In fiscal Year 2011, the overall fiscal deficit widened to 4.4 percent of GDP from 3.6 percent of GDP in 2010.

Meaning:

Guyana borrowed much more than expected in 2011, thwarting the efforts of the PPP to reduce the deficit and shunt the economy away from stagnation.  Jagdeo cabal deliberately move the economy to a free fall and stagnation in 2011.

Spend more than they earn:

Payment for Marriot made in 2011

Payment made to chinese fuh de airport in 2011

Payment to fix Skeldon suga factory

Big payment to Fip fuh the road to nowhere and highway to hell.

All gravy train projects to give BIG RAT a happy send off.

NO mind that it tilt the economy upside down.

The external current account deficit is expected to widen to about 14 percent of GDP, in 2012 thanks to a "dufus duck" who has zero clue on economics much less arithmetic.

the way the ppp crime family is stealing it will get worse

Imagine wah would a happen if dem nah bin gat remitance and cocaine.

Oi Pandit Nehru, where are u

For 20 years it has gotten better, so why would it get worse, cuz you say so?  This Govt will lead Guyana for another 20 yrs.

This Jagdeo/Ramotar Government bruking up the country.

Just like how they bruk up Guysuco.

Where is the Swami Yugi22?  

He lost.

I sent him to listen to some wisdom from Pandit Rajin Balgobind.

Listen live now;

http://www.livestream.com/hariomtatsat/

20 more years of this corrupt regime in their present mode of government is a recipe for civil war. If they continue to act as though they own the place that is exactly what they would get. That much is certain as all situations as ours end up that way when greedy thieving degenerates as these are at the helm and see no need to reform their ways.

Yea, now run along and get drunk.

Trevor Sudeen, fish vendor: ‘I was expecting to see improvement after election but the situation only seems to be getting worse. I think there should be co-operation in parliament. Whenever they have a sitting, they are just trying to make our life harder. Right now I’m trying to come out this country.

young Guyanese ah run from the PPP oppression and tyranny.

 I can understand why that is apparently your frame of reference. You can only see that from personal experience.

Sorry. I like a sip of Portuguese port with an aged Gouda and crackers now and then but my household never had alcohol as their only means of family interaction and entertainment. 

We have to verify that the US$860 mill includes the cost (I think about US$120 mill) of building the transmission network. I doubt that the demand is there - just about 120MW of stable demand - to reduce significantly the unit cost of electricity. Many big Guyanese companies are investing in self-generation and they are going off the grid. You will have a similar situation like the Berbice bridge at best or a Skeldon at worse. Or in more dire terms - a combination of both. That's my prediction. 

The tragedy of this massive commitment, the negative fallout which future generations of Guyanese will have to deal with long after the now well-heeled Jagdeoite crew have gone to their just reward, is that it was never thought through properly. Conceptualized in its present amoebic form, with multiple shady players in the mix, the thrust to do the deal has always been political and connected to graft.

The fiduciary responsibilities of the GOG are upside down . . . Fip Motilall is slated to collect a large check (US$20million, i last heard for his "rights") from Sithe Global if this deal is done.

How soon we forget

You are a naye-sayer.  National demand may not be there "today", but this project will propel growth for decades.  Self generation is attractive due to costs however, if delivered at affordable rates, this attraction will go away.  This is a natural process.  Skeldon is not a good reference as this is linked to a specific industry with viability issues of it's own.

Agree that the next generation is in for a rough ride. 

1. US$860 mill Amaila financed by external debt in foreign currency.

2. US$ 160 mill airport terminal project financed by external debt in foreign currency.

3. US$ 15 mill govt investment in Marriott financed by external debt in foreign currency.

4. They will need to borrow at least US$10 mill to fix Skeldon because the Chinese contractor was a fraud.

5. Petrocaribe debt is now about US$ 400 mill (conservatively estimated).

My oh my!! Meh gat foh tek meh daddy money and invest in TT and Barbados and Orlando.

DEm gat Prof in Merika who gun mek Merika a Third World Country. Millions are being spent but no mention of Revenue that will be generated, Jobs that will be created, Industries that will be created, Increase Taxes. Or dem Merikan Prof does teach Acct with Credit Leger only cause dem nah kno bout Debit.

Aluh hear this bird brain a talk.

i RATHER BE A BIRD BRAIN THAN A SHIT HEAD LIKE YOU. oH WHAT A GREAT sUNDAY mORNING. WATAK!!!!

Yuh know since a Sunda and meh juss do meh prayer meh was nice to yuh. But meh goh downgrade yuh to wan hyena shit brain. Hahaheheheh

Amelia falls and the Airport are major national investment which will benefit many generations.  It's foolish to contend it will be a burden on future generations.  The next generation will be major benefactors of these investments and the economy will grow to deliver the return.  These are investments, not consumer or social spending.

The massive infrastructure we enjoy here in the USA, was it put in by our generation?  The fact that the previous generation did it, does that mean we don't have an obligation to pay for it now?  It's is our job to use it to build further.

I could understand, to some degree, caution about Marriot and Skeldon, but they are rather small.  On Petrocaribe, what gave rise to that debt, and what's the connection with Amelia falls?

Lame AND weak. WATAK!!! ROUND 2.

Oh the joyful noise of a simpleton. If only it were that simple. 

I am making a general point regarding the stock of external debt if these projects are implemented. The debt stock makes everything connected. Money is fungile and bad borrowing will restrict your ability to borrow for the things that are really needed. The benefits of Amaila are not guaranteed since they depend on the calculate social NPV. The project cannot be beneficial if it does not reduce the cost of electricity. The big companies have already voted and established their generating capacity. DDL is saving missions annually with its bio-methanisation plant. A very large mall is coming to Guyana (not the one recently reported) and they will not go on the grid. The point is hydroelectricity is definitely what Guyana needs. However, you need to sequence it properly as you need to sequence your debt. Perhaps the first phase should be a medium scale one. On the issue of the airport, I don't think the terminal needs to be knocked down right now. In fairness to the Jagdeo govt they have improved the terminal that can last another 10 years. You have to factor in what else could have been accomplished with this extra external debt of US$160 mill. Surely they need to expand the runway for bigger jets. Some estimates put that at only about US$15 mill. What are the next best projects that could have been implemented by borrowing the other $US145 mill? I can think about many other critical things that can boost tourism. You have to borrow but do so efficiently. 

You are zig-zagging all over.  You have to examine what's being borrowed and for what projects.  I assume some type of sinking fund for debt taken to realize these projects will be established and funded either directly, as it the case of Amelia, or indirectly, as in the case of the Airport.  You are throwing in lots of "salami" like "social NPV", etc to confuse the issue.  BTW, 500 mio for a hydro in today's dollars is not a big project, this is not even medium, but actually small.  The project proposed by the PNC in the 70's was 1.1 bil at that time when the national GDP was 250 mio.

You throw a lot of "perhaps" up there.  How do you know some of these were not evaluated as alternatives or scenarios and the Govt went with what makes sense considering all points?  I do not know what they evaluated, but that Hydro does not seem over ambitious but rather moderate.

You mean to tell me you have been a CFO and you don't think the NPV is important? Wow! Since when the PNC is the yardstick. If they were good at finance they would never have defaulted on the external debt. US$860 mill (not US$(500 mill) is about 40% Guyana's GDP. It is not small change in Guyana's time. 

Micro and maco economic considerations carry very different investment considerations.  In a case where you have a one to one relationship, it's easy to look at specific and contained scenarios.  In a case of one to many relationships and with long term dynamics coming into play, you need to consider strategic implications.  How you you do a payback for a major highway?  This is like that.  Marriot and Skeldon are classical NPV candidates.

I don't say the PNC was good, but the PNC justified it back then on a smelter project which paid the investment.  This is what I call risky as we saw what happened with the global aluminium market.  This was a classical case of a one-to-one relation for a large part with the rest being gravy.  The market risk needed to be considered.  Maybe the funders saw it that way and declined funding.

In the case of Ameila, it's different as there are no specific industrial drivers, just a national need to replace expensive imports with a cheaper domestic source and to take the nation well beyond it's current economic output.

You cannot look at the project cost @ % to GDP as a barometer.  In the USA and Europe, energy costs accounts for 5% of GDP but I assume it will be higher for a developing nation.  I don't know what the right number is, but I assume 10-15% would be acceptable, declining over the years.

Sometimes I ask myself where some of my fellow Guyanese have obtained their knowledge or degree in economics and business finance. It looks like it was in Lal's rumshop.

This is not Monopoly money we talking about. It is real debt. No matter if every Guyanese used a laptop, TV, radio, has a fridge, and run their lights 24 hours a day: it still won't bring in enough income to make the hydro plant profitable ever. Businesses will have to be making huge use of the capacity in order to get the thing into profit.

Of course something needs to be done. But can we trust the PPP to deliver? Unfortunately the answer is a resounding NO. Whole scale failure of every complex project undertaken by the PPP is a sure sign that the hydro plant is facing a catastrophic failure at some point. Maybe it will be e leak in the dam, causing extensive flooding. Maybe it will be an electrical fault that will electrocute every living thing for miles. the inept PPP contractors will ensure that such a failure will occur. And then what?

Lal's rumshop was not a simple business, have you ever tried running one?  Are you predicting failure or are you hoping for it.  I think you are in for a bitter disappointment.  MrT, you are full of shyte.

BTW, the Chinese are putting lot of people there to run the project.  They are renting lots of houses.

Baseman: "Micro and maco economic considerations carry very different investment considerations.  In a case where you have a one to one relationship, it's easy to look at specific and contained scenarios.  In a case of one to many relationships and with long term dynamics coming into play, you need to consider strategic implications.  How you you do a payback for a major highway?  This is like that.  Marriot and Skeldon are classical NPV candidates." 

------

NPV is what you use for micro projects like Skeldon. Social NPV is where you will bring in the factor like environmental costs and the benefits of reduced oil imports due to Amaila. We are not talking about valuing a public good like a highway system. A public good is fundamentally different than a hydro or Marriott. Let's not mix up the issues. And yes the mathematics is well established when it comes to valuing public goods.  Don't mix them up. Your thoughts vis-a-vis micro and macro is completely wrong. Micro is macro and macro is micro. There is significant feedback loops. Skeldon is a micro project but it affects the macro economy. 

Baseman: "I don't say the PNC was good, but the PNC justified it back then on a smelter project which paid the investment.  This is what I call risky as we saw what happened with the global aluminium market.  This was a classical case of a one-to-one relation for a large part with the rest being gravy.  The market risk needed to be considered.  Maybe the funders saw it that way and declined funding."

===

Let's cut the blame the PNC for a bit. The PNC's idea, I believe, was based on an original idea coming from integrationists like Clive Thomas, Allister McIntyre, etc. I believe the PNC was just sloganeering here. Guyana does not have the power capacity for aluminium smelter. Alumina maybe. The plan was for Guyana and Jamaica to send bauxite to TT for smelter. Jagdeo correctly brought back this initiative but for agriculture - hence the Jagdeo initiative. I think it is a very good idea. 

Baseman: "

In the case of Ameila, it's different as there are no specific industrial drivers, just a national need to replace expensive imports with a cheaper domestic source and to take the nation well beyond it's current economic output.

You cannot look at the project cost @ % to GDP as a barometer.  In the USA and Europe, energy costs accounts for 5% of GDP but I assume it will be higher for a developing nation.  I don't know what the right number is, but I assume 10-15% would be acceptable, declining over the years."

=====

Nobody uses project cost to GDP to measure the viability of a project. I did not say that. That's your invention. However, organizations like Moody's, S&P and IMF will take this ratio seriously (along with others) when they judge the sustainability of your debt. Here the macro will certainly mess up micro like Greece. 

All of Guyana's foreign currency money that they earn from exporting to the ABC countries is being sent to China for cheap nonsense that make us Guyanese dependent on more cheap Chinese nonsense.

So, what is wrong with Amelia falls?  I don't disagree with the fundamentals, as you can try to identify all the micro which sums to the macro and achieve theoretical perfection.  However, you are overwhelmed by multi-layered dependency assumptions which would confuse even the most seasoned decision-maker.  For that reason, you never try for 100% surity or you end up with paralysis by analysis.

I don't have all the data points but just looking at it from afar, 500 mio, 75 years, upgraded national grid, amply power supply, replacement of expensive imports, adding enormous scalability to the economy, I just don't see it as a bad investment "if administered properly".

We in the opposition are asking questions. All the government needs to do is answer them so we can move on with this most crucial project. I will be running a few columns in SN on the external debt and its relation to these projects. On Amaila the government can shut up the opposition and the IMF by showing us the social NPV calculations. In fairness to the AFC it did suggest an alternative. A proper government with a well run Min of Finance would have looked into the social NPV or several alternatives and let us all see the viability. It is the least they can do since all Guyanese in spite of political views pay the VAT, income tax, etc. Since we are all affected negatively or positively we should all get a say in this most critical project.