NEWS

A-G Blasts Academic’s Comparison Of Sri Lanka’s Economy With Fiji

‘Fiji has used debt for building capital infrastructure which ensures that it generates returns to pay future debts. This may not be true for Sri Lanka.’
05 May 2022 11:03
A-G Blasts Academic’s Comparison Of Sri Lanka’s Economy With Fiji
Attorney-General Aiyaz Sayed-Khaiyum

Comparing the ongoing Sri Lankan economic and debt crisis with Fiji is like comparing apples and fish.

This is what Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum said while criticising recent commentary from economist Wadan Narsey and University of the South Pacific academic Neelesh Gounder.

Mr Gounder compared Fiji to Sri Lanka, while the A-G has called for more objective and honest analysis on the Fijian economy.

He said Mr Gounder’s blatant bias due to his political affiliations was clearly demonstrated through his shoddy economic analysis.

Adding that Sri Lanka had a lot to learn from how Fiji managed the COVID-19 crisis by borrowing smartly to ensure Fiji’s debt and balance of payments remained sustainable.

 

Pointing out some stark differences between Fiji and Sri Lanka, Mr Sayed-Khaiyum highlighted that;

  •  Sri Lanka does not have adequate available foreign reserves.

Sri Lanka had $7 billion due in external debt repayments alone and $2 billion in total foreign exchange while Fiji’s external debt repayments on average were less than $100 million annually with over $3 billion available in foreign reserves.

 

  •  Fiji has over 10 times more in Government revenue available to service interest payments.

Fiji’s revenue is more than $3 billion in a normal year and debt servicing is over $350 million in interest payments while future principal debt repayments average around $350 million which can easily be refinanced and repaid.

 

  •  Sri Lanka’s lenders stopped lending to them compared to Fiji’s lenders who have recently lent five times more than before and have shown interest to lend more in the future.

For the World Bank, Asian Development Bank, Japan International Co-operation Agency, Asian Infrastructure Investment Bank and other domestic institutional investors to want to lend more to Fiji meant that they had full confidence that Fiji would not default on debt payments.

 

  •  Fiji has secured around $900 million in highly concessional external debt with long maturity terms of 40 years, 10- year grace period and near-zero interest rates.

Fiji’s debt repayment is spread over many years while Sri Lanka had bonds that had to be paid in a bullet repayment.

Fiji’s only global bond of US$200 million was settled in the middle of the COVID-19 crisis in October, 2020.

 

  •  Fiji has used debt for building capital infrastructure which ensures that it generates returns to pay future debts. This may not be true for Sri Lanka.

 

  •  Fiji has third-party validation that debt remains sustainable from agencies like IMF, World Bank, ADB, ANZ, Westpac and international credit rating agencies.

Feedback:  fonua.talei@fijisun.com.fj

 



Fijisun Ad Space


Get updates from the Fiji Sun, handpicked and delivered to your inbox.


By entering your email address you're giving us permission to send you news and offers. You can opt-out at any time.


Subscribe-to-Newspaper