MINISTER SAYS COUP SAVED FIJI FROM BANKRUPTCY

SUVA, Fiji (Fijilive, Jan. 17) – Fiji’s Minister for Commerce, Industry, Investment and Communication Taito Waradi says the military takeover has prevented the country from heading towards bankruptcy and an IMF [International Monetary Fund] bailout.

Waradi said the economy was allowed to deteriorate to the extent it did for lack of political will and economic and fiscal discipline.

"If not for the military intervention, and had the previous administration been allowed to continue with its economic policies and financial indiscipline, then we would have been faced with the real and unenviable position of becoming bankrupt sooner rather then later," he said. "We would then have been compelled to approach IMF to bail us out in which case IMF would impose austerity measures including strict conditions regarding monetary and fiscal policies as well as structural reforms and changes. Our sovereign right would have been compromised."

Papua New Guinea and many nations in the African continent can attest to the stringent and almost humiliating conditions they have been subjected to in the bailout process, he said.

"Statements are being made by various commentators attributing the current state of the economy to the events of 5th December, 2006. This is misleading and detract from the truth," Waradi said. "I, as President of the Fiji Chamber of Commerce and Industry, immediately after the 2007 Budget was presented in Parliament on 03/11/07 expressed concern that the 2007 Budget was not tight enough to address some of the gaping holes and in particular the widening current account deficit and our disproportionately rising debt levels."

He said that the failure to take the necessary corrective action at the appropriate time gave rise to the current state of the economy.

"Indeed Fiji’s credit rating was downgraded before the military takeover exacerbated by the ill-conceived decision to borrow a substantial amount of money in the international bond market to tide us over the tight exchange reserve position, prevailing at the time. A situation could have and should have been avoided if we had proper investment and export promotion policies in place. Resorting to the overseas bond markets sent a clear signal of an economy in trouble giving rise to our poor credit rating.

Waradi said the new administration is in the process of putting in place its blueprint to revive an economy which has been in a state of neglect for quite sometime.

He said that measures to restore investor confidence is top priority of this administration and "we expect to remove any impediments/barriers that stand in our way of achieving this objective".

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