A time for caution
The Minister of Finance, Sili Epa Tuioti, is scheduled to deliver his maiden budget today in Parliament. In light of the prevailing conditions in the economy, the word for everyone is obviously Caution with a capital C.
We say this because the signs are not good. If anything, they are frightening. Which calls for the leaders of today – including Minister Sili – to be prudent in his thinking.
This is not the time to try and be a hero. If we are honest with ourselves, it is a time to cut back spending and be conservative.
Last year as the Minister of Finance, Prime Minister Tuilaepa made a very frank admission. Listen to him: “There is no way the government can sustain the high spending levels of the past five years without recourse to increased grants and raising taxes. As a responsible government, we are proposing to cut back spending.” The message therefore is we need to “live within our means”.
On this note, earlier we published an editorial “Economic warning, govt. and beggars.” As we await Sili’s budget today, we feel this message could not be more accurate. Here it is:
And so we’ve been warned once again.
Although the caution is particularly aimed at Prime Minister Tuilaepa Sa’ilele Malielegaoi and his government, we believe we should all take notice.
This is for the simple fact that Samoa does not belong to a person or a political party. Samoa belongs to all of us – you, me and our aiga – including the thousands of Samoans residing abroad.
Which means we shouldn’t be ignorant of anything that could put us as a country at risk. We love this country too much to be ignorant.
On the front page of the Sunday Samoan of 24 January 2016, a story titled “Economy alarm bells” was published. The story featured a warning that the economy could be heading towards a disaster. It came from a businessman and an investor, who spoke to the Sunday Samoan, on the condition of anonymity, fearing repercussions for his business.
In this business, let me tell you it’s pretty tough to carry the opinions of people who want to remain nameless, especially when it comes to such sensitive matters. But there are exceptions and in this particular case, we made one because we feel the issue is too important to ignore.
So for the story, the man was referred to as Sione.
“I’m concerned that if certain things continue, then it will have an impact on the economy,” Sione said about the ballooning $1.4billion debt, the constant budget deficits among other issues.
Speaking about the debt level and reports that Samoa is in the top ten countries for “illicit financial flows,” Sione cautioned about a potential intervention by the International Monetary Fund (I.M.F.).
What’s more, he was extremely concerned about the government’s deafening silence on reports about the “illicit financial flows.”
“My concern is that if this money laundering is going to continue to happen, very soon I.M.F. and other international organisations including most of the people we get aid from, will slam the door shut and we will go back to the 1960s,” he said.
“The government have been totally silent. In fact the silence is deafening over those statistics. The Governor of the Central Bank should be ringing alarm bells if those statistics are correct.”
We believe Sione has made some very important points that are worth thinking about. For instance, why is the government silent and not disputing these reports about illicit financial flows? Should we take their silence as confirmation that these reports are accurate?
And in that case, what does this mean for Samoa? Where is transparency, accountability and good governance that Prime Minister Tuilaepa continues to gloat about?
We ask these questions because we believe the time is right for Samoa as a country to discuss these issues. It’s about time we look into it with level heads and the idea of addressing them without getting into the silly name-calling from politicians every time these issues are raised.
There is no denying the fact that it’s an uncomfortable topic, one many of us would rather not think about. But we believe it’s important to discuss what’s happening, understand the implications and be open about ideas on a way forward.
In other words, it is essential that our people are well informed and for our leaders to be up front about the truth. Besides, if we are really in trouble, as these warnings continue to say, then the people have every right to know. Don’t you think?
After all, Sione is not the first one to raise these questions. Over the years, international institutions such as the International Monetary Fund and the World Bank have issued numerous warnings to Samoa in relation to our external debt.
In 2013 for example, the Bank warned that Samoa’s public external debt was “high-risk” and that the government was in danger of breaching policy limits they had previously agreed to.
But that wasn’t all. Not long ago, the Bank also warned about “debt distress” where public loans would exceed 56 per cent of economic activity each year. That, we believe, is already the case.
So what is the government doing about these warnings? Does it care at all?
As far as we are aware, Prime Minister Tuilaepa has on a number of occasions assuaged fears about the issue, saying there is nothing to be alarmed about.
According to Tuilaepa, it is not the amount of a country’s debt that its leaders should be worried about.
Rather, it is a country’s ability to service the debt. And in Samoa’s case, he assured that Samoa’s debt service capacity is strong, saying the country is generating more than enough revenue to sustain the debt. Fair enough!
But here’s what boggles the mind. If what Tuilaepa is saying is true, then why on earth does Samoa need to continue to borrow more millions?
Why has our foreign debt ballooned from $15million when the H.R.P.P. came into power to $1.4billion today?
If this country has so much money, as the Prime Minister claims, why then is the cost of living so ruthlessly expensive? And why are people being punished through the ridiculous cost of electricity and other basic utilities?
Why is there so much poverty and hardship in Samoa today? What about those children begging on the streets of Samoa? What do they tell us?