Samoa’s debt still manageable
Interesting reading your editorial on Sunday titled “Church tax not about theology, E.F.K.S. or whatever. It’s about money.”
The newspaper has a right to voice its opinion. In this newspaper’s opinion, the government is desperate because it is heavily indebted. However, this opinion needs to be balanced with some context.
In the 1980s, the debt to G.D.P. ratio of this country was sitting in the 80% mark, reaching 88% at one point. I remember not all too long ago, it was at around 63%. It is currently sitting around the 50% mark.
50% is not the greatest in the region (NZ debt to GDP ratio is at around 25% and they think that is bad) but it is certainly not desperado territory.
Certainly compared to some other big economies around the world - USA 100%, Japan 250%, Italy 130%, UK 85%. Samoa’s 50% compares very well even though yes we do have a small developing economy and we cannot afford to let debt go up to anywhere the levels of the 1980s.
The reality is this.
1. Samoa’s debt is still very much manageable. Samoa is certainly in control of its debt repayments. In fact, it has a very strong reputation in the pacific for debt repayments.
2. The government have recognised that even though debt is manageable, they do not want the debt to get beyond 50% and are aiming to get the debt ratio down to below 50%. For example, no new loans if they can help it. The aim is for the new Vaiusu port to be financed totally with grants; not loans.
3. For all the fear-mongering about China in the pacific and with the likes of S.S.I.G. and O.L.P. suggesting that Stui is selling Samoa to China, Tuilaepa still has the confidence of our major regional allies - New Zealand and Australia.
In fact, unlike Fiji which is actively promoting a “look north” policy towards China, Samoa’s foreign policy still heavily promotes our traditional allies in the pacific in NZ and Australia as well as promoting newer ties with the likes of China.
In fact, Stui is probably the biggest supporter of N.Z. and Australia in the Pacific Islands Forum.
Compare that to Bainimarama who wants to increase ties with India, Russia and China and refuses to return to the Pacific Islands Forum until NZ and Australia are kicked out.
In other words, Tuilaepa’s foreign policy is balanced. In true Samoan fashion, it is a foreign policy, which balances between the major powers in the region, so that Samoa remains in control. It is certainly not all about China as some would have you believe.