Home » Uncategorized » The current account deficit – how long is the fuse?

The current account deficit – how long is the fuse?

It’s eight months to the all important election and Bainimarama plans to use every minute between now and then to buy support.  A lot of people think this is likely to be successful even though it’s completely hypocritical for Bainimarama who claimed Qarase ‘bought’ the  support of iTaukei villagers with Government money.
But there’s another side to this story which was revealed in the January Reserve Bank of Fiji bulletin. The gap between export income and the import bill is widening.  We all know Bainimarama’s spending spree is all being made with borrowed money but when will the foreign exchange  crunch come?  How long is the fuse he lit?
We don’t have any new exports to fill the gap left by the halving of sugar production, the drop in prices we receive for sugar and the loss of EU aid after Bainimarama decided he didn’t want it if it came with a lot of talk about democracy and the rule of law. 
The current account deficit will widen further this year with all the spending being pumped out by the Elect Bainimarama Campaign called the 2014 Budget. People are spending and this will mean a steep increase in imports.
Sooner or later, the current account deficit has to be made up by the capital account, which means investment, borrowing from overseas or sale of the FNPF’s last few overseas assets.  We should be able to ask the RBF where they expect the funds to come from – how much from investment and how much from borrowing?
The fact is the RBF cannot speak freely because it is not allowed, and that is enough to make any genuine overseas investor hold back their funds.  And it looks like genuine investors are holding back.
Even if the heavy-handed exchange controls which make it hard for companies from to remit profits are tightened,  there’s a danger that foreign exchange will run low this year and trigger  a crisis like the one that led to the devaluation in 2009.  The more successful the election spending spree is in stimulating spending by consumers, the shorter the fuse.
If anyone from the RBF tries to warn Bainimarama or AS-K of what could happen, they risk being slapped down for being negative, which is why a regime like this can be guaranteed to make a mess of government. 
 

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35 thoughts on “The current account deficit – how long is the fuse?

  1. Alleged rape victim gives evidence in court
    Publish date/time: 27/01/2014 [12:03]

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    Email this page A high school student who was allegedly raped by her form teacher in 2011 is currently giving evidence in the Suva High Court.

    The trial started before Judge Justice Paul Madigan today.

    The student who is now 18 years old informed the court that on 13th March 2011, she had gone to her form teacher’s quarters with her friend to buy noodles.

    When they reached the quarters, her form teacher was inside his quarters.

    They set there for a while and then the teacher came out and started talking to her friend.

    He then allegedly told the victim to go inside the room.

    He allegedly followed and locked the room where the alleged incident occurred.

    The teacher is charged with one count of rape.

    The incident happened on an island in a boarding school in the eastern division.

  2. Reserbe Bank of Fiji, and in particular Jone Kubuabola and his then sidekick Sada Reddy have yet to tell Fiji’s taxpayers how loudly they were snoring when NBF was giving out all those bad loans which would result in bankruptcy.

    RBF, Kubuabola and Reddy failed in their prudential supervision role and really ought to be brought to account for this failure which cost the country hundreds of millions of dollars

  3. Kubuabola and Reddy ain’t got nothing on Reddy (again), Whiteside, Naiyaga, Waqabaca, Taito, Tikolevu, & Uluilakeba all overseen by the clueless Finance Minsta Bainimarama and his side-prick Khaiyum the both of whom wouldn’t know Income vs Expenses from their sphincters.

    The fuse does not have very long to go now thus the rush to spend, spend, spend by bureaucrats in the ignorant hope that voting taxpayers will naively laud the development, tick their boxes and ignore the glaringly oblivious fact that the economy is in the red.

  4. Bill Carson fark your father, it is now 2014, why the fark you keep taking us back to last century to post the blame for current RBF shitty performance. What can we say when we have the current lot of RBF spineless, ball suckers and a’hole licking executives too busy and deep into this orgy.

  5. “” The fact is the RBF cannot speak freely because it is not allowed “”

    Just wonder how the author of the article can justify the word ‘fact’ in this statement?

    Suggests more drivel from this amateur expert on everything other than the expertise to clearly demonstrate that no one should take anything he writes seriously.

  6. Hey ratu bai give it up the game is over you have done your 8 years, ca gona qo ni da dau toso vaka vanua ena vanua eda cakacaka kina ,drau veicai kei nomu boso na ulukau levu epeli ganilau

  7. If four months after a citizen’s report of water gushing out of a broken water main at Kanavi St “nothing has been done” (Fiji Sun editorial 27/1) then that is the sort of thing we had under the Qarase Government.
    I recall reporting a similar water leakage at a spot next to the fish market at the Nokonoko Rd Bailey Bridge and nothing was done to fix it.
    But the Bainimarama “clean up” government was to put an end to this kind of slackness in our service delivery systems with its “reforms” and all that.
    Eight years into the Bainimarama government rule and reforms we still hear of the same the kind of slackness.
    And yet instead of questioning why this should be so under Bainimarama government’s watch the pro- Bainimarama government newspaper the Fiji Sun’s managing editor training Nemani Delaibatiki talks about taking “a leaf out of Prime Minister Commodore Voreqe Bainimarama’s book on how to fix things” !! conveniently forgetting that shit continues to happen under Bainimarama !!
    One would have thought a veteran journalist and now a journalist trainer like Delaibatiki would have known the Commodore’s “whirlwind tour of Ba and Nadi” to met with the public and the military troops to listen to them and do what needed to be done had more to do with election campaigning then fixing problems with his magic wand.
    But we know it’s Nemani Delaibatiki and the Fiji Sun’s way of glorifying the dictator to garner support for his election.
    Expect more “whirlwind tours” from the Commodore – using State resources for his election campaigning – in the coming months as the country heads for elections after 8 years of the Commodore’s dictatorial rule.
    And expect Nemani Delaibatiki, Jyoti Pratibha and Maika Bolatiki and the rest of the pro-regime mob at the Fiji Sun to continue to canvas support for the Commodore through their “independent” newspaper!

  8. Navosavakadua

    Thank you for your analysis on the current account balance. I must congratulate on your effort and zeal to understand the matter and make conclusion on your limited knowledge of the subject matter.

    Firstly, we all acknowledge that fiji is no different from other small open economies that have a large trade deficit due to import of fuel, food, medicine and machinary.

    However, our current account balance has been more stable in the last five years and it has ever been. The current account is a more broader and more widely used measure of sustainability as it includes tourism, remittances and the like.

    The reason for the devaluation in 2009 is not because the IG efft it up but because the SDL govt was borrowing. So much for operational spending causing a huge hole.

    Now, go back to the reason why SDL borrowed the US$150m in the first place. In fact, SDL borrowed $1.5b between 2000 and 2006m the IG has boroowed around $0.9b between 2007 and now.

    In fact, the IG has borrowed less if you take into account the F$300m parked to repay the
    US$ bond.

  9. vishwa
    a typical hanuman monkey with the usual bullshit figures boci…..just get it into your thick head that we want to elect our own leaders

  10. @ Vishwa – “Firstly we all acknowledge that Fiji is no different from small open economies that have a large trade deficit due to import of fuel, food. medicine and machinery.”

    This is utter rubbish! Fiji is so different from small open economies because Fiji’s public finances is un-audited and not availed for public or parliamentary scrutiny. Importing medicine and machinery is understandable when the evidence is there in hospitals and in the state of infra-structure development. There is nothing to show for this, especially when hospitals are normally desiring more medicine and the only infra-structure work carried out is that which is funded by the Chinese exim-bank! Bainimarama and his advisers are being watched more closely now than ever because everyone knows the kitty is getting smaller! The spending over the last 7 years has already altered Fiji’s financial capacity and UN contracts for soldiers will not be regular to fund a heavy military budget let alone pay soldiers who are now carrying out public works. Economic forecast for Fiji is gloomy because there is so much uncertainty as to what this election is really about. What has become more obvious from the way Bainmarama is stage-managing this election is that it is not for freedom and democracy that Fiji really deserves but a way of getting back what has been lost from development partners and international donors in funding and trade. It does not take rocket science to understand why investors are still not keen on Fiji right now. The state of the court and depressing state of accountability in public finance are just the kind of problems that shy them away! The big hole in the budget is growing even bigger as we blog and sale of overseas assets by the junta won’t really help Fiji’s cause in the long term! As a small open vulnerable economy, Fiji always preferred trading and relating with a range of countries to its advantage. It makes sense not putting all eggs in one basket as Bainimarama has seemingly done with China. Breaking ties with the EU and other traditional donors is not a wise move and it will certainly come home to roost!

    Vishwa you are indeed a typical hanuman monkey because your comments show your limited knowledge of national budget strategy. You would be wise to look more carefully at what is really happening with the management of public finances to understand what Bainimarama and cronies are all about and are up to at this juncture!

  11. Let us not forget that Fiji currently has the smartest Finance Minister in its history. He has graduated from Princeton with a PhD in economics and knows that independent advisors such as Aunty Nur.

  12. Graham
    Please refrain from implying that I advise Frank. He is so thick that even a brick would be less resistant to advise. Frank is interested in two things: Money (lots of it) and Power (not the type that FEA sells).

  13. Waste time misleading analysis by the author of the article.

    Fiji will soon be a ‘Singapore’ of the Pacific – all this because of the good works of my man VB and his dedicated team.

    Vinaka VB – Fiji’s best ever PM.

  14. I am reminded of the collapse of our national bank years ago ie. NBF.

    Now during the military government rule , we will have another national bank called HFC .

    So we really have both good and bad in any government . no one is perfect .

    Rt voreqe has removed money going to few chiefs and re-directed to chiefly members and true landowners.

    We still have to hear from Auditor General of rumors that RT Voreqe is pocketing 300k to 1m per year. he will lose votes once people know the truth.

    GOD BLESS FIJI

  15. Nabua Prince you are really ulukau. Grow up and base your comments on facts not around VB’s balls.

  16. Vishwa. assuming if you are working for the Ministry of Finance, its a wonder our economy is phucked. Typical of Regime cronies trying to pull the wool over our eyes. Yes keep the loans going but eventually these will need to be paid. and guess what with no EXTERNAL investment to pay for the short-fall, we will end up like Greece; falsifying the national accounts for a few. You regime cronies must think we are dumb Fijians.

  17. Yes what bai is doing now is stage managing the election process to get himself elected. Election has become a must for bai because he needs to legitimise his rule albeit illegitimately and open the door for aid to resume. We need more transparancy than what is currently happening. The regime need to walk the talk and not just be hypocrites. We are waiting with so much eagerness for the Auditors report to form an informed opinion on the state of affairs of the nation

  18. FB all the way. No to SDL. No to racist government. God has shown us christains that we must live by the bible and not go astray.

  19. @ Tamai Miller Shit head

    What good have you and your party done for Fiji? Tell us sara mada?

    Hear this kido, you have done nothing – but just gush hot and foul air all day.

    My man VB has done alot for this great nation and Fiji is thankful to him.

    Fiji wants him to continue the good works and be the elected PM for another 4 years.

    And guess what – my man VB will continue to be PM for he will win this election fair and square.

    Vinaka VB.

  20. Nabua Prince we have done a lot of good things for Fiji. Most importantly we had won our place in government through the power of the people not through the gun as is the case of your hero VB, you arse hole.

  21. @ Tamai Miller shit head.

    Name the political party and identify which race you belong to arse hole! So we can truly see where you stand.

    Fiji needs to know whether you are a racist Fiji Indian who cursed all itaukei intellectual elites (as noted in the previous postings) or a cockroach iTaukei who slur at his own kind or a Fiji European who have no respect for the people of Fiji or some shit head out of this country who wanna interfere in something he doesn’t understand.

    Tell us sara mada you little cockroach racist son of a shit head!!!

  22. Tamai Miller shit head – where the f are you?

    Answer the bloody question you little cockroach!!!

    Hehehehehehe ……………….

    Look here boy!!!

    I said look here!!! Boy!!!

    Hehehehehe …………….

    You cockroach, shit head borthy!!!

  23. Nabua Prince I am your real father. You were conceived during one of my brief affairs with your mum. Now you have identified me so behave yourself and release your grip from VB’s balls.

  24. Hehehehehehe ………………. side stepping the question!!!

    I say – answer the question shit head!!!

    You’re just an insignificant little borthy!!!

    You hear me!!!

    Cockroach!!!

  25. Tamai Miller got fucked. Na boci ga na boci.
    Kua mada na vosa vakalialia tiko. Kai Viti vakacava o iko?
    Tamai Miller.iko na kawa ni kaisi.
    Ulukau.

  26. Tamai Miller. Sonalevu. Kai Viti vakacava o iko? Ulukau. Sonalevu. Vei nomu koro? Mera kila mada na nomu vosa vakalialia. Sonalevu.

  27. @ Nabua Boci
    can you reveal your identity so that we can see how significant a borthy you are in the VB set up?

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