EVEN as the country has made progress in the management of its debt, Guyana will continue to work hard to ensure that debt levels remain sustainable.
This is according to Minister of Finance, Winston Jordan, when he addressed participants at the opening session of the National Workshop on Sustainable Funding Strategy which was held at the Pegasus Hotel recently. The event, which was hosted from June 12 – June 16, 2017 was jointly organised by the Finance Ministry in collaboration with the Centre for Latin American Monetary Studies (CEMLA).
While addressing the gathering, Jordan noted that under the Public Debt Management Capacity Building Programme (PDP) Strategic Country Plan for Guyana, the country has made notable progress in the area of debt management. He said the programme concludes this year.

The Finance Minister singled out several areas which have progressed here and these include the formulation of a National Sustainable Funding Strategy in 2015, inclusive of a Debt Sustainability Analysis and Public Debt Strategy, a comprehensive Public Debt Management Procedures Manual which has improved and ensured consistent debt management operations whilst reducing operational risk; and the first National Workshop on Debt Management Self-Evaluation and Improvement (DMSAI) in 2016, using the World Bank Debt Management Performance Assessment (DeMPA) methodology to assess Guyana’s debt management operations, and chart a course for improvement and achievement of international best practices.
“These achievements are tangible indications of our Government’s redoubled efforts to ‘raise the bar’ in the management of public finances,” he said, adding that such efforts include the management of the public debt. He said such efforts ensure heighten transparency and accountability, value for money and efficient and effective allocation of the country’s resources.
Minister Jordan said that Guyana is well acquainted with the harsh consequences of an onerous debt burden as well as the painful process of structural adjustment; and the harsh outcomes of weak and impudent management of the public purse by previous administrations.

He noted the government remains firm in its stance to do all that is required to prevent the recurrence of such situations.
“Some of our policy measures may be bold in their intent, leading to unpopular reactions,” he noted. However, Minister Jordan said that while governments are often swept into power on a wave of popularity, they are similarly swept out “ignominiously” when they succumb to demands to implement policy measures that have short-term gain for interest groups, but long-term pain for the mass of the population. “History is a great teacher, for which we should learn its copious lessons”, he said.
The Finance Minister said that hard work must continue to ensure that debt levels remain sustainable and within prescribed parameters. He said that even with past fiscal consolidation and oil revenues on the horizon, “We must be cognisant of the new challenges that confront us, such as dwindling sources of concessional financing and vulnerability to external shocks.”

Minister Jordan said that the government has managed to reduce the debt further to 46 percent of GDP at the end of 2016 relative to the previous year.
“But we cannot become complacent,” he said, noting that the government does not “have the luxury of sitting on our laurels, for the lower debt ratio was achieved at the expense of the unsatisfactory implementation of the Public Sector Investment Programme (PSIP).”
As regards the latter, he said the country failed to achieve an exemplary disbursement rate of foreign-funded projects and according to him this led to “the unacceptable situation of negative net inflows by our major donor”. He said it occurred when foreign exchange supply was challenged because of under-performance in critical sectors and areas of the economy.
Minister Jordan noted that the country must be cognisant of the impact on the public debt, of the many loans contracted by the previous administration, several of which remained largely undisbursed at the time the APNU+AFC government assumed office. He listed the CJIA Modernisation Loan of US$135 million and East Coast Road Widening, US$50 million from China Exim Bank, as examples.

He also noted several “ill-advised and/or poorly conceived projects” including the Skeldon Sugar Factory, Marriott Hotel, the widening of Sheriff Street and other investments embarked upon by the previous administration, which he noted do not contribute to the Treasury. Nevertheless, he said the repayment of such debts, are being met by the government and by extension tax paying citizens.
Meanwhile, Minister Jordan noted that over the last two years, the government has sought to widen the range of multilateral partners, from which it can access concessional or near concessional resources, given Guyana’s new status of upper middle income country.
He listed partnerships with the Islamic Development Bank and the OPEC Fund for International Development (OFID) in that regard. The Finance Minister is expected to sign an Investment Protection Treaty with the latter next month. He said the government will also undertake preliminary discussions with the New Development Bank, also known as BRICS Bank, with a view of accession, whenever that Bank makes the decision to expand membership.
He said too that Guyana is on record as being “uneasy about borrowing” against future oil revenues noting that while the move is tempting, as it would provide important resources to finance many critical pipeline projects, the government is wary of the volatility of the oil market and the country’s capacity to utilise such resources in a transparent and accountable manner.

Minister Jordan described the workshop as opportune, even as the government assess Guyana’s economy in the context of its debt sustainability and craft strategies that strike a careful balance of cost and risk. In addition, he said it even provided an opportunity to reinforce the technical capacity of government officials in areas related to sustainable funding strategy. He said following the event, he plans to install a permanent team in government which will be able to revise the national strategy, periodically.
“It is my steadfast belief that we should have the capacity to conduct these assessments, annually, so as to maximise ownership of the strategies, track progress made, monitor macroeconomic stability, and foster sustainable growth,” Minister Jordan noted. He said it bodes well in achieving and sustaining a ‘good life’ for all.