10% of our debt burden is owed to climate disasters alone - Sayed-Khaiyum

Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum says the fact remains that about 10% of Fiji’s debt burden is owed to climate disasters alone and as the scale of these disasters increases, so must our access to concessional finance.

While speaking at the 2022 ECOSOC Forum on Financing for Development, Sayed-Khaiyum says while Fiji’s debts are sustainable under any lens of analysis, they find serious fault with these outdated assessments.

He says the debt to GDP ratio, for example, is too crude a tool to analyze the complexity of this issue.

Sayed-Khaiyum says the cost of debt is changing and has questioned if it is still a “debt” if the terms are so concessional that much of it becomes a grant by the time it is paid.

He says you do not “borrow” a grant.

The Attorney General says while we had to borrow hundreds of millions, Fiji successfully negotiated low cost loans and attracted development assistance.

He says the COVID-19 pandemic from which we are now recovering, decimated the livelihoods of over 100,000 Fijians and erased a 5th of our economy.

Sayed-Khaiyum also says the Russia-Ukraine has created a food and fuel price crisis that will continue to exploit our vulnerabilities as an island economy.

He adds these crisis’ would have driven hundreds of thousands of Fijians into destitution but they have not let that happen and used every fiscal resource they could muster to respond and reset the course towards the 2030 Agenda.

Sayed-Khaiyum says any responsible leader would do the same and yet we and other vulnerable nations are being punished for it by a system of debt architecture that was never built to serve our needs.

He says the global financial system serves as a secure foundation for wealthy countries in times of crisis but its cracks can swallow developing nations.

Sayed-Khaiyum says the smaller we are, the further we can fall.

He says developing countries, on average, spend 5 times more than developed countries to service their borrowing, often to respond to crises we did not cause.

Sayed-Khaiyum says we suffer and pay more to the same system that rewards the perpetrators with cheap finance and that is the fundamental injustice at the heart of our global debt architecture.

He adds Fiji supports calls for the International Monetary Fund and the World Bank to explore and propose well-structured debt for nature swaps or other structural financing changes.