10 Jul 2006

Marshall's government urged to cut spending and reduce public service

10:23 am on 10 July 2006

A government official in the Marshall Islands has urged the government to tighten its economic belt.

The government's chief secretary, Robert Muller, says elected leaders must deal with the problems of deficit spending, an increasing government work force and financial losses by government-owned agencies.

In a policy memo to Cabinet, Mr Muller says the problems facing the Marshall Islands call for a basic change in the government's economic policy.

He says Cabinet asked him to incorporate his policy recommendations into the economic policy statement that will be included with the fiscal year 2007 budget that is now in draft form.

Mr Muller is urging the government to restrain growth in employment and spending on salaries to allow more resources to be directed to the private sector.

He is calling for reforms of public enterprises, many of which are losing money, and privatizing services such as shipping to the outer islands and public works.

Robert Muller says the government needs to make greater efforts to improve the policy environment for business growth.