Was that a fact or conjecture? Don’t matter, as far as IG is concerned, both are based on a faulty premise!
Fiji govt records $77 million surplus
The Fiji Government recorded a net surplus of $77.4 million for the 12 months to June this year, the Reserve Bank of Fiji says. However, Australia-based economist Professor Paresh Narayan told Fijilive the surplus was only a “mathematical outcome” if it was achieved on the back of declining capital expenditure.
The RBF said this figure represented 1.3 per cent of the gross domestic product and was underpinned by a decline in operating expenditure and higher revenue collections. It said Government’s capital expenditure for the first six months of the year was higher by 5.4 per cent on an annual basis.
Narayan highlighted Narube’s comment at the recent mini-economic summit where he revealed that of the $162 million allocated for 2008, as of August only $15 million had been spent. He said if only $15 million out of the $162 million was spent until August, “then it seems to me that a significant proportion of capital expenditure has been sacrificed”.
“In fact, even if it was tightening of operating expenditure, this should have been diverted to capital expenditures, such as infrastructure,” Narayan told Fijilive. He said this net surplus was meaningless in an economy as badly directed by policy makers, where economic growth had been negative and forecasts for similar weak performance.
“In other words, what is the point of obtaining a surplus when the economy is lagging behind on all fronts: weak negative growth, escalating inflation, increasing debt levels, weak export performance relative to imports, leading to a current account deficit, and weak investment levels?”
“Capital expenditure is an important aspect of Fiji’s reconstruction. Fiji needs more capital expenditure allocations in key sectors such as roads, energy, water, and housing, among other things,” Narayan said.
He said it was good to cut down on operational expenditures as returns were relatively low compared to capital expenditures.
“Capital projects, related to both the social and economic sectors, have been neglected for over two decades now and are in need of urgent attention. For this to happen, Government will need to generate additional revenues,” Narayan said.
Former interim Finance Minister Mahendra Chaudhry and Permanent Secretary Peceli Vocea could not be reached for a comment.