Thursday, December 16, 2010

Fiji Facing Escalating Risk from Government Debt: ADB

Posted on Radio New Zealand International

Fiji Public Debt

ADB says Fiji economy trapped on low growth path

The Asian Development Bank says Fiji is trapped on a low growth path despite an overall economic benefit to the Pacific region from a gradual global recovery and firm finances in Australia.

The latest data published in the Pacific Economic Monitor says increasing private investment could help Fiji but it suggests business people are wary.

The report says the private sector views several recent government actions in a negative light, including the localisation of media ownership by media decree, price controls and actions in relation to Fiji Water.

A senior country specialist for the ADB in Suva, Emma Veve, says the bank is not approving grants or loans for new activities to Fiji for the time being.

She says Fiji continues to spend more than it earns.

“So there’s some real need for structural reform within Fiji to address the issues the sugar industry are facing, to look at what the right size of government is and to address the civil service issues. As well as to look at state-owned enterprise reform and to continue on with that. So these are all things that Fiji really does need to urgently focus on.”

Emma Veve says the government has indicated it will be trying to reduce debt levels in the coming year and bringing in more revenue by increasing value added tax to 15 per cent from early January.

Posted on Pacific Beat Radio Australia - December 16, 2010

The Asian Development Bank has issued a stark warning about the state of Fiji's economy, with a claim that mounting government debt is propelling the country into dangerous waters.

The latest edition of the bank's Pacific Economic Monitor reveals both Tonga and Fiji have debt problems.

In Tonga it says government debt has risen from 32 per cent of Gross Domestic Product to 41 per cent since last year, taking it beyond the crucial 40 per cent level, which is regarded as bearable.

But in Fiji, ADB Economist Emma Veve government says

 Fiji debt has climbed to 57 per cent of GDP.

Presenter: Jemima Garrett

Speaker: Emma Veve, senior country specialist, Asian Development Bank.

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