‘Running on empty’ – Narube on Fiji’s downgraded credit rating
14 October, 2021, 10:00 am
Fiji is “running on empty” without room to continue spending at the rate we were as debt soars to unsustainable levels, says Unity Fiji Party leader and former Governor of the Reserve Bank of Fiji Savenaca Narube.
In a statement on Fiji’s downgraded credit rating by international credit rating agency Standards and Poor’s (S&P) and a “scathing” IMF assessment of the economy, Mr Narube said “the worsening economic and financial crisis that Fiji is facing is because of poor leadership”.
He said the rating was a measure of a country’s suitability to receive financial credit and was reviewed every two years after a thorough assessment of the economy.
He also said the rating directly affected the price of bonds that Fiji issued in the global market and signalled to the international community how responsible Fiji’s economic and financial management was.
“It is an important signal to potential foreign investors,” he said.
He said he initiated the first credit rating to fix the price of Fiji’s first issued bond, rated then as “non-investment” grade, and during the FijiFirst Government’s tenure, had dropped to highly speculative investment.
“S&P two weeks ago downgraded Fiji’s credit rating from BB to B which is just one step away from the lowest level called ‘substantial risks’.”
He said the IMF assessed the economy annually and the assessment released last week was scathing of the deterioration in our finance stressing the need to slow down our expenses to match our revenue and reverse the rapid build-up in debt.
He called on international communities and multilateral institutions to be extra vigilant “to prevent this Government from sacrificing Fiji’s future for its political survival”.
“It has shown in past elections that financial prudence is subservient to its political agenda.
“If that happens, Fiji is bound to sink deeper into economic crisis and financial ruin.
“The irony is that we have been saying precisely the same thing for many years but Government has not listened. Instead, they have insisted that the economy and finance were in order.
“Now that the IMF and the rating agencies have told them that we are in crisis, will they listen?”
He said based on history, there was a likelihood the warnings would be ignored by the Government as the 2022 elections
Meanwhile, questions sent to Minister for Economy Aiyaz Sayed-Khaiyum remained unanswered when this edition went to press.