Re: Govt. is not broke
Thank you Samoa Observer for highlighting this issue. The Samoan government is starting to feel the pressure from the Banks. Here is why:
• $2billion Loan at 5% interest means Samoa government has to pay $100million on interest each year.
• $2billion Loan at 2.5% interest means Samoa government has to pay $50million on interest each year.
• $100million or $50million is a lot of money Samoa government has to raise each year to pay the interest only.
• One way to pay off the interest is to have big unnecessary projects.
• So for example the $140million Faleolo Airport renovation.
• How much of this money was used to pay off the interest on government loans?
• Has the new airport made any difference to the number of flights into Samoa?
• The last time I checked there are still five flights a day on average.
• One option for government is to reduce the size of government and increase businesses in Samoa. By reducing the size of government to half or a quarter then it becomes easier to target unnecessary spending and corruption within each department.
• By increasing businesses in Samoa there will be more wealth in Samoa and more tax revenue raised for government.
• Tourism Industry in Samoa can become a $500million a year industry but government should privatize the tourism industry by creating a business tourism sector and receive the benefits by tax.
It is almost as if the government is wishing for another disaster so that they can receive more aid money.
As Samoa hasn’t had a disaster lately the government is starting to feel the pressure from Banks on paying the interest on the loan.
So let’s wait and see for the next big announcement of another unnecessary project?