Representatives from four major South Pacific central banks, brought together by Griffith Business School, have explored ways to enhance research capabilities to better manage their countries’ economic growth.

The move is aimed at bolstering their capacity to cope with the dynamics of a world economy still grappling with the effects of the Global Financial Crisis (GFC), volatile financial markets, fragile global growth and depressed commodity prices.

Leaders from central banks in Fiji, Vanuatu, Solomon Islands, Papua New Guinea and Australia attended the milestone symposium, hosted by the Griffith Business School’s Department of Accounting, Finance and Education and the Griffith Asia Institute in Brisbane on June 10.

The symposium, the first of its kind convened by an Australian tertiary institution, also attracted delegates from the Australian Prudential Regulation Authority, Australian Securities and Investments Commission, Asian Development Bank, World Bank, Department of Foreign Affairs and Trade, Australia-Pacific Islands Business Council and major Australian banks.

Griffith University Vice Chancellor Ian O’Connor described it as a ‘signature event’ for the University that could lay the groundwork to improve research capacity for central banks in the region.

“It also opens the door to significant opportunity for other institutions to work together in key partnerships,” said Professor O’Connor. “We have a deep belief in this University that we have a shared future.”

The symposium is an initiative of Griffith Business School’s South Pacific Studies Group (SPSG) which was established in 2012 to promote broader engagement and collaboration with the region.

The initiative, led by the head of SPSG Dr Pamendra Sharma, began a few years ago with the Reserve Bank of Fiji (RBF) which has led to four joint research papers.

Professor O’Connor revealed that the collaboration effort might be expanded further to include Tonga and Samoa.

Changing landscape

Ariff Ali, the Deputy Governor of RBF, highlighted the challenges for reserve banks in the region in maintaining economic growth, particularly in the aftermath of the GFC.

“The landscape changed significantly because of the GFC,” said Mr Ali. “It highlighted the importance of (central banks) to be proactive and independent.”

He said it also brought into focus the need for timely economic data in developing a wide range of instruments for RBF to implement.

Mr Ali spoke of the rise of technology as one of the drivers of change, and listed volatility in financial markets, fragile global growth and depressed commodity prices among the challenges faced by central banks in the region.

However, he also said the role of the RBF often extended beyond the traditional roles of central banks, putting pressure on already limited resources.

Mr Ali saw opportunities in growing the RBF’s research capabilities, which until now had been very limited at best. He highlighted the value of the Memorandum of Understanding secured last year with Griffith University to deliver joint research policy papers on areas of interest.

Luke Forau, Advisor to the Governor of the Central Bank of Solomon Islands (CBSI), described the collaboration with Griffith University as an ‘exciting new frontier’.

“We are looking forward to a long-term relationship with Griffith University,” he said.

Mr Forau said the CBSI, which this year celebrates its 40th anniversary of foundation, was a smaller organisation but faced similar challenges to other central banks in the South Pacific region, many of which fall outside of the traditional functions of majors such as the Reserve Bank of Australia (RBA).

Research capacity

Among them is the path to financial inclusion designed to engage the broader Solomon Islands community in the financial services sector.

“Additional resources will offer us an opportunity to serve more people at the bottom of the pyramid,” said Mr Forau. “We want to focus on domestic solutions by looking at the experiences of other countries.”

Peter Tari, the Deputy Governor of the Reserve Bank of Vanuatu (RBV), said improvements in research capacity were essential to develop policy solutions that would deliver ‘meaningful impact’ to the wider Vanuatu community.

He saw broad opportunities in developing the RBV’s research capacity beyond the traditional roles of monetary policy, and particularly in fields such as financial literacy.

Brett Winton, the Manager of Technical Cooperation of the RBA’s Financial Markets Group, said Australia’s central bank had developed a strong collaborative culture with its counterparts in the South Pacific.

He also saw Griffith University’s inaugural central banking symposium as an important initiative to further develop that culture and for all participants to hear first-hand the issues confronting the region.

Building community

Griffith Business School Pro Vice Chancellor, Professor David Grant, said the success of the symposium demonstrated the need to expand the event in future years.

“There is a need to build on this event and Griffith Business School drawing on its expertise in the finance and business sectors will be happy to assist in that role,” he said.

“Leadership is about building community and we see this event as an important means by which to do so. There is great benefit to be achieved from bringing the leading voices in the South Pacific region together in dialogue to consider and explore the themes of this symposium.“

Delegates to the symposium agreed during a round-table discussion to explore the opportunity of expanding the current Griffith-South Pacific central banks partnership to include other Australian and regional institutions, and to maintain regular contact to maintain the momentum created by the inaugural symposium.

A regular event bringing together the South Pacific central banks and others is also on the horizon. In the meantime, Griffith will continue collaborating with the central banks on individual as well as regional projects.