SUNBIZ

Academic: Political stability needed in long run for growth

Fiji’s higher growth rate may remain elusive if political reforms do not transform to political stability in the long run, says an academic. Baljeet Singh, a Lecturer at the University
13 Aug 2014 13:49
Academic: Political stability needed in long run for growth
Osea Bola

Fiji’s higher growth rate may remain elusive if political reforms do not transform to political stability in the long run, says an academic.

Baljeet Singh, a Lecturer at the University of the South Pacific’s School of Economics made these comments yesterday at the Fiji Economy Update 2014.

Mr Singh said when progress on political reforms is visible, the outcome remains uncertain and confidence will become more obvious after the September elections.

“Election of the Government is expected to improve investor confidence with improved business environment,” he said.

“However, business environment depends on the economic reform policies that is going to be undertaken by the democratically elected government.

“Discussion and resolution for issues such as land issues are important long term stability.”

Therefore, Mr Singh said the government needs to implement constructive and long term policies.

“Looking at the fiscal polices the major feature for the government budget has been in the change in the expenditure mix,” he said.

 

Infrastructure expenditure

Mr Singh said if one compares 2010 to 2014, they will see that the expenditure has increased by almost three-fold.

“This is a bold step by the Government which shows the government’s willingness to improve infrastructure in the country,” he said.

Similarly, Mr Singh said the Government has a very good control over the budget deficit except for 2009 and 2013.

“In 2009, you can see an increase in the budget deficit, the year of devaluation and that’s why there was an increase of 3.8 per cent,” he said.

“In 2013, again there was a small increase in the budget deficit, again this was due to the capital commitment by the Government. “In 2014, the budget deficit was about 1.9 per cent.”

“Nevertheless, 1.9 per cent is optimistic and the revenue collection depends on the kind of measures that is going to be implemented by the government.

“Again debt as ratio of GDP has been declining over the last four years and in 2014, it is expected to be around 48.3 per cent.

“Again this shows the government commitment in getting the ratio to 45 per cent and getting it down in the long run.”

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