By Svetlana Marshall

AS GUYANA courts new financing institutions, it is looking to accede to the Islamic Development Bank by mid-year, Finance Minister Winston Jordan has announced.On Friday, he told the National Assembly that, over the last 23 years, the country had capitalized heavily on concessional lending; however, when it acquired the status of a low-middle-income country, as against being a low-income country, access to loans on concessionary terms from traditional lenders became difficult, and Guyana must consequently find other ways of accessing financing for development.
With much optimism, the Finance Minister then disclosed that by mid-year Guyana should be accepted by the Islamic Development Bank, paving the way for greater access to funds. “That will open another avenue of lending for us,” he told the House.

The purpose of the Islamic Development Bank is to foster the economic development and social progress of member countries. The functions of the Bank are to participate in equity capital and grant loans for productive projects and enterprises, besides providing financial assistance to member countries in other forms for economic and social development.

Minister Jordan has, however, stressed that in maintaining a sustainable debt, there must be a judicious mix regarding the debt and the expenditure that the Government intends to undertake.

He then addressed the issues of “fiscal space” to initiate new large-scale projects. Fiscal Space is the amount of manoeuvring room that the government has to implement some of its pet projects and programme, Minister Jordan explained.

With Government only eight months in office, the focus is now on rollover projects from the last regime. He emphasized that billions of dollars in loans from the rollover projects have crowded the fiscal space, and so even if Government finds additional funds for large-scale projects, such a move would widen the fiscal deficit.

“That’s the dilemma you face. If the Government were to bring in new projects, it would have to crowd out other projects to prevent the deficit from ballooning,” he explained.