Hundreds!!!

WE never balanced a budget on income in our entire history and all this yapping on how well we are doing is like the guy living the highlife on a credit card. The loans come due some time. Imagine how much more we will owe with the humongous Airport we do not need...and then there is the 2 billion we need to build a Hydro Plant and hand it over to others fow 20 years while we foot the bill....not sound economics....

Granger should already have a team in place taking charge of the electric Grid. It cannot continue under the purview of  Brassington who use it as a laundering enterprise and cared little it has 40 percent line loss built into cost.  We need to modularize the grid and to begin with, make it smart and redundant. That is sound engineering and will control theft, line loss and constant black outs.

This is not about the Sugar industry alone. It is about a disease in every infrastructural system design and management from flood control to sewage, garbage etc, our natural resources and our productive sectors working for us and not for the benefit of the corruptocrats.

Guyana has been living beyond its means – Anand Goolsarran

– $86B accumulated in debts
– Consolidated Fund overdraft could exceed $60B

By Kiana Wilburg
With respect to Treasury Bills, Guyana has accumulated over $80B in debt. And the Consolidated Fund could be

Former Auditor General, Anand Goolsarran

overdrawn by as much as $60B.
Former Auditor General (AG), Anand Goolsarran in pointing to these startling findings, said that it paints the clear picture that “Guyana has been living beyond its means.”

To cement his point, he examined the explanation given by Finance Minister, Winston Jordan for the Consolidated Fund being in heavy overdraft.

In an interview with Kaieteur News last month, Jordan was making moves to get an understanding of the economy. As he and a special team were still crunching the numbers from some “secret accounts” which functioned under the previous administration, Jordan expressed concerns about the state of the Consolidated Fund.

During a meeting with several officials within the Ministry on May 19, last, Jordan said he was told that the Consolidated Fund being in overdraft is due to the behaviour of the Guyana Gold Board and its failure to reimburse the account.

“The government doesn’t have the kind of money it needs to pay miners, so it draws from the Consolidated Fund and reimburses it when it sells the gold. But there is the practice of “hedging” (A strategy used in limiting the probability of loss from fluctuations in the prices of commodities) after they collect the gold, and there are risks involved in that.

“And if you aren’t good at it you can lose, in the sense that you are forced to sell for a price far lower than what you bought at. I think it is public knowledge that the board got caught in the fall of the gold prices.
“So they might have bought at high prices and may have been hedging, but then the prices collapsed…”

Jordan had said that while he believes that the Gold Board has been drawing heavily from the Consolidated Fund hence the state it is in, he will provide a more concrete position when he is informed of the state of affairs of the Gold Board. He had said, too, that he has asked the Accountant General to provide him with some figures in that regard.

“What I do know, is that I have been told that the overdraft is due to the fact that gold has not been able to reimburse the Fund as yet, which means that they are probably hedging, and that’s my only explanation without seeing the accounts as yet. But as an economist I can only presume that this is perhaps the case.”

However, the Former AG, Anand Goolsarran believes that the Minister was sorely misinformed.

Goolsarran explained that there are two bank accounts making up the Consolidated Fund. These are account nos. 400 and 407. He said that the former, ceased to be operational following the introduction of the Integrated Financial Management System in 2004. It was overdrawn by $46.776 billion as at December 31, 2012. This is according to the latest available audited public accounts. It was also not reconciled since 1988.
He said that the new Consolidated Fund bank account no. 407 was also found to be overdrawn by $15.389 billion as at 31 December 2012. This gives a total overdraft of $62.165 billion.

The former AG added that there were a number of other accounts relating to Ministries and Departments which reflected balances totaling $16.559 billion.

“According to the former Auditor General, of the several other special bank accounts held at the Bank of Guyana, eleven accounts reflected balances totaling $4.140 billion. These appeared to be funds that were transferrable to the Consolidated Fund,” Goolsarran asserted.

He stated, “Taking these into account, and excluding the amount of some $4 billion, the accumulated balance on the Consolidated Fund reflected a deficiency of $45.947 billion as at 31 December 2012. If the transactions for 2013 and 2014 are taken into account, including the unauthorized withdrawals from the Consolidated Fund, the deficiency in the Consolidated Fund could very well exceed $60 billion.”

Goolsarran said that the overdraft situation can be traced back to 1992 and earlier periods. But after an examination of the receipts and payments of the Consolidated Fund from 1992 to 2012, the former AG said that it does not indicate any transactions relating to the Guyana Gold Board. He said that it is incorrect to attribute the overdraft to indebtedness by the Board.
He said that the evidence suggests that expenditure from the Fund over the years exceeded revenue paid into it. Goolsarran said that for the period 1992 to 2012, the total revenue paid into the Consolidated Fund amounted to $1.643 trillion while expenditure totaled $1.727 trillion, giving a deficiency of $84 billion.

The Chartered Accountant said, that it is evident that “we have been living beyond our means for decades only to be rescued by borrowings from the issuing of Treasury Bills which attract additional costs by way of interest charges.”

As at December 31, 2012, he pointed out that Guyana’s indebtedness to banks, institutional investors and individuals in respect of Treasury Bills transactions was $86.552 billion.

When Treasury Bills otherwise known as ‘T-Bills’ are bought, it simply means that money has been lent to the government. The special bills have a face value, but are sold for less than they are worth. They also have a specified date upon which the face value is repaid.

If Guyana has a T-Bill worth $60, it is sold for $50. But by a certain date, $60 is what is repaid.  The buyer essentially earns $10 for the investment.
Treasury bills are one of the safest forms of investment and are considered risk-free.

Guyana's airport is rubbish, a laugh to anyone that has travelled, it's the doorway to the country and it is one nasty low life doorway, so like it or not and upgrade it needed, getting off of a plane and having to walk on the airstrip is beyond low life, as for the hydro power, go tell it to the many Guyanese who still experience black outs that they don't need it, and see how that works out for you. 

The he problem is not the projects, it's the backward taxes and lack of brilliant economic minds that are incapable of at getting international investors invest in such projects. 

All all in all, it is due to the fact Guyana can't seem to find a government with vision, they need to free up the financial and investment sectors and get a grip on the Guyanese dollar, why does such a small economy need to let its money float one would ask? 

No need lol, I work with currencies, everyday, I know that guyanese economy cannot afford to have a floating currency, it's not strong enough, my point would be, that Guyana should not let its currency float until such time as the economy is strong enough to support it :-) 

Well, there are differing views.  An artificially pegged currency hides other deficiencies which lead to catastrophic results down the road.

I agree, but such "catastrophic results" can only occur through utter economic incompetenc... And not having the correct policies to follow through. 

And indicators like currency movements in a free floating environment are a surrogate for soundness and confidence in policies.  So, which is the chicken and which is the egg?

Thats where it gets tricky, I suppose confidence in policies can only come through confidence in the political environment, the capacity to vote laws for the greater good and not for some few persons good. 

Well, what are the true KPIs?

I told Glen Lall about 2 months ago he needs his reporters to take a Finance 100 course and two economics classes.

Guyana's airport is rubbish, a laugh to anyone that has travelled, it's the doorway to the country and it is one nasty low life doorway, so like it or not and upgrade it needed, getting off of a plane and having to walk on the airstrip is beyond low life, as for the hydro power, go tell it to the many Guyanese who still experience black outs that they don't need it, and see how that works out for you. 

Are you an economist?  Have you ever heard about the term "resources are limited."
The highlighted section above make me question what kind of advice you can give.

I'm in doubt that the "highlighted section" in anyway leads to an economic advice, but please go ahead humour me, and tell me, what is the difference between an economic advice and a critic? 

Well, are you a critic for the sake of being a critic, or do you have a grounded alternative to what you are criticizing?

 All all in all, it is due to the fact Guyana can't seem to find a government with vision,

* I am reminded of Solomon's piece of wisdom:

* Burnham, Hoyte, Cheddi, Janet, Jagdeo, Ramotar, and now Granger--every single one of them downright MEDIOCRE----they lacked the vision, the mindset and the competence to take Guyana to a higher plateau economically.

Rev

Are you an economist?  Have you ever heard about the term "resources are limited."
The highlighted section above make me question what kind of advice you can give.

TK, it is really difficult to report on intricate issues.  What are the errors in this article?

Are you in electrical engineering or mechanical?

In order to get a ball rolling, there is a need for an external force. The GoG needs make the investments that will encourage growth by the citizens.

Create a thread and lets talk engineering...electrical...what are the state of the art grid management strategies out there?

What can we do with Guyana should begin with the home. PEPCO ( my electric company) has a program here where they come into the home and do an assessment of usages, donate smart surge strips that prevent vampirism from electrical equipment ( those on stand by but actually still consuming significant amount of electricity)  and high efficiency bulbs as well as shower heads  and insulation on hot water tanks. These alone can reduce electricity consumption by 20% ( in my case) The company that did the assessment was a private company paid by PEPCO and is state mandated. This can be an inhouse program at GPL to reduce concumption

I have more ideas but need your input. Start a thread if you care to discuss them given your understanding on the job.

What's your field?  I have to be careful what I say in public because I am a "regulator."  For example, if my state pushes something and I personally do not like it I cannot speak against it in public.  Lots of ethics laws.  I'll see about starting a thread.  I just have the time at night to converse though.  We will see.

If you  cannot speak then let it be.  I will create a thread and hopefully you can participate.

Storm,

Did you see the attachment above?  I am not sure what you are looking for and from what angle?

In order to curb the stealing of power they need to have the smart meter in place as they are distributing power in new areas, and then change out the old style meter as they go along, there are a few places that uses solar power.