S.N.P.F. C.E.O. defends fund from criticism
Dear Editorial Board,
I am responding to the editorial of the 29th of April aptly titled “SNPF deal a question of transparency”. I don’t usually respond to articles about SNPF that appear in your paper from time to time but in this particular case my spirit has roused me to say something in case any silence on my part is misconstrued as acceptance of the ludicrous musings in your piece. Far from it!
So please indulge me as I do my best to respond to the different matters you raise.
Firstly, to the matter of the recent SNPF input into the government stimulus package. You seem to casually brush these off as “not stimulus measures in the classical sense”. Well guess what? I do not doubt for a minute that the 13,787 members who have received upwards of $2.4 million tala in the last 3 weeks alone are appreciating every single sene of hard cash that they otherwise would not have had in their hands at all if it wasn’t for this “stimulus”. Your casual, dismissive sentiments towards the Fund’s and the government’s initiatives come across as appallingly unappreciative and ridiculously out-of-touch.
Secondly, you question the logic behind the decision to purchase the Mulifanua land for $34 million tala. I am more than a little puzzled here because you first correctly define ‘provident’ as future-minded and then in your very next sentence you contradict yourself somewhat and ask what is ‘provident’ about this decision. I really don’t get how you can’t see it.
I’ll try to spell out the basics for you with this illustration; My wife and I bought a quarter-acre land parcel at Vaitele Uta in 2013 at the market price of $80,000 tala. A neighbour across the road, said that he got his quarter-acre back in the 1980s for about $5000 tala. Today, in 2020, our same quarter-acre is now valued at $130,000 tala just for the land. Notice the exponential growth in market value? That is the same basic principle that applies to ALL real estate – even the Mulifanua land purchase - just on a bigger scale. Therefore, if we were just to look at the land (yes just the land) that the Fund bought for $34 million tala in 2019 – what do you think the value will be in 2025? 2030? Or even 2050?
The short point is – this was a long-term investment decision that can only stand to benefit the owners of SNPF – the members. They are the ones who will reap the future benefit from the Capital Gains. You can say oh what about the slump in tourism? And I would say – what about it? There is a multitude of other things we can do over there not just a resort. If worse comes to worse, we can pull it all down and lease the land to another investor to build something else over there. Or maybe down the line some rich Arab comes along and wants to buy it outright – who stands to benefit from the profit on sale? The members! If this is not “future-minded” thinking, then I don’t know what is.
Moreover, this land and all our other properties represent a mere 15% of our total investment portfolio of $794 million tala. Speaking of which, the portfolio is carefully managed and diversified to ensure maximum returns at the minimal risk.
Thirdly, you opine about transparency. What exactly is your definition of transparency? I only ask because the Fund has obligatory reporting lines on its finances, operations and decisions to the Auditor General, the Central Bank, the MPE and to Cabinet. Add to that, our annual reports and audit reports are closely scrutinized by multiple parliamentary committees who in-turn report back to parliament – you know, that place made up of the 50 individuals that represent every corner of Samoa and all our people? So what are you talking about? Transparency? If your answer is for us to stop and ask for the Observer’s blessing each time we make a decision whether minute or substantial, then, I’m afraid we’ll always fall short of your standard.
Fourthly, you surmise as to whether this money could have been better spent on what you term as “real cash injections” for the stimulus package. My, my talk about short-term memory. Or is it just plain ignorance for the facts? Allow me to jog your memory of recent history.
In July 2017, we gave back to our members $37 million worth of dividends. In July 2018, we gave back $53 million. In 2019 we gave back to our members twice! $54 million in July and another $8 million in December. That’s a total of $152 million worth of injections in only the last 3 years! The biggest such injections in the Fund’s history. Those are the “real” hard facts. You guys must have been on the moon or something? So please tell me, are those the kind of results that poor investment decisions produce?
Finally, you guys keep harping-on about Desico, flogging the same dead horse over-and-over. Desico is long dead. I can write a book about the arguments both ways on the merits of the decision taken at that time but what use will that be? It was a different time, a different CEO, a different management, a different Board, a different Minister, a different everything! Let’s not dwell in the past any longer, but look to the future. If I keep dwelling on my shadow behind me, I will never see clearly the awesome opportunities that lay ahead of me. Someone smart once said “Enjoy the present and live for what tomorrow has to offer, not for what yesterday has taken away”.
Let me say one more thing. I say this with all the conviction I can muster. I have seen and witnessed the goodness of God on SNPF. My fervent prayer everyday – is thanksgiving for the abundance of HIS Grace and the appropriation by faith of HIS unmerited favour. That is why there is no doubt in my mind; SNPF will continue to thrive with Christ at the wheel in spite of all the critics and the detractors. No doubt whatsoever.
Manuia le tou galuega
Pauli Prince Suhren
CHIEF EXECUTIVE OFFICER
Samoa National Provident Fund