APNU/AFC’s wasteful spending ballooned domestic debt – Ali

…says working to halt downslide in order to return economy to vibrancy

Presidential Candidate of the People’s Progressive/Party (PPP/C), Irfaan Ali, has criticised the incumbent A Partnership for National Unity/Alliance For Change (APNU/AFC) over its “wasteful spending” over the past five years.

During a virtual presentation on Thursday, Ali posited that this spending by the Coalition administration has resulted in the ballooning of Guyana’s domestic debt.
“Over the last five years, the Government has basically overspent $100 billion dollars. That has obviously ballooned up our domestic debt, and it has led to large fiscal deficits,” he asserted.
This comes on the heels of recently published balance statements of the nation’s accounts showing that not only have Guyana’s general reserves been depleted to $0, but the account is also now running an overdraft to the tune of hundreds of billions of dollars.
Ali, whose party has emerged in the lead at the March 2 elections following a National Recount of the votes cast, and is now awaiting a formal declaration by the Guyana Elections Commission (GECOM) on June 16, painted a gloomy picture of the current state of the economy.
He noted that almost every sector is suffering a major decline and is on the verge of financial collapse – a situation which he said was caused by political instability not just over the past three months of electoral impasse, but since the December 2018 passage of the No-Confidence Motion against the Coalition Administration.
“What we are seeing in the economy is a contraction in growth… Your country has been going through what I term a political crisis, and of course that has a significant impact on economic activity and also the business climate in our country,” Ali posited.
According to the PPP/C Presidential Candidate, most of the key job-creating sectors, such as mining, forestry, agriculture, tourism, construction, manufacturing and services, have declined.
In fact, he pointed out that political instability coupled with an economic crunch and the effects of the COVID-19 pandemic have seen unemployment spiking to some 25 per cent.
These, he surmised, are among immediate challenges his party will face during its impending transition into Government.
“We will have to put back people to work, and implement the right measures to support the reopening of businesses and recreating energy in the economy to create jobs,” he stated.
Ali went on to highlight that there is also significant decline in the country’s revenues. Based on the trend, he estimates that revenue will contract by a projected five percent.
“So, if the projection holds true and you have reduction in revenue of over five per cent, then that is a reduction of almost US$10 billion from the revenue side. And this is coming at a time when we need to find resources to help not only business, but to help workers, to help families…,” he contended.
Ali also noted that bankruptcy in the household sector is at an all-time high. He explained that as at December 2019, nonperforming loans stood at over $10 billion, and with the current political situation and COVID-19, this situation is expected to worsen.
Meanwhile, the PPP/C Presidential Candidate further outlined that the oil sector has contracted by as much as eight per cent. He explained that Guyana’s first oil shipment had brought in revenue to the tune of US$55 million, but the revenue earned from the last shipment is more than US$20 million less as a result of low oil prices on the global market.
“So, while we benefit from cheaper import of oil and oil products, we are now an oil- producing country, and what we’ve seen is a decline in our revenue from oil sale…,” Ali asserted.
Turning his attention to the sugar industry, which is facing a total shutdown due to financial crisis, Ali reminded that the coalition had promised that while some of the estates would be closed, the others would have been offered the necessary support to stay operational.
“The sugar sector is not on the verge of collapsing anymore, but is now in total financial chaos. The Government has announced that there is no money for the industry,” Ali related.
In this regard, he promised that efforts to rescue the sugar sector would be made as soon as the PPP/C transitions into Government.
The Guyana Sugar Corporation (GuySuCo) had written caretaker President David Granger on May 15, detailing the company’s dire financial situation and appealing for a bailout, but the Government had responded by saying the treasury is in no position to bail the corporation out at the moment.
To this end, Ali underscored the urgent need to put systems in place to fix these issues. He promised that his administration “will ensure the productive sector gets back going, to have the right mix of incentives and measures…to bring back energy to the economy, to reignite construction and to rebuild confidence in Guyana.
“We are working now to look at the priorities. How we can cut back expenditures, how we can ensure that the productive sector gets back moving…to ensure the downslide is halted so that we can return our economy to vibrancy…I want to assure you that we are ready to work with every Guyanese, all stakeholders, in moving our country forward together for the betterment of all Guyanese,” Ali assured.
On this note, he is hoping that GECOM would do the “right thing”, so that there is a “smooth transition” of Government, so as to allow the economy to become re-energised for the benefit of the country and its people.