Spend more: Economist

March 04, 2009 10:34:51 AM

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Economist Dr Biman Prasad believes wrong policy measures implemented by the interim Government have led Fiji to its current economic state.

And he wants the interim Government to spend money to make money instead of a tight policy.

Prasad said the local economy had undergone serious problems since the 2006 coup, and the tight fiscal policy implemented thereafter was not a wise idea.

He said the recent flooding, mostly in the Western division, directly impacted Fiji’s golden goose, the tourism industry.

He warned of possible impacts from the global meltdown, particularly with continuous economic slowdowns and job losses in Australia and New Zealand, which he said would definitely affect exports, tourist numbers and remittances.

He said Fiji’s ability to ride through this period of significant economic downturn would depend on some factors.

“First, we need to look at the policy measures that we could adopt in the short-term to spur and stimulate the economy,” Prasad said.

“The Government may not have much choice but to borrow more to ensure that it continues to spend money on the infrastructure, and use some to rehabilitate the sugar industry,” he said.

Prasad said the agricultural sector also needed a stimulus to ensure continuity in economic activities, particularly food production.

The Reserve Bank of Fiji (RBF) this week highlighted, in its economic review for last February, the country’s Fiji’s widening trade balance, recorded at $1.9 billion by November last year.

The central bank said although Fiji’s exports rose by 16.7 per cent, it was overshadowed by the 24.2 per cent growth in imports.

Earlier, he called on key players to avoid the blame game and focus on rebuilding the economy.