20 May 2010

IMF loan for Fiji seen as long-term liability

6:40 pm on 20 May 2010

A Fiji economist says borrowing money from the IMF to pay for reforms will do long-term damage to the country's economy.

Local media reports the interim Prime Minister, Commodore Frank Bainimarama saying 90 percent of negotiations to borrow between 400 and 500 million US dollars are complete.

Professor Wadan Narsey, from the University of the South Pacific, says the IMF is likely to apply very stringent conditions to the loan, that the regime will not like.

"When you borrow from the IMF you're obtaining a loan in foreign exchange. If your export sector at the moment is absolutely struggling to even cover the imports that we need to keep this economy ticking over then borrowing more in foreign exchnage is asking for real long-term problem."

Professor Wadan Narsey