THE Leader of Opposition has labelled the explanation given by Finance Minister Harry Kuma on his exploration of a USD100 Bn loan from Chinese interests as “an exercise in deception”.
Minister Kuma said that the proposal is still in the initial discussions and only at ministry level. That he wanted his officials to get more information on the deal.
However, Hon. Wale points out that the Minister directed the Debt Management Advisory Committee to meet on the proposal on at least two occasions already. And this was after strong reservations expressed by the Debt Management Advisory Committee in its first meeting against proceeding further with exploring the loan proposal. It is clear, although the proposal is in its primitive stage, the Minister is under instruction to get the Debt Management Advisory Committee to approve it for further processing. Hon. Wale calls on the Minister to publish the minutes of the Debt Management Advisory Committee on this proposal.
“We know in a matter of such gravity the Minister is not one to be assertive. We know his personal temperament and conservatism in matters of fiscal policy. The Prime Minister is the one directing the Minister on this matter. “And it is irresponsibility writ large” states Hon. Wale.
The Finance Minister further stated that any loan must be taken in the framework of the Debt Management Regulation requirements “one of which is, that it must generate income so we can repay the loan”. However, Hon. Wale points out that the magnitude of this USD100 Bn loan itself should put the Minister and Prime Minister on alert, if they were acting responsibly. This USD100 Bn loan is proposed by a private individual Mr. Terry Wong. The fact that a private individual is proposing to the government to borrow should raise red flags in fiscal management. Loans should be tied to government development plans. It is the government that should be making proposals to legitimate and reputable lending institutions based on properly assessed development projects that satisfy proper feasibility studies.
Hon. Wale further states that it is irresponsible of Minister Kuma to “accept in principle” the 11% brokerage fee proposed by Terry Wong, the promoter of the loan scheme. It is either that the Minister is incompetent or worse. Hon. Wale points out that by accepting the USD11 Bn commission to Terry Wong, the Minister is also saying that it is to be repaid by future generations of Solomon Islanders. How are young Solomon Islanders supposed to feel about that? Usual rates of commissions on large transactions are less than half of 1 percent. Why would Minister Kuma “accept in principle” a 11% commission, Hon. Wale asks. This is a very serious questions the Prime Minister must explain to the nation.
“Why is the Prime Minister even entertaining schemes that even on the face of it already appears very suspicious?” Hon. Wale asks. He further states, on the basis of the documents and loan proposal alone cited, a responsible leader would have ruled out any further exploration of the idea. “The documents have all the characteristics of a scam, but the Prime Minister is bling to those”, states Hon. Wale.