Skip to main content

FM
Former Member

Guyanese should be worried about rapidly increasing debt – Former Finance Minister Jordan

Nov 17, 2021 News -- Source -- Kaieteur News Online -- https://www.kaieteurnewsonline...nce-minister-jordan/

Kaieteur News – Guyana’s midyear report on its financial performance and standing as a country reported its total stock of debt to be some US$3B and according to former Minister of Finance, Winston Jordan, the country’s ballooning debt should be of concern to all Guyanese.

According to Jordan, the administration’s signaled intention to borrow several billions more is based on the assumptions that oil resources will continue to earn at current world market prices at some US$80 per barrel.

Former Finance Minister, Winston Jordan

Jordan gave his assertions during a ‘Plain Talk’ discussion with host, Christopher Ram, and in expressing his concerns about the level of debt, coupled with the fact that the administration is keen on taking on more, he drew reference to Ghana.

According to the former finance Minister, the fact that none of the large scale projects have been factored into the equation should be of concern.

Jordan referenced a recent confirmation on the part of Vice President Bharrat Jagdeo, and first reported in another section of the media, that Government was looking to access some US$1.5B in loans from China.

The former Finance Minister noted that at half year, the debt stood at US$2.9B and along with the proposed loan from China, there is also another amount to the tune of some US$1.9B from the Islamic Development bank to be secured.

He drew reference, too, to the fact that only recently, Head of State President Irfaan Ali announced an intention to approach the United Arab Emirate (UAE) to tap into their ‘sovereign wealth fund’ for investments in Guyana.

Additionally, the President had announced an intention to approach the Kuwaitis with an interest in accessing their investment fund.

The former Finance Minister noted, too, that among the external debts being contracted by the administration are several loans that are not being factored into the equation. These include the Gas-to-shore initiative, the Amaila Falls Hydro Electric Project (AFHEP), and the New Demerara River Bridge.

These additional debts, to be contracted according to Jordan, do not even include the regular borrowing from institutions like the World Bank, the Caribbean Development Bank, and the Inter-American Development Bank (IDB), among others.

Jordan used the occasion to recall that the President of the IDB is scheduled to arrive in Guyana shortly.

President Ali told reporters that the duo had met previously to discuss the finalizing of programmes for which Guyana presently has applications.

According to President Ali, he was assured by the IDB head that the priorities of the Guyana Government in fact align with that of the bank.
He, in fact, reported that the IDB is keen on remaining one of Guyana’s primary development partners and reemphasized its commitment to Guyana.

President Ali reported also that the President of the bank himself would be visiting Guyana imminently with a view to getting a fuller understanding of the types of projects identified as critical in Guyana and areas where the bank can provide financing.

The IDB currently has the largest share of Guyana’s external debt according to the government’s mid-year report on the country’s finances.

According to the information contained in the Mid-Year Report for 2021, monies received from the IDB in loans increased 10 fold, from US$5.2 million in the first half of 2020, to about US$55.5 million for the corresponding period in 2021.

The report stated, about 75.2 percent of the latter amount was allocated to combating the economic and social ramifications of the pandemic.
Additionally, this publication last month reported that Guyana had approached the IDB for a loan totalling US$1,817,764 to support the development, and implementation of a Medium-Term Development Strategy, which will leverage on the country’s emerging oil and gas revenues.

Replies sorted oldest to newest

Despite massive spending APNU+AFC’s performance has been dismal

https://s1.stabroeknews.com/images/2020/02/letter-pic.jpg

Dear Editor,

The governing coalition has now published its Manifesto for the 2020 elections. In structure and content it stands in stark contrast with its own 2015 Manifesto. Broadly, while the 2015 Manifesto promised the Good Life for All, the 2020 Manifesto promises “to lay the foundation of the good life.” With the amount of money the APNU+AFC Government has spent and the manner in which it largely shut out the Opposition in its five-year term, it has underperformed. Its signal achievement of holding local government elections has been marred by autocratic leadership, violations of the Constitution, incompetence, waste of public funds, and more than a fair share of corruption.

The numbers show that it is easily the largest government this country has ever had, with the most resources in terms of money and people at its disposal.  Yet, the returns are woefully modest. The APNU+AFC Government has spent about $1,100 billion Guyana dollars or the equivalent of $15 million for every man, woman and child in Guyana. To the obvious question, are we that better off, even its most diehard supporter would struggle to give a positive answer. 

As evidence, here are some numbers using the last completed year of the PPP/C Government (2014) and the parameters as reflected in the APNU+AFC 2019 Budget. There is no 2020 Budget until after the elections.

https://s1.stabroeknews.com/images/2020/02/letter-pic.jpg

While the number of ministries has remained the same, there are now thirty ministers if we include de facto ministers like Joseph Harmon and Carl Greenidge who have ceased to hold formal positions as ministers but have retained the powers and compensation of ministers. While the economy grew by 16% tax revenues have risen by 65%. Yet, the fiscal deficit has grown by 161% from $20 billion to $52.2% billion and the gross international reserve has declined by US$188 million or 28%.

That such a poor return could emerge from a massive increase in tax and other governmental revenue can only be the result of poor and reckless spending. Current expenditure has more than doubled since 2014 while capital expenditure has risen from $39.4 billion to $69.3 billion, an increase of 76%, with far from enough to show for it. As the National Estimates reveal, the Finance Minister increased tax collections far out of line with the growth of the economy and in the context of a substantially reduced debt service obligation.

A significant contributor to the increase in current expenditure is the 66% increase Employment Costs as the Government provided jobs for the Coalition’s supporters while cleansing house Volda Lawrence’s method.  

The APNU+AFC has not explained why its 2020 Manifesto has largely rejected the more constructive and measurable policy commitments in its 2015 Manifesto. Yet, the contrast between the 2020 and 2015 Manifestos is so striking that it is hardly likely to escape attention. For me, a 2015 supporter of the APNU+AFC Government, here are some of the things that stand out for their omission. 

No more hundred days plan;

No more Cummingsburg Accord disclosure;

No more promise of collective-bargaining in the public service;

No more mention of embrace of labour;

No more public security plan;

No more promise of technical and vocational education is used in every region including regions 1, 7, 8, 9 and 10;

No more Region 10 Policy Development Plan;

No more establishment of a specialised NIS Task Force;

No more transportation policy. The reintroduction of a public transportation service hardly qualifies;

No more hinterland policy;

No more rebalancing the powers of the President and Prime Minister;

No more appointment of a National Assembly Budget Office;

No more breaking deadlock in the appointment of Chancellor and Chief Justice;

No more expert Stakeholder Committee to oversee

Implementation of outstanding recommendations of Constitutional Reform Commission

No more commitment to cut waste and extravagance, limit borrowing, lean and clean government, strict accountability and zero tolerance for corruption

It is hard to imagine that the National Assembly gets no mention (only a photograph); that there is no broad legislative agenda, or that there is no population and immigration policy. The role and success of any government are determined by four factors: visionary leadership, policies, people and co-operation. Of all our post-Independence leaders, Granger ranks on the bottom tier in terms of vision with Burnham, Hoyte, Cheddi Jagan and Jagdeo at the top. The policies set out in the Manifesto are the things a Finance Minister usually puts in his Budget Speech, not in a five-year Policy Commitment. On people, the APNU+AFC has shown a preference for perceived loyalty over competence.

Nation-building requires not only the co-operation but the participation of the political opposition. There is no indication, let alone commitment to either of these. The political opposition is not a combat enemy and its supporters certainly not non-people.

This Manifesto fails to impress.

Yours faithfully,

Christopher Ram

FM

For the past 70+ years there have been racial strife. That divide is getting wider. There is nothing in the manifestos of the PPP, PNC, AFC and other parties to address this ticking time bomb.

Mitwah

Add Reply

×
×
×
×
×
Link copied to your clipboard.
×
×