USD$100 billion loan – Poor judgment & reckless
In responding to the statement issued by the Ministry of Finance on behalf of the government on Thursday 27th February 2019, the Leader of Opposition, Hon. Matthew Wale, said that the statement merely confirmed the country’s worst fears.
The statement confirmed that the government was in fact seriously considering the USD100 Bn loan proposal – in other words the government is interested in it. Sober rational judgement would dictate that the government reject outright such a proposal when it was received – but this did not happen because the Prime Minister is interested in pursuing the loan.
“The Finance Minister’s letter “accepting in principle” the 11% commission was back in November 2019, and the government is still considering the loan proposal in February 2020. This is clear evidence of the government’s interest to pursue the loan.
“Further the fact that the Finance Minister “accepted in principle” the 11% (USD11Bn) commission is evidence that one aspect of the loan was already accepted “in principle”. The Minister’s signed letter to Terry Wong is evidence of this,” says Hon Wale.
The Opposition Leader said the Finance Minister would not have “accepted in principle” the 11% (USD11Bn) commission unless directed by the Prime Minister to do so.
He adds that the Prime Minister’s defense of the loan in Tuesday’s caucus meeting is clear evidence of the fact the Finance Minister is being directed by the Prime Minister in this matter.
“Yes, it is within the role of the Finance Minister to consider loans. No one is disputing the Finance Minister’s authority to do this.
“However, Solomon Islanders are questioning the judgment of the Prime Minister and the Finance Minister in even “exploring” a loan of an amount that is way beyond the capacity of the country to afford, and “accepting in principle” a commission that is excessive and represents a yoke on the neck of Solomon Islanders for many years to come,” Hon Wale further adds.
Wale points out that Solomon Islanders are very concerned by the clear lack of judgement by the Prime Minister and Finance Minister, stressing that with such leadership, even the best debt management framework is vulnerable. Solomon Islanders are clearly worried about this.