Countries struggle to meet loan repayments: PANG


    By Nacanieli Tuilevuka

    Many countries in the Pacific are struggling to pay off their loans during this coronavirus pandemic.

    The Pacific Network on Globalisation (PANG) coordinator Maureen Penjueli said during this coronavirus pandemic many countries are taking more loans to help keep them afloat.

    Penjueli while speaking during the coronavirus economic recovery workshop said countries like Vanuatu, Tonga and Samoa and Fiji have overdue date loans to pay to China.

    She said it will be difficult for countries in the Pacific to recover from the economic effect of the virus post coronavirus due to the loan they have to pay.

    “The key issue need to be discussed during the forum economic ministers meeting next week by leaders are economic recovery and debt,” she said.

    “Leaders need to pay attention more to the debt that needs to be paid immediately. More countries are taking up loans during this coronavirus pandemic.

    “Countries like Vanuatu, Tonga and Samoa and Fiji have overdue date loans to pay to China. The countries are taking more infrastructure-based loans during this pandemic.

    “There have been some grace periods but there is very little articulation at least from our governments at this stage.

    “This is on whether they will be asking for debt forgiveness or debt cancellation. And I think that this is quite critical.

    “We’ve got to position ourselves that any kind of economic recovery, its basis cannot be for more and more debt in our region.

    “It would just bite all of our generations to come on the basis of recovery. Is recovery going to be on more loans, I think that’s quite critical as a regional agenda,” she said.

    Penjueli said incursion into the Pacific Island countries policy spaces will become critical as they receive budgetary assistance from their development partners.

    “We are seeing more budgetary support going into countries right now from our key partners. This means that the incursion into our countries policy spaces will become critical,” she said.

    “A lot of budgetary support is going into the health sector, in terms of building up the infrastructure and paying for civil servants. Salaries are where a lot of the direct budgetary support is going.

    “There is a possibility that direct budgetary support will increase, in the absence of government’s ability to raise revenue, we need to be monitoring what it means for policy space.

    “If countries want to diversify, they want to protect policy spaces whether to address key elements, whether it’s airlines and aviation, agriculture.

    “Sometimes these kinds of conditionalities in loans will affect how our countries will be able to recover. I think that’s why debt and loans are quite critical,” she said.

    She said economic recovery cannot take place without clarification around vaccine response, the two are tied together and they’re not separate.

    She said economic recovery will depend on how quickly the members of the public can support vaccination in the Pacific.