Investment as Percentage of GDP The Bainimarama Government is proclaiming that Investment as a percentage of GDP is now well over 25% which on the surface can be a good indicator for any economy. BUT the bulk of this investment is still public sector investment (especially in roads and water), whose actual rate of return is unknown, but I suggest is probably far less that the Rate of Return on the public assets that the Government is planning to sell. Private sector investment is still far less than the public investment, and it is the former which will contribute to healthy economic growth, because private investors will not invest unless they are going to make money. Ministers of Finance when they invest tax payers money, never ever exercise the due diligence that they would if they were investing “their father’s money”, and as Indo-Fijans like to point out when governments waste tax-payers’ money (“baap ke paisa nahin hai”). While there are many private sector investments taking place now, tax payers can hope that this becomes generalized enough to ensure that the Private Investment as a percentage of GDP gets about 20% or so. That remains to be seen. By: Professor Wadan Narsey
Posted on: Mon, 01 Dec 2014 05:04:16 +0000
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