9 Nov 2004

Fiji academic says heavy borrowing by the Government from the NPF is a calculated risk

3:58 pm on 9 November 2004

An academic in Fiji says the government is taking a calculated risk by borrowing further money from national pension funds.

The Qarase government set out plans in last week's budget to borrow almost 2-hundred million U.S. dollars from the National Provident Fund, on top of the 950 million dollars it already owes the fund.

Interest paid on members' funds has been slashed by a third over the last 10 years and pensions have been falling.

The head of the economic development school at the University of the South Pacific, Doctor Ropate Qalo, says he needs more details to judge whether the government's move makes economic sense.

Dr Qalo says it's also unclear why the government lowered its expectations for economic growth ahead of elections in 2006.

"This is very strange to a lot of people who observe this because one would imagine that the government would want to put a more optimistic view. Maybe they want to surprise us by next year, and then of course that follows on to election."

Doctor Ropate Qalo.