GOVT. FINANCES IN ORDER, REASSURES PM
By Nanai Taofiga Laveitiga Tuiletufuga
Labelling the claims by the government’s political arch rivals as slanderous, the Prime Minister and Leader of the Human Rights Protection Party, (HRPP), Tuilaepa Sailele Malielegaoi has assured that government is “financially healthier today than where it was 38 years ago when HRPP inherited a bankrupt government.”
He added that the success of the party in putting right the country’s economy was the key to why the HRPP came into power.
“The emergence of Samoa’s first political party 38 years ago was pivotal in turning around the government’s then bankrupt economy,” said Tuilaepa.
Addressing concerns raised by critics that government is facing difficulties with repaying her foreign debts estimated to reach more than $1 billion tala, the Prime Minister is confident and has reassured that “there is no need to fear.”
“It is not the amount of a country’s debt that its leaders should be worried about.
“Rather, it is a country’s ability to service that debt. In Samoa’s case, our debt service capacity is stable, because government is generating more than enough revenue to sustain the debt.
“I am confident that we will continue to service our debts, and we will not require a bailout. “When a country considers its debts, it’s not the totality of the debts, but the debt service capacity.”
For the current fiscal year, the Government’s approved debt service budget to repay external debts is close to $89 million tala versus total revenues of close to $900 million tala, said the Prime Minister. “That represents close to $800 million tala to finance the rest of the Government’s obligations which include financing development projects to benefit the country and maintain crucial public services for the people which includes, health and education to name a few,” he continued.
He noted that despite the economic shocks in recent months experienced by the country from measles and the coronavirus, the Prime Minister says that economy today is much better than when the ruling HRPP came into power. In the early 1980s, Tuilaepa said the economy was in a “real mess.”
“I am the walking proof of the despicable financial mess that our party inherited,” recalled Tuilaepa who entered politics in 1982 and was immediately made Associate Minister of Finance and under the wing of late Prime Minister Tofilau Eti Alesana.
Appointed as Minister of Finance the following consecutive years, Tuilaepa remembers those days when “the inflation rate was running at double digits.”
“The foreign exchange reserve was literally at zero. “The budget deficit was huge and unemployment was widespread.
“Government was bankrupt because we did not have any foreign reserves to use as loan collateral.
“The Public Servants Association (PSA) resorted to a massive strike because government did not have the funds to meet their pay raise demands.
“We can only afford to import chicken backs because food imports was scarce due to foreign reserves handicaps.
“I remember one particular incident where people were killed from a riot over the sale of canned herrings and sacks of rice.
“That’s how bad things were back in those days.”
The gloomy situation, continued the Prime Minister, prompted Government to rethink its strategy to get Samoa out of trouble.
“This meant implementing a programme of reforms necessary to put everything in order.
“And believe me when I say, our financial stability is impeccable today compared to where it was more than 30 years ago.
“Today, our foreign reserves is in the neighbourhood of 500 to 600 million tala which is sufficient to cover 5 months of imports.
“And international lending institutions’ confidence is solid in our government’s ability to service and repay our loans as reflected in continuous grants and assistance from these organisations.
“Without these loans Samoa’s development would not be where it is now.
“These loans have been used to build schools, hospitals and health centres, roads and bridges, ports, infrastructures, electricity and water improvements, strengthen agricultural developments and so forth,” he continued.
“The returns from these investments by far outweigh the cost of these borrowings because all of these are concessionary loans.
“The message is- as long as these loans funds are put into productive investments and generating the expected returns as government has done, then it makes sense to borrow.
“It should also be understood that all of Samoa’s debts are highly concessional with interest rates rating from 0-2% per annum with long repayment periods.”
Toning down his reactions to the critics third degree, Tuilaepa said that it is well documented that the government including himself as the government leader is always “receptive to constructive criticisms” but will not tolerate any false accusations.
