Ka Wai Ola - Office of Hawaiian Affairs, Volume 32, Number 4, 1 ʻApelila 2015 — Smart decisions start with research and knowledge [ARTICLE+ILLUSTRATION]

Smart decisions start with research and knowledge

Welina mai e na hoa mai ka hiki 'ana a ke kau 'ana o kala! "Smart decisions start with research and knowledge" is a quote that I take to heart as an elected Trustee of our Native Hawaiian Trust Fund. The following is an excerpt from one of OHA's Meetings: Subject: Preliminary Trust Fund Value

Trust Fund Flash Report • As of 12/15/14, OHA's Trust Fund value is approximately $356.1M. This is below the maikel value at the beginning of the calendar year • Year-to-date OHA has withdrawn a total of $20.5M from the Trust Fund • After adding back YTD withdrawals, Ihe Trust Fund has gained approximately $11.6M year to date • What will 12/15/15 hold for OHA's Trust Fund? Attending the Certified Financial Analysts' Annual Eeonomie Forecast Dinner (Mahalo to OHA's CFA David Okamoto) at the Hawai'i Convention Center on March 5 brought this even closer to home for me. The featured speaker that held the most credibility for me was Mr. John Williams, President and CEO of the Federal Reserve Bank of San Francisco. His prediction that the Federal Reserve sees interest rate hikes on the horizon, and the likely strengthening of the dollar further will see a risk of a probable near-term 5-9 percent dip in the markets. "Regardless of whether the Federal government hikes the interest rates in June or September, it's coming and it's not very far away," said a senior market analyst for Goldman Sachs. OHA has funds invested in Goldman Sachs and JP Morgan, plus a lot of other funds. What does this have to do with OHA you might ask? EVERYTHING! Our Native Hawaiian Trust fund is tied to the markets, U.S. and Globally. A strong U.S. dollar dropped the euro to a 12-yearlowof $1.07 and lowered the yen to 121. A few years ago the yen was 77 to a $1.00 ... today itis 121 andclimbing. Sure, a strong dollar sounds good, but it hurts us in two ways. Our foreign competitors' goods they sell here heeome mueh cheaper for us to buy. Their eheap currencies make their products less expensive. Our sales

shrink abroad when converted from euros and other weaker currencies into dollars. This includes our loeal Hawaiian products we sell abroad as well. Obviously, OHA ean no longer afford to keep spending generously with no accountability. The rising cost of living in Hawai'i is squeezing all taxpayers, puhlie employees, puhlie employee retirees and Native Hawaiians included. However, it appears

that only a handful of Trustees are willing to initiate reforms to curb OHA's rising expenditures. If certain reforms are not adopted, Native Hawaiians ean look forward to a diminished trust fund. As our Chair Lindsey said to me: "As mueh as we say our portfolio is balanced to hedge against hard times, we need to look at other opportunities around us to preserve, protect, build and manage our weahh, otherwise auwē no ho'i. We are so vulnerable to the outside world. We need to find ways to be sustainable and independent of the outside world as we onee were." A new year OHA's CEO, CFO, COO and CFA need to kūkākūkā with the Trustees about the eeonomie opportunities so we may to the best of our abilities preserve, protect and "build our fund" for our future generations. Any suggestions for building our fund? Creating our own Native Hawaiian Bank or Credit Union? Designing/developing Kaka'ako Makai to generate revenues to build up our fund? Other eeonomie development? With valuable research and knowledge we ean make smart decisions! Me ke aloha pumehana, Trustee Ahu Isa ■

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Leina'ala Ahu lsa, Ph.D. TrustEE, At-largE

The Certified Financial AnalysTs' Annual Eeonomie Forecast Dinner in Honolulu attracted speakers such as John Williams, president and CE0 of the Federal Reserve Bank of San Francisco. - Courtesy photo