Government's stimulus package gets thumbs up
An economist has given the thumbs up to the Government's $66 million tala economic package to cushion the impact of the coronavirus (COVID-19) global pandemic on the local economy.
Economist and lecturer at the National University of Samoa (N.U.S.), Peniamina Muliaina, told Samoa Observer that the measures announced by the Government as part of its $66 million supplementary budget would assist people.
"I give the thumbs up right now to the Government for the stimulus package because it is a great help for everyone that is needed right now," he said.
But Mr Muliaina then urged the Government to approach multilateral financial institutions such as the World Bank, International Monetary Fund (I.M.F.) and the Asian Development Bank (A.D.B.) for funding assistance.
“Where else do we get financial assistance when we need it urgently, multilateral organisations are always the ones who are able to fund assistance of their member countries so that is the right place to go for help, given that we honor our obligations to those institutions,” he added.
Another challenge is the duration of the COVID-19 global pandemic and its impact on the Samoan economy, though Mr Muliaina said he is confident the Minister of Finance Sili Epa Tuioti, has plans to cater for a prolonged pandemic.
"I am confident that there are other options available should we get to the end of six months and the pandemic continues. I think he has other options, perhaps looking more to our development partners since our G.D.P. ratio is still below what it was more than 10 years ago," he added.
Given the gravity of the health crisis, Mr Muliaina said it is okay for the Government to borrow.
"If the Government ends up having to borrow then that is okay with me. It is okay to borrow given the situation," he said.
While there continues to be concerns with Samoa’s public debt levels, the economist said he agreed with comments by Prime Minister Tuilaepa Dr. Sa'ilele Malielegaoi that the issue lies with Samoa’s ability to pay its debts.
"A lot of people worry about the debt but I agree with the Prime Minister, it is not the amount of the debt but it is the ability to pay the debt. The fact is that it is not the level of the debt, having said that our current debt is well below the level it was more than ten years ago,” he added.
Mr Muliaina said that going to Samoa’s bilateral partners is another option, but he would not recommend it as becoming dependent on another nation can be risky.
“When we lean too much on one country, like what it is right now with China, there is a risk there. That is why I recommend going to the multilateral organisations first such as the World Bank, International Monetary Fund and the Asian Development Bank."