26 Apr 2010

French Polynesia's opposition blames President for ratings downgrade

7:20 am on 26 April 2010

French Polynesia's opposition has blamed the President Gaston Tong Sang for the latest ratings downgrading by Standard and Poors.

The agency highlighted political instability as a factor in what it calls the territory's unprecedented economic crisis.

The opposition points to Mr Tong Sang's decision to abandon the ruling majority last November, which brought about a new ruling coalition that however has again fallen apart.

After lowering French Polynesia's rating to BBB-, Standard and Poors says the situation appears to be worsening as the long-running instability has stopped any possible reforms.

It notes that Tahiti's economic model heavily relies on transfers from the French government while the main local industries, such as tourism, black pearl farming and fishing, are no longer competitive.

The agency says as a result, the 2008-2009 period has seen the economy contract by three percent and the number of jobs drop by seven percent.