Managing Fiscal Risks from National Airlines in Pacific Island Countries

Pacific island countries (PICs) rely on national airlines for connectivity, trade, and tourism. These airlines are being struck hard by COVID-19. Losses will weigh on public sector balance sheets and pose risks to economic recovery. With a backdrop of tight fiscal space and increasing government deb...

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Bibliographic Details
Main Author: Balasundharam, Vybhavi
Other Authors: Hunter, Leni, Lavea, Iulai, Seeds, Paul
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2021
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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653 |a Nonprofit Organizations and Public Enterprise: General 
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653 |a Budget Systems 
653 |a Public financial management (PFM) 
653 |a Economics: General 
653 |a Economics of specific sectors 
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653 |a Public Sector Accounting and Audits 
653 |a Economic & financial crises & disasters 
653 |a Accounting 
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520 |a Pacific island countries (PICs) rely on national airlines for connectivity, trade, and tourism. These airlines are being struck hard by COVID-19. Losses will weigh on public sector balance sheets and pose risks to economic recovery. With a backdrop of tight fiscal space and increasing government debt, losses in airlines are adding to fiscal risks in some PICs. This paper discusses tools to evaluate and manage the fiscal risks from national airlines in the Pacific. We present a snapshot of the current state of Public Financial Management (PFM) practices in PICs and detail the best practices. This exercise would illustrate the areas in which PICs have scope to improve their risk management with regard to national airlines. We then discuss the use of diagnostic tools and capacity development to enhance monitoring and risk management. Greater transparency and accountability in the airlines, combined with rigorous oversight, would be the first step towards improved financial management of national airlines