The sources of data are the Central Banks and from other public sources like the World Development Bank, IMF and the Bureau of Statistics might be involved, but we don’t have to approach them directly as the Central Bankers are able to collect the data for us.”
The involvement of Griffith’s Department of Accounting, Finance and Economics and Griffith Asia Institute staff have been crucial to the success of the program, and their services have included mentoring Fellows, co-authoring joint working papers, and assisting to organise seminars and a conference.
“I would like to thank all my colleagues who have been involved with the South Pacific research and capacity building program over the past years, for their contributions,” said Dr Sharma.
The evolution of the South Pacific Central Banks program was given a boost by the Symposium in June 2016, where Deputy Governors from the Reserve Bank of Fiji, the Reserve Bank of Vanuatu, Bank of Papua New Guinea and the Central Bank of Solomon Islands, attended the event along with other officials from the region and a senior representative from the Reserve Bank of Australia.
“We started off with a South Pacific Studies Group, while Professor Andrew O’Neil was the director of Griffith Asia Institute. And then it developed into the South Pacific Centre for Central Banking, after the Symposium in 2016. That was one of the suggestions and recommendations that came out of the Symposium’s roundtable discussions,” said Dr Sharma.
“The RBA was represented by an official at the Symposium in 2016. And they are intent to become involved in the South Pacific Central Banks Research Conference later this year.”
In the months of June-July 2018, Griffith University will jointly with the central banks, hold a series of research seminars across the region to get feedback from colleagues on work in progress on the working papers.
A summary of these workshops and seminars with the Central Banks is listed below and on the Centre’s website:
- Joint Griffith-Reserve Bank of Fiji research seminar | 21 June 2018 | RBF, Suva
- Joint Griffith-Reserve Bank of Fiji-SLIC Affordable Housing workshop | 21 June 2018 | RBF, Suva
- Joint Griffith-Reserve Bank of Vanuatu research seminar | 25 June 2018 | RBV, Port Vila
- Joint Griffith-Central Bank of Solomon Islands research seminar | 3 July 2018 | CBSI, Honiara
- Joint Griffith-Bank of Papua New Guinea research seminar | 5 July 2018 | BPNG, Port Moresby
“These research papers are going to be presented as interim work-in-progress papers, at a number of seminars we are having in June and July at the Central Banks in the region,” said Dr Sharma.
“The seminars is where Fellows and the others that are jointly working on research papers are going to present their work in progress findings. Then after this more developed working papers will be presented at the conference at the end of the year.”
An important component of Dr Sharma’s capacity building program will be the inaugural South Pacific Central Banking Research Conference, that is on in December in Suva, Fiji. The two-day conference will for the first time bring together South Pacific central bank researchers to share with academics, policy makers, regulators, multilateral organisations, business leaders, civil society, from the South Pacific, Australasia and the wider Asia-Pacific region, current research on the region and to explore vital links between research and policy relating to central banking issues, including financial and private sectors and economic growth and development.
“The target for the Conference is around 100 people, we anticipate it might go just over that as there is a lot of positive discussion. That number is what we have in mind, that is our intention,” said Dr Sharma.
“It makes more sense to have the conference in the region, because the presenters are going to be the Central Bankers. The sponsors are going to come from the region and it’s a conference for the Central Banks with Griffith University, as an academic institution helping them to do this.”
“The stakeholders and those who are interested in our program include the Reserve Bank of Australia and others. We already have the Asian Development Bank (ADB) and International Monetary Fund (IMF) on-board making presentations at the conference, and we are talking to others.”
“We are exploring opportunities with the Commercial Banks, with ADB, DFAT, ASIC and APRA and others. The conference is in December, but all of these things are in the pipeline now and time moves fast,” said Dr Sharma.
Dr Sharma would like to expand the program to include other countries in the region, such as Samoa and Tonga, and to invite the countries of Solomon Islands and PNG to join future capacity building Fellowship programs.
“As this Fellowship (2018) included Fellows from Vanuatu and Fiji. There is an opportunity to do a similar Fellowship with Solomon Islands and PNG. So that is something we have in our minds about the Fellowship,” said Dr Sharma.
Griffith’s International Business Development Unit (IBDU)—Ms Sharm Aboosally and her team have played an important role in the success of the Central Banking program, especially with the Fellowships, IBDU steers multiple AAF applications with DFAT. The International Business Development Unit specialises in the professional management of international projects in developing countries for Griffith researchers.
“Dr Sharma and I were working on a possible Asian Development Bank consultancy in the Pacific when we decided to also apply for funding from the Australia Awards Fellowships for Dr Sharma’s work in the Pacific,” said Ms Aboosally.
“We assisted with proposal development, especially strategising proposal focus and alignment with DFAT priorities and project implementation. IBDU has implemented 27 Fellowships since 2012.”
For more information on the South Pacific Central Banks capacity building and research-based policy formulation program, and the forthcoming seminars and conferences, please contact Dr Parmendra Sharma.