NEWS

 A-G Tells Of Fiji’s Economic Challenges Amid COVID-19 Pandemic

The A-G stressed the need to develop a more nuanced ap­proach to assess debt sustainability, taking into account specific country characteristics, unprecedented access to highly concessional debt, as well as historically low inter­est rates.
08 Apr 2022 12:42
 A-G Tells Of Fiji’s Economic Challenges Amid COVID-19 Pandemic
Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum ((third from left)at the Pacific Regional Debt Conference held at the Pacific Islands Forum Secretariat office on Wednesday. Photo: Fijian Government

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum says no one envisioned the devas­tating impacts of the COVID-19 pandemic.

Mr Sayed-Khaiyum made these comments as a panelist, at the Pacific Regional Debt Conference held at the Pacific Islands Forum Secretariat office on Wednesday.

Mr Sayed-Khaiyum gave a brief overview of the challeng­es faced by the Government at the peak of the COVID-19 pandemic in Fiji.

He also discussed how the Fijian Government implement­ed policy measures to cope with the challenges.

“It obviously had a huge impact on our economies, more so in particular those who were dependent on service in­dustries in particular Fiji for example, 40 per cent of our GDP was dependent on the tourism sector,” he said.

He said borders shutting down globally, had a huge impact on the government’s ability to collect revenue, and a cata­strophic impact on the perspective of the employment of people.

He said Fiji had over 100,000 people who almost lost their jobs overnight.

“So it presented to us, obviously a scenario that we had never envisaged before.”

He said that this made those who worked in the tourism sector and those who in fact were dependent on the tourism sector indirectly, lose income and their jobs.

Mr Sayed-Khaiyum said the government then took a for­ward looking approach.

He said their first target was to ensure Fiji got a very high vaccination rate and the no jab, no job policy was in place.

He said people had to get fully vaccinated within a very short period of time and the Government was grateful to the Governments of India, Australia and New Zealand and the Americans who actually supplied the vaccines free of charge.

He said Fiji became one of the highest vaccinated develop­ing countries in the world, and this enabled the government to open up the border concomitantly- with a programme in place.

Government also rolled out a comprehensive unemploy­ment benefits scheme so people could withdraw funds from their general account in the Fiji National Provident Fund (FNPF).

“And if they did not have those funds and the Government actually paid a stipend if you like, every fortnight, this total to about $205 million.”

He said other incentives were cash disbursements for the informal sector.

He said the injection of funds was critically important to ensure the economy actually plod along, apart from the fact that it did give people a particular relief in terms of their ability to buy food, to be able to pay rent, pay electricity and other expenses.

“It meant there was money being injected into the econ­omy.”

He said all together they rolled out about $430 million in what the Government called the COVID-19 unemployment benefits scheme.

Borrowing

Mr Sayed-Khaiyum said funding for these incentives had to be borrowed.

“This was given the fact that we still had revenue sources depleted.

“Money of course had to be borrowed. And as a result of that, our debt to GDP ratio has gone up by going up to 88.4 per cent.”

He said total debt stock was about FJD$9.1 billion.

However, he said the recent ANZ report showed the debt was sustainable- because the actual borrowing of the funds was done in a strategic manner.

He added that even with all the economic impacts faced during the pandemic, the Government did not in any way compromise its overall policy framework.

“We continued with free education, we still provided the poverty alleviation scheme, the poverty or what we call so­cial welfare payments continued.

“There was free water for those below a particular level of household income levels and discounted electricity costs, etc. All of that continued.”

The A-G stressed the need to develop a more nuanced ap­proach to assess debt sustainability, taking into account specific country characteristics, unprecedented access to highly concessional debt, as well as historically low inter­est rates.

Feedback: inoke.rabonu@fijisun.com.fj

 



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