P.M. blasts Lefau

Prime Minister, Tuilaepa Sa’ilele Malielegaoi, has blasted Tautua Samoa’s Member of Parliament, Lefau Harry Schuster, over his comments about the country’s ballooning foreign debt.

“Those kinds of noises are made by people who don't understand,” Tuilaepa said.

“They have never worked in the government to deal with finances.”

Back in the country after three weeks in New York, Tuilaepa was asked about Lefau’s claim that the government’s time is up and their penchant to borrow is driving the country into a hole.

During an interview with the Samoa Observer, Lefau was critical of Tuilaepa’s regime, saying they had put the country into debt, which would impact the next few generations of Samoans.

He was referring to the foreign debt, which has exceeded the $1billion mark.

“We have a situation from this current government, where our generation and four generations down will still pay that loan,” Lefau said. “It’s necessary to loan, only if you loan at the capacity you are able to repay the loan.” The impact of the debt is carried by everyone.

“When you are alive, you go into debt, you start a business and during your lifetime you want to leave that to your children debt free,” Lefau said. “That’s my approach to politics: you ensure that the debt you’re into is paid in your generation and leave it at a surplus.”

Asked about the risk of the country’s current debt on future generations, the Prime Minister said Lefau’s concern is not new.

“It’s a thought that is entertained by every country,” he said. “But there is no stupid country that limits its development in accordance to its revenue. If we did that, it would set back our development to as far back as 1985.”

The Prime Minister said donor partners give Samoa aid and financial assistance because they can see the government is trying with all its might to develop the country.

“(So those thoughts such as the ones by Lefau) is music to the ears of people who are weak,” he said. “The reality is that no business would be around today if they were to rely strictly on revenue. That’s why they borrow money.

“The reason why banks exist is to help develop local businesses so they can create jobs. It’s the same thing with any government.

“The difference for us is that we don't just borrow from expensive banks.”

Tuilaepa explained that before Samoa graduated from the least developed country status last year, the government never borrowed from the open market.

“The open market is expensive,” he said.

“Instead we negotiated with banks set up with a large component of grant element.

“It’s the same as China’s assistance to Samoa. They are helping us under two components, the first is aid assistance and the second is concessionary loans. In the end, we get the help we need, a longer period to pay it off as well as a grace period and low interest rates.”

Tuilaepa added that Samoa was in a much better position compared to other governments. He did not name any government in particular.

“Those governments borrow from expensive banks but we borrow from banks with low interest rates.”

Tuilaepa said there was no country in the world that didn’t borrow.

“If we were to stop that (borrowing), then we will turn around and increase taxes, cut the pensions and other benefits to ensure we keep the water, electricity running and those other things. So there’s nothing to worry about.”

Tuilaepa also gave Lefau a lecture about history.

“Keep in mind that the H.R.P.P came to power in 1982 because it was the country’s will. The people had seen that the government then was a mess.

“I was told that the government’s debt at the time was $15m and they couldn't pay. But at this time, there is no such thing.”

Prime Minister Tuilaepa said Samoa had come a long way.

“Compared to that time, we were only being fed pakua moa. We were only given chicken bones.

“People were fighting over a shipment of rice, at one point someone died.

“I understand that very well because I was at Treasury at the time. The shops were empty. But what do you see now? There is a variety of goods to choose from at the many different shops.”