Deputy Prime Minister Prof Biman Prasad says the coalition Government has the ability to pay off public debt – and is not going to default on its obligations.
While delivering his Ministerial Statement in Parliament yesterday, Prof Prasad said in the last 10 years, the FijiFirst Government has been living in a debt-driven economic fantasy land, pretending that Fiji could carry on as usual and everything will be all right.
“That is not true. Optimism is always good, and the People’s Coalition Government too is optimistic – but we also recognise the hard facts. The optimistic scenario assumes business as usual and the Government cannot continue with business as usual.”
He said that almost $1 in every $5 of revenue that Government collects is now paid as interest to creditors.
Prof Prasad said 70 per cent of this debt is local so at least this interest is returned to the local economy – however, Government still has to find the money to write cheques.
“Offshore debt presents different challenges. This is all in foreign currency. So if Fiji’s currency falls against currencies like the US dollar, our debt automatically goes up and so do our interest payments.”
“A lot of our debt is on variable interest rates. It is clear that the pressure is on interest rates to rise. So once again, we will have to find more money from Government finances to meet rising interest costs.”
He added that in the last 10 years, Fiji has neglected basic infrastructure- the basic physical fabric that underpins the way Fijians live and work.