September 24 2018
…says gross national product would provide better assessment
Statements by Finance Minister Winston Jordan alluding to projected growth of 29.1 per cent in the Guyana’s Gross Domestic Product(GDP)are being contested by Opposition Leader Bharrat Jagdeo.At his press conference earlier last week, Jagdeo was very lukewarm about the figures Jordan cited based on the International Monetary Fund.
He noted that even if Guyana has growth on such a scale, it will only result in a limited increase of onshore jobs for Guyanese.“Jordan says, in Saudi Arabia, that GDP will grow. He said 29.1 per cent in 2020. But this might not be a lie, 29.1 per cent. But this is exactly what I’ve been pointing out, that linkages will not be great.”
“Just imagine GDP from the non-oil sector growing by 29 per cent. You’ll create 50,000 new jobs. The GDP will grow by 29 per cent in that year and will create 300 new jobs. That’s what Exxon Mobil said… and maybe a few onshore, not exceeding a thousand. So it’s enclavic.”According to Jagdeo, referencing the Gross National Product (GNP) would be a better way of assessing performances relative to capital intensive sectors.
The GNP is most often used to cover production of Guyanese whether in or outside of the borders.“They should look at GNP figures. In this case where you have large capital inflows in the capital-intensive sectors, a better assessment would be to use the GNP rather than the GDP figures. So this might be true, this is a feel good, it won’t translate into more money into anyone’s pockets or more jobs.
It’s just feel good.”Minister Jordan was at the time in Jeddah, Saudi Arabia, accompanied by Public Infrastructure Minister David Patterson, to sign a loan agreement. The agreement, with the Islamic Development Bank, is to the tune of US$20 million.Government has said the money will go towards the Guyana Power and Light’s (GPL) Utility Upgrade programme. But while Government continues to borrow, various indices are indicating hikes in Guyana’s indebtedness.
Debt reporting
The Finance Ministry’s Public Debt Annual Report for 2016 had showed that since 2015, there has been a 4.1 per cent rise in Guyana’s indebtedness to International lenders.
A breakdown of the figures showed that total external debt amounted to $240 billion, a 72.6 per cent bite out of the total public debt. On the other hand, domestic debt stood at $90.6 billion, or 27.4 per cent of the total.
The report notes that Guyana’s four main external creditors are the Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB), the State-owned Export-Import Bank of China (China EXIM Bank) and lastly, the Venezuela State-owned oil company (PDVSA).
Last year’s End of Year Outcome report had also revealed that for that year, the stock of public debt and the public debt to Gross Domestic Product (GDP) ratio had increased. According to the report, total public debt was recorded at US$1.6 billion, exceeding the projected amount by US$8.4 million. The public debt to GDP ratio actually increased by 0.9 per cent to be recorded at 46.1 per cent.
According to the report, higher disbursements of money from the Export-Import Bank of China (China Exim Bank); the Inter-American Development Bank (IDB) and the Caricom Development Fund (CDF), as well as delayed debt service payments, were to be blamed.
When it comes to servicing these debts, the report stated that total public debt service amounted to US$71.7 million for 2017. This was, in fact, lower by 2.5 per cent than the projected 2017 sum of US$73.5 million.
