We must not borrow more than we can repay

 THERE has been much talk over the prime minister’s decision to borrow K3 billion to finance the purchase of some shares in Oil Search Ltd.
I would like to highlight a few important points that many people may not understand or are confused about.
Firstly, it has become quite clear now that Peter O’Neill breached various laws and regulations when he went about sacking the treasurer solely for the purpose of signing the loan deal himself.
When the news became public, the prime minister tried to justify his actions with economic and financial rhetoric.
Here are a few facts that he failed to highlight or inform the public about.
Firstly, as the former treasurer Don Polye correctly pointed out, the buying of shares of a publicly-listed company is a purely speculative investment, meaning there is no certainty that the investment will be profitable.
It could turn out to be a bad one and as such, there should have been wider consultation instead of heavy reliance on the advice of foreign consultants.
Secondly, most of these foreign consultants are heavily sponsored by multinationals.
When you study world politics and economics in detail, you will find that these foreign consultants or so-called financial experts are largely to blame for the collapse of the economies of many countries (especially on the African continent).
Most have been kicked out of many countries which have instead opted to trust and rely on their own financial and economic experts.
Lastly, and most importantly, despite all the economic and financial explanations or rhetoric used to explain the decision to sign the loan, the simplest analogy would be that of an ordinary employed individual (income earner).
A country is like a person who works and earns a regular, steady fortnightly wage.
The worker or employee must not borrow more than what he earns or is able to repay in a fortnight.
If that individual is earning K600 a fortnight, he cannot afford to borrow K600 or more in a fortnight.
What our prime minister has effectively done is similar to the K600 employee borrowing more than what he can repay, so that he may use the money to try his luck at the pokies.
And he has done so without any input or consultation from his other family members.

Frustrated Citizen, Via email