ASIAN DEVELOPMENT BANK WARNS TUVALU
FUNAFUTI, Tuvalu (June 8, 2001 – Radio Australia)---The Asian development bank has warned the tiny central Pacific nation of Tuvalu that its healthy run of budget surpluses in recent years could be breeding a complacency that threatens prospects for future growth.
Radio Australia correspondent Sean Dorney reports that the bank’s annual assessment of the Tuvalu economy notes that there’ll be a 20 percent jump in the government’s recurrent spending this year to cover, among other things, a 100 percent increase in politicians’ salaries.
"Tuvalu’s government revenues last year were almost double the budget estimate thanks to windfall revenue from the lease of the dot.tv Internet suffix address.
"The Asian Development Bank says Tuvalu has followed a policy of fiscal restraint in the past accumulating a series of budget surpluses over the last decade.
"However, it says there are some concerns that the more comfortable financial position is bringing with it a greater tendency for ministries to be less stringent about basic financial management.
"The bank also warns that the balance of the country’s trust fund, which has sustained Tuvalu since independence, could fall well below the level necessary to guard against economic shocks.
"It comments that this year’s recurrent spending has been boosted to cover the opening of an Embassy in New York, a doubling of politicians’ pay and a 6.8 percent increase in the number of public servants.
"Sean Dorney, Radio Australia."
For additional reports from Radio Australia, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Radio Australia.