Just a couple of weeks ago, in this column, I called attention to the frightening and rapidly out-of-control debt orgy that APNU+AFC are engaged in. As APNU+AFC mark three years in office this week, one of the things which are certain is that APNU+AFC are an administration determined to outdo the People’s National Congress (PNC), which made Guyana one of the most indebted nations in the world in the 1980s.
Last Friday, APNU+AFC used their majority in Parliament to raise the debt ceiling, so that they do not need to seek approval for taking loans up to G$50 billion (US$250 million) per project. The motion was introduced without warning.
This is a dangerous move, one that could make the debt crisis that bankrupted Guyana in the 1980s look mild in comparison. APNU+AFC have now given themselves parliamentary imprimatur to take larger loans — up to G$50 billion per project — without informing any of us, and without seeking parliamentary approval. This will allow them to take a loan of G$30 billion from the Republic Bank for GuySuCo, and to begin drawing down on the US$900 million (G$180 billion) from the Islamic Bank up to G$50 billion at a time. In less than three years, they want to double the international loans that the PPP left after 23 years.
With these loans, Guyana’s international loans would increase to more than US$2.7 billion, almost 30% larger than the US$2.1 billion the PNC had left in 1992, and 145% more than Guyana’s international loans had been at the end of 2014.
There is a hypocrisy that is galling: When the PPP had sought to have parliamentary permission to increase the loan ceiling to G$30 billion, in order to allow GPL to provide a guarantee to purchase the electricity generated by AMAILA, the APNU+AFC had cried foul, and had used their one seat majority in 2013 to reject the request. At that time, Greenidge, Ramjattan, Trotman, Nagamootoo and others had insisted that the Government should never be given permission to take any loans as large as G$30 billion, unless they sought parliamentary permission. They killed the AMAILA Project by rejecting the PPP’s request to increase the debt ceiling for any single loan. Now they have lifted the ceiling to G$50 billion — a sum that was once considered unfathomable, and which, just a few years ago, this same APNU+AFC had deemed unacceptable.
Clearly, APNU+AFC have not learnt the lessons of the PNC in the 1980s — when the PNC took us into the quicksand of unbearable debt. The foreign debt was more than US$2.1 billion in 1992. At that time, the foreign debt was 951% of Guyana’s GDP, and the debt servicing annually was 153% of our total earnings.
Guyana’s economic and social development had suffered immeasurable damage. Our poverty rates were an unbelievable 66% to 88%, depending on whose statistics you want to use. The 66% was what the then PNC Government had wanted us to believe, the 88% was what people like Dr Clive Thomas and the WPA had estimated. Our industries were all on death beds; our infrastructure was the worst in the Caribbean and the Americas; health, education, water and housing sectors were dreadful; and Guyana was essentially bankrupt.
This is what Carl Greenidge, Guyana’s present Foreign Affairs Minister, and Finance Minister in the 1980s up to 1992, had said about Guyana at the time: “Guyana is one of the poorest countries in the world, and the second poorest in the Western Hemisphere. In 1990, the external debt to GDP ratio was 951%. Between 1986 and 1990, Guyana’s average annual debt service payments were 153% of fiscal revenues. During the mid-1980s, the Government had fallen into such serious arrears with its multilateral, bilateral and other lenders that lending institutions such as the IMF, the Caribbean Development Bank, as well as bilateral lending, was cut off, and its cessation resulted in further deterioration of the economy, creating an economic crisis so severe (that), if not remedied through drastic measures, (it) would have resulted in complete collapse, from which recovery would be impossible”.
This is what the PPP inherited in 1992, and through sound macroeconomic and astute fiscal management, avoided the collapse that Greenidge had warned about at that time.
In 2015, APNU+AFC inherited the fastest and most consistently growing economy in the Caribbean, with a debt to GDP ratio among the best in developing countries around the world. From the 953% of GDP in 1991, the PPP reduced it to about 44% by the end of 2014.
Today APNU+AFC are on a debt orgy, and Guyana’s debt is once again one of the fastest growing debacles in CARICOM. The motion to lift the loan ceiling to G$50 billion per project will simply make this debt uncontrollable again. The Guyanese people will be victimized again, and generations to come will pay the price.
