Fiji Academic: 2010's National Budget Must Create Demand

November 28, 2009 7:13 a.m. EST

Suva, Fiji (AHN) - Fiji's 2010 Budget which was announced November 27 must create demand in the economy, a local academic believes.

Biman Chand Prasad, Professor of Economics and Dean at the University of the South Pacific's Faculty of Business and Economics said he is expecting that the Government will go for a bigger deficit budget than last year.

Speaking to AHN Media, Prasad said this increased deficit, however, must be used to support productive economic activities.  Some of this will have to go to social sectors such as housing and poverty alleviation, among others.

"Putting more money in the hands of the poor during a period of economic downturn will help create demand.

"In addition, there should be specific allocation for the development and maintenance of infrastructure," he said.

This he added, needs a lot of attention.

Last year's budget stood at $1.715 billion, an increase from the $1.528 billion previously allocated for 2008.

From this amount, Government targeted an operating revenue of $1.522 billion, out of which $1.33 billion was raised through taxes and $191.2 billion from non-tax revenues.

Also in last year's budget, priority areas included Health, Education, Poverty Alleviation, Investment, Tourism, Resource based, and export oriented industries and also to improve efficiency and effectiveness of government spending and reforms in particular the Financial Management Rerform , Civil Service, and Public Enterprises.