THE challenge in advancing development is funding it in the presence of “finite fiscal” space, which is addressed by utilising public-private-partnerships (PPPs), according to Finance Minister Dr. Ashni Singh.He told a press conference on Thursday: “I believe that on every Public-Private-Partnership we have done, I am convinced that they were good transactions. There is no doubt in my mind about that…in each instance the Public-Private-Partnership structures in Guyana are good structures.”

He said the PPPs are valuable instruments, in the range available to countries like Guyana, for the purpose of financing development.
“I am convinced that the Public-Private-Partnership (PPP) model is an extremely valuable instrument…I am not alone in this regard. Development practitioners around the world increasingly recognise the merit of this model, not today or yesterday, but for a number of years,” Minister Singh attested.

GLOBAL RECOGNITION
He added that private financing of public infrastructure is an initiative that many countries have been implementing for years and underscored the fact that there is global recognition of the merit of this model, so much so that many countries have replicated it.
Continuing, he said: “In mobilising private financing, a public infrastructure need can be met in the presence of finite fiscal space…countries have finite capacity to borrow, just like individuals and we cannot and should not borrow beyond our capacity to repay. We should not contract debt that is unsustainable. If we do so, we will end up in a situation that Guyana found itself in during the 1980s and early 1990s…we essentially became bankrupt.
“…there are infrastructure needs. There are projects that have to be implemented. In Guyana we have the Amaila Falls Hydropower Project, an $800M project, the road to Brazil and the deep water harbour which are important development needs….these are important projects.”
The Finance Minister explained that, when a country increases its borrowing, there is an impact on that country’s creditworthiness and its ability to access financing in the future.
“The alternative to private financing is public financing and that essentially means Government borrowing or Government taxing the people…yes if the project is funded in the public sector you will not have to remunerate the private investors, but there are downsides,” he cautioned.
Minister Singh reiterated the benefits of PPPs in, as he described it, “marrying” opportune circumstances.

HAPPY MEETING
He said: “What the Public-Private-Partnership (PPP) does is provide you with a happy meeting of two circumstances.On one hand you want to finance development but you don’t have enough fiscal space to borrow and on the other hand private investors are looking for opportunities. So you are able to marry the two and mobilise the private financing to fund the public infrastructure project.
“…the question facing the developing world is how do you finance a development need without contracting unsustainable debt….you either raise domestic revenues, which has implications, or borrow it. Either way, it has a fiscal impact that could be potentially unsustainable.
“So how do you raise the financing? Then on the other hand you have the fact that private investors are looking for development opportunities, domestic private investors and external private investors.”
Minister Singh concluded that, as is the case for many other countries, PPPs are working for Guyana in advancing the current Administration’s development thrust.
Additionally, one of Guyana’s development partners, the Caribbean Development Bank (CDB), of which Guyana is a Borrowing Member Country (BMC), at its 44th annual Board of Governors’ meeting hosted a seminar on PPPs, where its benefits were lauded. (Vanessa Narine)