Ka Wai Ola - Office of Hawaiian Affairs, Volume 14, Number 9, 1 September 1997 — Money for enfrepreneurs, no help for fhe needy [ARTICLE+ILLUSTRATION]

Money for enfrepreneurs, no help for fhe needy

OHA is now carefully scrutinizing its money distribution. Revenues must be generated not only for our deep pockets, but we must prorate sums for urgent beneficiary needs. These difficult times will worsen before they get better. The ill will find medical care out of their reach. Those without work skills will need more assistance to survive. Those who live in sub standard homes or no homes at all need help. Those needing ineome supplements will increase in numbers. Many will eonhnue to escape to the haven of drugs and crime as easy outs and will submit to the proliferation of socio-cultural programs using low self-esteem as a cause. Mueh has been said about the wise investment of OHA's portfolio left to allow the principal and eamings to compound. Now, we need a plan to prudently distribute the eamings of that $250 million portfolio, little of whieh was spent for beneficiary aid. OHA trustees just approved a partial operating

budget for 1997-1998 that was just 4 percent of all the monies we manage. We give millions in grants, millions in scholarships, millions in loans of $50,000 or more for businesses, however, we eliminated the $1,000 limit donation assistance program. The need of the program is compounded by the state budget cuts. Problems and solutions are becoming more eomplex. Tmstees must search for new ways. Eaeh year Scudder, Stevens and Clark, ine., hosts their investors to a dinner. A special speaker shares world eeonomie, social and political perspectives. It is an invaluable overview. At our table besides Scudder's Victor Hymes, were attendees from: the state retirement system mueh pleased after a $1 billion return last year, Merrill Lynch, First Hawaiian Bank, Bank of Hawaii Corporation, and Hawaiian Electric ine. Only Abe Aiona and I attended from OHA.

Scudder is one of OHA's newer money managers of the volatile small eap market. Two years ago Scudder generated a 54 percent return, whieh succeeded in raising total equity returns to 24percent. The year before however, Scudder hit rock bottom. This is the nature of high risk stocks, henee the need to balance investments with large capital growth returns, bonds for a more long term surety, real estate and geographic diversity. Speaker, Nicholas Bratt, described major investment global developments under way that will affect most of the people in the world 'from Iceland to Molokai.' He said: •Free markets (capitalism) have taken over the world; only two are not into capitalism. •Privatization has effectively improved government services. Hawaii is grappling with this move. •More deregulation will lower prices to benefit emerging countries most. •Governments and businesses are fast restructuring their operations as we are doing in OHA. •Globalization is on the fast track, only a third of the world market is in the United States.

Regional consortia are out of mode. The talk of Hawaii being the center of the Pacific Rim was premature. The 'tiger economies' of Thailand, Indonesia, and Korea have fallen. •Deregulation, restructuring, increased technology and global competition are imperahve reforms. Asians and the rest of the world will predominantly use English on the intemet. •The Technology of the Information Age is drastically modifying industrial manufacturing. A mueh more educated populaee is now required. But, the irony is that fewer jobs will be available and salaries will be lower. •The education, management and investment aeumen of the Hong Kong and Taiwanese businessmen make China the Rising Power.

Why all of this Investment talk? Because OHA beneficiaries must be apprised of the world trends to identify and prioritize the needs of the Hawaiians. We must educate high school as well as college graduates. We must speak Enelish as well as

Hawaiian, and, understand the computer as well as the history of our culture. We must be Hawaiians in a global arena. If you would like information conceming our portfolio, grants and loan awards, eall 594-1899. Be wise and informed, Aloha.

r ■ Trustee Messages OHA trustees' ināwiāual views expressed do not necessarily represent the q[ficial position of the Board of Trustees. ŌHA is not responsible for accuracy oJ these commentaries. The trustees weleome comment. Write to Ka Wai Ola o OHA. 71 1 Kapi'olani BlvcL Suite 500. Honolulu 96813.

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