Dear Editor,
Jordan in addressing the 43rd Annual General Meeting of the Islamic Develop-ment Bank Group in Tunisia, this week, made an announcement in passing—in brief, almost as a footnote.
One would have expected that contracting the single largest ever loan portfolio taken on in Guyana’s history would have attracted widespread media attention and fanfare by the Granger administration.
This was not done, since President Granger, Finance Minister Jordan and the APNU+AFC acolytes are fully aware of a plan by this administration to embark on a spending spree in the coming two years—years in which there will be two elections held, namely, local government elections in 2019 and regional and general elections in 2020.
Guyana’s total loan portfolio is already close to US$1.7B. Minister Jordan in briefly touching on this “watershed” transaction told the Bank’s executives at the end of his long-winded presentation misrepresenting Guyana’s economic status quo, that financial and technical assistance, of about US$900M (US$0.9B) had been approved for Guyana. This money, he said, will be used for “economic infrastructure, rural development and trade and competitiveness.”
The Finance Minister in confirming receipt of this—the single largest debt portfolio ever contracted by this country—made no mention of a single transformative project warranting this size of a level of loan.
The road to Brazil perhaps, a deep-water harbour, the new Demerara river crossing, a brand new international airport in Lethem, a railway or road system from Linden to Lethem, hydro-power, ―all plans put forth by the PPP administration to be done between 2015 to 2020―but there was nothing; the Minister of Finance was silent on this front.
To give perspective to the size of the loan, consider that the state-of-the-art Skeldon Sugar Factory was just about US$100+M. The new Cheddi Jagan International Airport currently in the final stages of construction is US$150M in which they cut the Jetways from 8 to just a mere 2, which should have reduced the cost. The Berbice River Bridge constructed less a decade ago was completed at US$40M. The Amaila Falls Hydro Electric Project—a project that would have revolutionized this country―was projected to cost US$800M.
The David Granger government railed against this project saying taking on such a high loan and raising the legislative debt ceiling guarantees for government was excessive and would have been a burden on this nation for ages to come, only to realize now with the cost of fuel and GPL projected upgrades exceeding $400M, the stupidity of halting the Amaila project will put the nation years behind.
It is clear. The David Granger and the Guyana government have now begun to borrow enormous sums of money based on a promise of oil revenues. Every advisor, including the Leader of the Opposition Bharrat Jagdeo, has consistently warned this administration against contracting unsustainable loans based on the promise of an extremely volatile export—crude.
There is no other reason the Islamic Development Bank would front Guyana US$900M—a country administration with a proven track record of the inability to spend far less in a given year—now, to spend on a work programme to be completed between this year and 2020, seems far-fetched.
The Minister said it in his single reference of Guyana’s oil industry to the bank’s executives, when he identified, “building a robust oil and gas industry” among the country’s key strategic objectives for sustained economic growth.
The Islamic Development Bank must have known that the country’s export earnings have been on the decline and the country’s debt portfolio is at already alarming levels. Our foreign reserves are at an all-time low. The Islamic Development Bank, though developmental in nature, is not handing to Guyana zakaat or charity and this money will have to be repaid with the interest rate and other conditions unknown at this point.
David Granger and the APNU+AFC administration have now mortgaged the future of generations to come with the albatross of debt again around the necks of even the unborn Guyanese boy or girl.
Yours faithfully,
Peter Ramsaroop
