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Moody’s Says Elections A Credit Positive For Fiji

Moody’s Says Elections A Credit Positive For Fiji
GRACIOUS IN DEFEAT… Team Fiji men’s triple jump star Eugene Vollmer prays with arch-rival and close friend Penial Richard of Papua New Guinea. Richard won the gold medal with a jump of 15.45m while Vollmer took out silver with a leap of 15.30m. “We’re spiritual brothers,” said Vollmer. “I’m not happy with my performance but can’t complain, he was the better athlete on the day.” The duo had been competing against each for the last five years. Photo: ONOC
September 23
09:32 2014

Fiji’s return to electoral democracy has been labelled as credit positive by Moody’s, an internationally-reputable credit rating agency.

Moody’s Investors Service Singapore, Sovereign Risk Group VP – Senior analyst, Christian de Guzman, said this would help normalise diplomatic relations for Fiji.

He said, as a result, it would facilitate access to concessional funding and potentially strengthening trade ties.

Restoration

“The restoration of a democratic system in the South Pacific island state should allow for easier access to both bilateral and multilateral funding,” he said in the Moody’s Credit Outlook September 22 issue.

The Fijian Government has been given a B1 credit rating with a stable outlook by Moody’s.

Mr de Guzman said as of 2013, only 15.7 per cent of Fiji’s government debt had been concessional, putting it well below its rated peers in the region.

“By contrast, Papua New Guinea (B1 stable) sourced 22.8 per cent of its debt from concessional sources, Bangladesh (Ba3 stable) 42.5 per cent, Vietnam (B1 stable) 47.3 per cent and Cambodia (B2 stable) 98.5 per cent.

Mr de Guzman said: “These countries have correspondingly lower debt servicing burdens, as measured by interest payments as a share of GDP.”

Sanctions

Mr de Guzman noted that in the lead up to the September 17 elections, both Australia and New Zealand progressively increased development assistance – a turnaround from the sanctions they imposed since 2006.

“Fiji is currently reliant on more expensive domestic market funding, resulting in a relatively high debt servicing requirement,” he said.

“In 2013, the government’s interest payments amounted to 3.5 per cent of GDP, compared to less than two per cent for each of the regional peers mentioned above.”

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