Narsey’s debt projections and assessments are cooked up – Acting PM

Acting Prime Minister and Minister for Economy, Aiyaz Sayed-Khaiyum is disputing economist, Dr Wadan Narsey’s recent opinion piece on his debt projections and assessments under the Qarase and Rabuka governments by saying they have been cooked up while Narsey says nothing in his article has been cooked up and they are based on data which is on the Reserve Bank of Fiji website, and he only estimated the average public debt to Gross Domestic Product ratio under the Sitiveni Rabuka, Laisenia Qarase and Voreqe Bainimarama governments.

While responding to a question in a press conference about Unity Fiji Leader, Savenaca Narube’s recent opinion piece where he had questioned the Minister for Economy’s credibility, Sayed-Khaiyum also spoke about Doctor Narsey’s recent article saying his debt projections and assessments under the Qarase and Rabuka governments have been cooked up.

Speaking from Melbourne, Doctor Narsey says when Qarase became the Prime Minister, the average public debt to GDP ratio rose slightly from around 24 percent to 27 percent but under the Bainimarama government, it went right up to 40 percent from 2007 to 2019 and even went higher for 2020 and 2021.

Doctor Narsey says he left out 2020 and 2021 in his assessments as the last two years have been abnormal because of COVID-19 and the average public debt to GDP ratio for the Bainimarama government is from 2007 to 2019.

He says all his assessments are based on RBF’s data which showed the public debt to GDP ratio has risen enormously under the Bainimarama government.

Narsey says what this basically means is the amount of money that any government has to set aside at the beginning of every budget to pay debt principal and debt interest has risen heavily under the Bainimarama government before it can pay for education, health, social welfare and other things.

Narsey adds the burden of the government’s expenditure for the past so many years has now been passed onto public debt which will be paid by the future generations.

Meanwhile, Sayed-Khaiyum had highlighted last month that the government’s debt to GDP ratio rose from 53.3% in 2006 to 56.2% in 2010.

He says following this, the Debt to GDP ratio was on a steady downward path declining to 43.5% in 2016 to 2017.

Sayed-Khaiyum says then we had TC Winston and many other natural disasters that required additional borrowing with the debt to GDP ratio rising to 48.4 % in 2018 to 2019. He says fast forward to the COVID-19 pandemic, tax revenue fell by 50% on average every month which resulted in a 12-month loss of over $1.4 billion.

The Acting Prime Minister says the economy experienced the largest ever contraction of 15.2% in 2020, a loss of GDP equivalent to almost $2 billion.

He had also stressed that had the Government not borrowed externally there would have been a very high risk of a devaluation.