Dear Editor,
Please allow me to share my thoughts on the actions of the Government of Guyana to convert the ExxonMobil signing bonus into US and Canadian Treasury Bonds. The Guyanese populace will draw their own conclusions based on the denial of the existence of the ‘bonus’ and its eventual disclosure.
My issue is, however, with this new policy direction of investing in the US and Canadian economies, US$18M is not an enormous sum by our economic standards; there can be no need to stash this paltry sum for ‘safe-keeping.’ This sum is less than two per cent of our annual budget, so surely we could put this money towards our own development . I can assure all Guyanese that we will be able to afford lawyers for the Guyana-Venezuela ICJ case without this ‘bonus’ to assist us. US$3M of this amount has been earmarked for ‘capacity building’; how is this being achieved with the funds otherwise invested? Are we going to use the interest generated for the capacity building programme? Guyana recently borrowed US$900M for unspecified projects; will some of this also be ‘invested’ surreptitiously in US and Canadian Bonds? Government needs to revisit this policy direction as a matter of great urgency.
Editor, many see low yield bonds as a very secure investment; however, these bonds are by no means infallible and governments do default from time to time. US Treasury Bonds must be deemed a risky investment by any yardstick, as that country continues to borrow heavily to maintain a quality of life beyond its means, continuously raising its debt ceiling and other risk factors. A fitting analogy would be of a poor man lending to his ostentatiously rich neighbour: sure he has all the trappings of wealth, mansion, cars, and flashy lifestyle that seem unreachable to the poor man, but underneath all the flash, he is mortgaged to the hilt, in debt beyond his ability to repay and playing a Ponzi scheme to keep himself afloat. Many a man has fallen for these schemes; should Guyana be investing in such a country? What place in line would we be if they default? Let us invest in ourselves and build our own nation before we prop up an ailing economic power.
A timely reminder to the Government of Guyana that ‘Charity begins at home’ may be in order.
Yours faithfully,
Robin Singh