Monday, May 31, 2010

Why is Fiji in such an Economic Mess?

The Dictator - Voreqe Bainimarama

Posted on Matavuvale.com - 31 May 2010

Fiji has been spending money it doesn't have.

The government here took advantage of the economic good-times to borrow money and spend it on pay-rises for public workers and projects such as the Peoples Charter etc.

It began to run-up a bigger and bigger deficit (the gap between how much a country brings-in from tax, and what it spends).

Fiji enjoyed high public spending during the boom years, including an expensive Charter. After the world economy went bad, Fiji suffererd.

Banks started to view it as a country that might not be able to manage its money.

They are worried Fiji might eventually fail to pay its loans, and even go bankrupt.

To cover the risk, banks started charging Fiji more to borrow cash - making the problem even worse.

Eventually the government here went looking for help.

It is now borrowing millions from other EU countries and the International Monetary Fund.

If appoved that money is being loaned at a much better rate, but comes with tough conditions.

Fiji has to promise to cut its budget deficit. Go to the poll. Get an elected government. Stop all the bullcrap immediately.

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