Chinese banks provide 40% of Fiji’s foreign loans
The Minister of Economy, Aiyaz Sayed-Khaiyum told Parliament that Fiji’s national debt was currently $4.5 billion and was manageable.
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%), the ADB (22%), EXIM Bank of Malaysia (1.3%), the Japan International Cooperation Agency (1.3%) and China Development Bank(1.1%).
Minister Sayed-Khaiyum said that while the value of debt had increased over the years, the debt to GDP ratio declined.
Opposition parliamentarian Viliame Gavoka was not convinced and pointed out that Fiji’s debt per capita was $4,400 in 2014, but was now $5,500.
Hon. 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, and encouraged the Opposition to read the Budget Estimates, which details 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 twenty-thirty years down the track.”
The global bond floated in 2015 attracted an interest rate of 6.625%, as opposed to 6.875% and 9% in 2006 and 2011, respectively.
At the end of April this year, 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.