“To say that our kids will suffer is wrong. We are implementing the developments, reaping the fruits and we are also paying for it at the same time. What’s so difficult about that? There is no difficulty whatsoever” – P.M. Tuilaepa Sailele Malielegaoi
Samoa’s foreign debt is “just over $960 million” but there is nothing to be alarmed about.
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So assures Prime Minister, Tuilaepa Sa’ilele Malielegaoi, amidst concerns expressed by members of the Opposition party, who claim that the debt has exceeded one billion tala.
“Looking at it now, we have a debt of just over $960 million,” Tuilaepa said during his weekly media conference.
“And we are paying $51million every year.”
"The annual payment is peanuts."
“The government revenues exceed $700million a year,” continued the Prime Minister. “Which means that when you look at payments of $51million compared to revenues of more than $700million, the government’s financial position is very strong.”
Tuilaepa was again asked to address concerns about the economy with claims that the country’s debt-to-Gross Domestic Product (G.D.P) ratio has reached 65 per cent.
The Opposition fears that any more debt could cripple the economy.
They have also expressed concerns about the future generations of Samoa having to shoulder such a burden.
But Tuilaepa was dismissive.
“There’s nothing to worry about,” he said.
“When it comes to borrowing, there are two things you have to look at. You have to have enough revenues and you must have enough foreign reserves. That’s why tourism is so important because that’s where we are earning our foreign reserves.”
Tuilaepa said Samoa has a very good debt service ratio and “that’s why anytime we need to borrow some money from whatever organisation, they give it because they see that we have the ability to service the debt."
“I’ve tried to explain this so many times to the Opposition but they don't understand,” he said.
Tuilaepa then took a trip down memory lane. He stopped to compare the current debt of “over $900 million to the $15million we owed back in 1980 which we couldn't pay.”
“That was because we had poor foreign reserves and that’s why we couldn't loan anymore."
“I’ve always tried to explain in Parliament that it is not the amount of the debt that matters but it’s our ability to meet our annual payments.”
The Prime Minister, who is also the Minister of Finance, reminded that most of the loans are soft loans, the type that with grace periods of over 20 years.
“So there is no reason to worry.”
As for fears about future generations shouldering the debt, Tuilaepa said such claims are “unfounded.”
“In Parliament, I said look, that’s from a theory book for beginners in economics.”
To highlight his point, he said: “If you borrow $500 from the Development Bank for a cabbage garden, you’ll take three months to sell your cabbage.
“When you are finished, you go and use the money you made to pay it. What does that mean? You are paying it during your time, rather than waiting for your children to pay for it. So the same thing is happening with the government now."
“We’re getting money (from loans) and we are using it to improve infrastructure such as bridges and then we are moving to pay it."
“So to say that our kids will suffer is wrong. We are implementing the developments, reaping the fruits and we are also paying for it at the same time."
“What’s so difficult about that? There is no difficulty whatsoever.”
Tuilaepa again reverted back to the early days of the ruling Human Rights Protection Party (H.R.P.P).
“We need to remember when the H.R.P.P rose up to lead this country. That was when all the doors were closed.”
Tuilaepa said when they came into power, he took over the Finance portfolio and immediately put in place long-term plans to improve the economy.
“And that’s how we’ve arrived here today,” he said.
“So there’s no need for these new boys to worry as I was there during that time to solve the problem."
“Remember those days when there was only one shipment of rice and people would fight over it? None of that is happening anymore."
“People are no longer fighting over rice and cans of herrings.”
Tuilaepa said it’s good to remember what happened in the past so that people can appreciate where this country is today.
“I keep referring to this time because the new crop of Members of Parliament don't understand it,” he said.
“The only people whom we stood together in 1982 who are still in Parliament are Le Mamea Ropati, Pule Lameko and myself.”
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