Regime Has No Credit Worthiness: Regime Officials

Peoples Coalition Government, Fiji

Issue No: 62; 25 September 2000

Regime Has No Credit Worthiness: Regime Officials

The interim regime lacks credit worthiness, a Finance Ministry official informed the Fiji Sun.

According to today's Sun (25 Sept), the Finance Ministry official stated that the regime's attempts to raise $42m loans locally were not successful because the local lenders are hesitant to lend to the regime.

Earlier the regime announced $43m additional deficit than what was approved by the Parliament. The regime Prime Minister Laisenia Qarase had earlier stated that this sum would be raised locally. Local sources of funds were expected to be the Fiji National Provident Fund, insurance companies and other financial institutions. The borrowings could have been through outright loans or through bonds.

The Finance Minister official informed the newspaper that people

"feel safer to keep money than invest in government bonds with a government, or any government for that matter in Fiji, who has no set time frame of rule".

The official stated that the local credit market was very unresponsive to the regime's call for loans. This was because the regime lacked credit worthiness.

While there is no shortage of finance in the local and international markets, the nature of the regime, together with the massive disapproval of the emerging apartheid and authoritarianism, would make it difficult for the regime to survive for long without loading the people with massive tax burdens. The international financial markets are likely also not to respond positively to the loans sought unless the returns were attractive enough to cover the risks of lending to a regime which is only interim as well as not recognised by most countries.

Given the overwhelming disapproval of the interim regime by the local and international communities, the regime has rather limited options. One of these is to raise the interest rates thereby increasing the burden on the elected governments and future generations.

END

25 September 2000.

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