MASSIVE LOAN MUST BE REPAID; EVEN BIGGER LOAN SOUGHT. International Monetary Fund (IMF) resident representative Yongzheng Yang confirmed yesterday that Government has by September next year to repay the US$150m (F$300m) plus 7% interest (F$21m) on the loan taken out in September 2006 by the Qarase-led government. Government is reported to be seeking a standby arrangement with the IMF for F$1billion to support Fiji’s reforms and debt obligations. “The repayment of the bond loan increases Fiji’s financing needs next year and this is one consideration behind Government’s request for a standby arrangement (SBA) with the IMF,” Mr Yang said. “The IMF would factor in this financing need should an SBA eventuate.”
WHAT SEALED NETANI'S FATE. "Elementary, my dear Rika" left this comment on your post "Chaudhry Breaks PER: So What? Rika a Goner...
"One statement above all explains Netani Rika's untenable position, not just in recent months but for the last couple of years. It came at the time of the expulsion of his then boss, Evan Hannah, and provides a clear insight into the Napoleonic scale of his ego. He told ABC Australia that the Fiji Times had effectively "become the opposition" in Fiji and despite Hannah's expulsion, was "determined to continue its struggle" against the regime. Not to report the struggle - its legitimate role - but lead it on behalf of the people.
"This is when this guy crossed the line and sealed not just his own fate but the fate of his proprietor, the biggest media mogul the world has ever seen. In the eyes of the dictator, the Fiji Times was no longer just a routine nuisance but had declared itself an active political player. How Rika thought he could ever prevail under the circumstances is astonishing. The only possible explanation is that his heroic ego is matched by something that must have come from his religious upbringing - a persecution complex and tendency to regard martyrdom as a friend. A sad but ultimately inevitable demise. And a lesson for both News Limited and Mac Patel of the dangers of placing any newspaper in the hands of an ideologue pursuing a destructive personal crusade."
RadioNZInternational: NEVER MISSES A THING. The big new from Fiji for Tuesday was that a Fiji Bureau of Statistics survey had found the estimated value of construction work was just over US$30 million, a decrease of 3% over the previous quarter. This was quite a scoop for our publicly owned radio station. The story pushed aside other news: the possible lifting of PER, the country being declared free of typhoid, the upcoming Fiji Day celebrations, and even the story of the Toowoomba woman who arrived in Nadi with 20 of the $20 stolen bank notes. A scoop indeed! RNZI is to be applauded for its tenacious pursuit of such valuable information and for contuing balanced reporting on Fiji. Excuse the sarcasm but sometimes one has to comment on such things.
7 comments:
Croz,
Your heading suggests the Qarase government was less than responsible for taking out the US$150m loan and you may be right. However the current government has already ammassed far more debt and is looking to raise a lot more via development banks and the IMF. Should this not raise alarm bells too or do we wait for the next government to look back on this government and say "look they did the wrong thing" just like the military are now. The Qarase debt of course got bigger by devaluating the Fiji dollar which was necessary because of the devistating economic impacts of the 2006 coup and the failure of this government to create a quick recover (yes GFC and natural dissaster didn't help either).
If you took Sharon's comments as the PER is about to be lifted then you are beyond positive on Fiji's military. They have no intention of lifting it and why would they ? It gives them the power to legally do pretty much whatever they want and importantly squash anyone who dares speak out.
The real story the media should pick up overseas is why the PM gets away with breaking yet another promise.
If there really is a public emergency in fiji right now then the PM himself should be warning tourists of the dangers but of course there is no public emergency only a military hungry on power and absolute power.
@ US$150 ... You are quite right on both assumptions. The mind boggles at the sums involved.
@ PER ... She didn't say PER was about to be lifted. She cited the A-G's earlier comment and said PER was under constant review. I have constantly stated in this blog that PER has past its use-by date -- unless Government knows something we don't. My gut feeling is that it will be lifted (or at least moderated, if there is no new cause for alarm)in the next few months.
@ US$150million loan at 7%
This loan was taken out due to the unsustainable size and consequent drain on the exchequer of a Cabinet which incorporated 36 Ministers and Ministers of State: the largest Cabinet of any nation in the 54 states of the Commonwealth. It was a loan to have been questioned then because the global economic downturn was still two years off (although one or two acute financial and economic 'gurus' saw it coming: thelate Sir John Templeton being one and Professor Nouriel Roubini of NYC University another). Since the Global ED many countries have been obliged to borrow to stabilise their economies. So, Fiji is by no means alone here. However, the terms of that borrowing are what should concern us. They are likely to be harsh. And our situation will never allow for a proposed 15% immediate rise in wages across certain sectors being passionately peddled by Father Kevin Barr. This will not be possible and the economy will not allow for it: not without the loss of many businesses and with them thousands of jobs. We must "get real" on the external economic conditions which will continue to impact Fiji. If we choose businesses and employment, scrap any idea of 15% wage rises and do it now.
The facts on the Qarase Loan that was spent by Bainimarama
The Government continues to call the US$150 million loan drawn in September 2006 the “Qarase Loan”.
Fact 1.
Only $200,000 of the loan was drawn down before the Coup. The rest was spent under the stewardship of Bainamarama,
Fact 2
The devaluation of the Fijian Currency has made the repayment 20% more onerous than anticipated when borrowed. The repayment figure is now FJ$321 Million.
Fact 3.
Even including the negative effect of the world recession the economy has taken a hit of over $1 Billion from the 2006 Coup. The tax on this loss would have been available to repay the loan.
Fact 4
In normal circumstance there would be a long list of willing lenders to refinance this loan to a stable democratic government. The Qarase Loan was financed by International Bonds that were freely available to a stable Fiji. Now only the IMF will even look at lending to Fiji and they are cautious reluctant lenders.
Fact 5
The $1Billion loan now requested by the current Government makes the “Qarase Loan” look like chump change and this “Bainimarama Loan” will haunt our children for many generations.
Another day and another contradiction.
Our beloved PM gives Qarase another tongue lashing about the his loan and at the same time seeks one 4 times in size.
Enough already please. Just admit your coup was about staying out of jail and in the money.
@ sherse said.....
This is no time for apportioning blame. This is a time for hard thinking, keeping one's wits about one and pushing on. This loan must be paid off or re-financed. Re-financing it will extremely difficult. Are all those who voted for this loan prepared to fork out? You voted for it so, you should pay: User Pays - remember! In the meantime, a Global Economic Downturn became the worst since 1929. It is possibly worse than that due to massive global unemployment with no end in sight. If businesses are lost in Fiji, they are going away for good. Even local investors will balk at the prospect of imposed wage rises without concomitant and demonstrable increased productivity. Make or break time has arrived!
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