Opposition concern over USD$100B loan - Solomon Star News

Opposition concern over USD$100B loan

20 February 2020
Matthew Wale.

The Leader of Opposition Matthew Wale calls on the Prime Minister (PM) to confirm or deny information that he authorized the Minister of Finance to explore the borrowing of USD100 Billion from lenders in China.

Mr. Wale in a statement last night said that information he has received has given him cause for great concern about the government’s borrowing intentions. 

“The scheme being explored by the Finance Minister, if true, will place the Solomon Islands in a very dangerous fiscal situation for many generations to come. It is important that the Prime Minister explain to the nation why he has authorized his Finance Minister to pursue this.”

Mr. Wale stated, Solomon Islands GDP is currently only around SBD10 Billion. USD100 Billion borrowing is 80 times more than the current Solomon Islands GDP and it is obviously beyond the capacity of the economy to service debt at such levels. 

“As a matter of fact, there is no country in the world, save perhaps for the USA, which is capable of servicing debt at the levels being pursued by the Finance Minister on behalf of the government.

“The Prime Minister is prone to get-rich-quick schemes and this lends the government very vulnerable to con-artists proposing con-schemes,” Mr. Wale said. 

“The Prime Minister and Finance Minister must not entertain borrowing schemes that are disproportionate to our economy’s ability to sustain and the government’s capacity to repay in the future,” Mr. Wale said.

He further calls on the Debt Management Committee to be vigilant in the national interest and not be intimidated by their political superiors. 

Mr. Wale stated, “in matters of borrowing, we have a lot of unpleasant history and experience and it is precisely because of that experience that the Debt Management Framework and Committee are enshrined in the Public Finance Management Act. 

“This is to ensure transparency, common sense, and fiscal responsibility in the government’s borrowing decisions. These legal protections are meant to protect the Solomon Islands from reckless borrowing. 

“It is incumbent on those tasked with implementing these legal mechanisms to ensure transparency, common sense and fiscal responsibility in all government borrowing intentions and decisions,” he said.