Radio New Zealand - Te Reo Irirangi o Aotearoa

Political instability puts French Polynesia on ratings watch downgrade

Posted at 02:53 on 26 November, 2009 UTC

The political instability in French Polynesia has prompted the ratings agency Standard & Poor’s to place the territory on a watch for a downgrade.

It is now on BBB+ as French Polynesia’s assembly has just dumped the President Oscar Temaru.

The new President Gaston Tong Sang is set to form a government in the coming days, the 12th since 2004 and the fifth since last year’s early general election.

The ratings agency said the new no-confidence vote could delay the economic recovery through a new destabilisation of investors and complicate or delay reform efforts.

The parliamentary coalition was the largest in years when it was formed in April but it crumbled over disputes about the 2010 budget until the government’s fall this week.