“Like any sensible nation or business on earth –– we will be borrowing to make up the remaining difference in revenue.”
Minister for Economy Aiyaz Sayed-Khaiyum told parliament in last night’s budget announcement borrowing at extremely concessionary terms can immediately put funds to work readying their businesses for the day their revenues return.
“Mr Speaker, some weeks back we announced COVID-19 Concessional Finance Support Packages to aid Fijian-owned Micro, Small and Medium Enterprises worst affected by the pandemic. These are highly-targeted loans that ease the financial burden on enterprises until our economy makes its recovery. These businesses –– borrowing at extremely concessionary terms –– can immediately put funds to work readying their businesses for the day their revenues return.”
He said when a government borrows –– responsibly –– it is no different.
“It’s an investment in our future. And when we can get loans at very concessional terms, we would be foolish not to seize the opportunity. This isn’t some debt trap; it’s the international financial system’s vote of confidence in the Fijian people and in our potential as a nation.”
He said over the years, the word “borrowing” has an all too predictable response from those who know all-too-little about modern economics, distorting the facts to politicise proven economic analyses.
“Rather than frame smart borrowing as an investment in our future, they claim it’s a burden on our children. But when we borrow prudently we allow our children to be educated, our communities to be connected to electricity, roads and jetties, and our economy to grow. Borrowing now to build for tomorrow means future generations can borrow less. And a growing economy with a skilled and educated workforce generates more than enough national wealth and tax revenue to repay debt and invest in the future.
“The “borrowing is always bad” narrative is not only wrong, it is entirely out-of-touch with how responsible governments have used debt to grow GDP –– without exacerbating inflation. And in times when misinformation and disinformation can literally cost lives, such ignorant analysis is especially dangerous.”
“Could Fiji have “saved for a rainy day” over the past decade? Yes, and we did. But the global COVID-19 pandemic isn’t some casual “rainy day” over Suva –– it is a cyclone of unprecedented proportions. Saving the sums necessary to combat this crisis would have meant withholding free education. Leaving thousands of Fijians without clean water and electricity. Increasing taxes, like VAT. Forfeiting free healthcare, and never aiding those who lost everything to Cyclone Winston. The Fiji of today would look like the Fiji of post-1987. The businesses and industries and young, bright Fijians that we have seen blossom simply wouldn’t exist; those Fijian success stories would never have been written, robbing hundreds of thousands of our people of their true potential.”