Chinese banks provide 40 percent of Fiji’s foreign loans

Economy Minister Aiyaz Sayed-Khaiyum defends Fiji’s national debt in Parliament as “manageable”. Image: Newswire Fiji

Pacific Media Centre News Desk

Fiji’s Economy Minister Aiyaz Sayed-Khaiyum has told Parliament the national debt is currently F$4.5 billion (NZ$3.07 billion) and was manageable, reports Newswire Fiji.

Currently, the national debt is funded by $3.2 billion in foreign loans and $1.3 billion in local loans.

At the end of 2015, creditors included EXIM Bank of China (39 percent), the ADB (22 percent), EXIM Bank of Malaysia (1.3 percent), the Japan International Cooperation Agency (1.3 percent) and China Development Bank(1.1 percent).

Minister Sayed-Khaiyum said that while the value of debt had increased over the years, the debt to GDP ratio had declined, reported Newswire.

Opposition parliamentarian Viliame Gavoka was not convinced and said that Fiji’s debt per capita was $4400 in 2014, but it was now $5500.

Gavoka said the country’s GDP could change overnight, dramatically changing the ratio and endangering the country’s economy.

Minister Sayed-Khaiyum said that the World Bank had done a thorough analysis of the national debt and was convinced that it was manageable.

Read the Estimates
He encouraged the Opposition to read the Budget Estimates, which detailed information.

The Attorney-General said work was progressing on the National Development Plan and the government’s policies had a long-term view on Fiji’s future.

“Fiji needs to invest in its infrastructure; we need to get a strong footing, we need to get the fundamentals right, we don’t just live until next year … Any responsible government should not only think about the term of his government – it should think about 20 to 30 years down the track.”

The global bond floated in 2015 attracted an interest rate of 6.625 percent, as opposed to 6.875 percent and 9 percent in 2006 and 2011, respectively.

This not only provided substantial interest cost savings but demonstrated the strong investor confidence in the local economy.

At the end of April, the country’s foreign reserves stood at $2.05 billion which would be able to cater for 5.5 months worth of imports, above the international benchmark of 4 months.

Reported by Newswire Fiji staff reporters.