Concerns are being raised about Guyana’s growing debt
Dear Editor,
Concerns are being raised in many quarters about Guyana’s growing debt. The latest report states that our debt is climbing. It is now more than 60% of the Gross Domestic Product (GDP). No doubt this concern stems from our recent experience. The previous PNC regime had saddled our country with a huge debt which had a devastating impact on every aspect of life in the society.
Much of the country’s revenues had to go towards servicing the debt. As a result the economy declined, social services deteriorated (health, education, housing, etc), and our physical infrastructure was in a state of disrepair (roads, bridges, etc). As the economy slumped, poverty became widespread. Our per capita income was just about US$300.
The PPP/C government was able to turn that around. It repaid a large part of the debt ‒ more than US$1 billion ‒ and managed to negotiate other forms of debt relief including debt write-offs. The ratio of debt to GDP fell to about 40% of GDP at the end of 2014. The servicing of the debt was reduced to 5% of revenue in 2014.
The PPP/C government managed develop a strong infrastructure, both social and physical. Our economy grew strongly and the borders of poverty were rolled back. Our per capita income reached more than US$3000 and was steadily rising. That was the trend. Guyana was no longer a Heavily Indebted Poor country. It is now being described as a Middle Income Developing country.
The APNU+AFC regime is now putting these gains in danger. The debt is on the rise while economic activities have slowed down greatly. But that is not all. Of greater concern is the fact that the APNU+AFC regime has done nothing to encourage economic growth. Indeed most of their actions have had a discouraging effect on production and productivity in Guyana. Their prognosis too for the future points to further decline.
Their attitude is seen in stark relief in relation to the sugar industry. Sugar makes up approximately17% of GDP. Therefore the regime should be paying close attention to this sector. True, it is going through difficulties, but the answer is not the closure of the industry. In fact closing factories and cultivation will have a further negative impact on the economy. What is needed is more investment to develop value added products. Shutting or contracting that sector will limit the economic opportunities of the country. More unemployment and greater social problems will result, including more crime.
They have not identified anything to replace sugar. The mistaken belief that they would save will come back to haunt our nation. This attitude is seen in almost every productive sector.
The rice farmers are warned not to expect any help from government, they were told that the industry is private and therefore no business of the regime. No noticeable efforts are being made to find new markets and better prices. Things seem to be on auto-pilot. In fact duty concessions on machinery that the PPP/C gave to farmers are being taken away by this APNU+AFC regime.
Small miners in the sector are also being denied those concessions as well. As a result they are being pushed out of the sector.
In the meantime many important projects have been sidelined or scraped. The most noticeable is the Amaila Falls Hydro Project. That project has the possibility of accelerating economic growth. The regime seems to have abandoned it.
Their attitude in the area of taxation is unbelievable. While writing off billions of dollars for some big companies, they have been pressurizing the small producers and service providers.
Persons planting cash crops in their yards are being made to pay taxes, the donkey cart operators must now pay licences. This is causing a crippling effect on small businesses.
In the meantime they are not defending our revenues. We see them in some cases settling for what many believe are persons who made donations to their parties.
As if these are not enough the regime is demotivating the working people of our country. Imagine that one of the first acts of this APNU+AFC administration was to give members of the Cabinet a 50% increase in pay. They have also bumped up allowances for themselves. However workers are being offered pittance. Leadership is also by example. The example of this regime is taking as much as they can get for themselves. The masses must fend for themselves.
The road that this regime is taking Guyana will certainly lead to greater debts and contraction of economic growth and social services. It is important for the democratic forces to speak out now. It is not too late to arrest this decline.
Yours faithfully
Donald Ramotar
