27 Feb 2006

Calls for Fiji government to reduce national debt levels

4:38 pm on 27 February 2006

A Fiji economist says the government needs to spend more money on infrastructure and reduce the level of debt that's used for consumption.

The head of the School of Economics at the University of the South Pacific, Dr Biman Prasad, says the country's national debt is projected this year to amount to 1.5 billion U.S. dollars, or 53 percent of the gross domestic product.

He says this is unsustainable because too much is borrowed by the government for consumption expenditure, including, for example, public servants' salaries.

Dr Prasad says too little is destined for capital expenditure or infrastructure, which includes spending on roads, water and electricity.

"Our infrastructure is generally of poor quality, telecommunication charges are very high, it's very costly to fly to Fiji on business, for example. Our port charges are extremely high, legal issues; so all these things are policies that government ought to look at."

Dr Prasad says money needs to be spent to improve basic infrastructure to attract investment.

The Fiji government says it is looking at ways to reduce operating costs and increase capital expenditure.