THE US$900M resource envelope made available to Guyana by the Islamic Development Bank (IsDB) to facilitate a three-year programme targeting key development areas in the country, including economic infrastructure, rural development, human development and trade and competitiveness, must not be mistaken as a loan taken by Guyana.
“The government has not borrowed US$900M from the Islamic [Development] Bank,” Jordan told reporters, noting that there has been a clear misunderstanding of the difference between a loan and a resource envelope.

“As I said, it is a resource envelope- we will have to go through all of the due diligence before we can access even a small part of it. We now have to do the hard work by coming up with projects within the sectors,” Jordan said.”

The minister made it clear that whenever money is borrowed by the government, immediately thereafter, the contracts are taken to Parliament. “We have no outstanding contract of any borrowed money. It is a requirement under the law that whatever we borrow we must bring soon thereafter to the Parliament. It becomes a debt on the government’s books,” he emphasised.

In his address to the 43rd Annual Meeting of the Islamic Development Bank Group in Tunisia, Jordan explained that the IsDB fielded a programming mission in December 2017, when a work programme was formalised. He said approximately US $900M has been set aside to provide financing and technical assistance in key development areas such as economic infrastructure, rural development, human development and trade and competitiveness.

Government is yet to decide on how much of the US$900M will be borrowed. “It is like a credit limit. What I am saying is if I can find bankable projects for the whole thing, I will take the whole thing. I have sugar that needs financing, I have renewable energy that needs financing, I got roads…so if I have bankable projects…the bank will do its due diligence on Guyana too to see whether we have capacity to repay,” he said.
The Finance Minister said the identified sum has been made available to Guyana over a five-year period, 2017 to 2022 as a result of the programme mission. During that visit in December, an examination of Guyana’s future and developmental objectives was done to ascertain whether they were in sync with the bank.

LARGEST SUM
Meanwhile, the minister noted that the resource envelope is the largest made available to Guyana by any multilateral bank. He disclosed that the Inter-American Development Bank’s (IDB) new resource envelope for Guyana is US$38M, while the World Bank is US$90M, the Caribbean Development Bank’s (CDB) stands at US$110M, most of which he said will be used to blend with the UK Caribbean Infrastructure Partnership Fund (UKCIF) resources to complete the first phase of the Linden to Lethem road.
Those funds the finance minister said would complete the Linden to Mabura road and the bridge to cross the Kurupukari River.

“Still, we will have a phase between Mabura and Kurupukari that we would have to go looking for financing,” said Jordan, who noted that with the OPEC Fund for International Development (OFID), Guyana’s resource envelope is US$20M.
“When you put all of that together, it can’t even build the bridge across the Demerara River,” he said, noting that Guyana’s needs are great but expressed much gratitude to the international financial agencies for the assistance granted.

He noted that his administration is looking at a number of ways to finance the country’s development and one such way is through the Public-Private Partnership (PPP) framework. The Public-Private Partnership framework document will be made available on April 26, 2018, when Parliament resumes.

While there were PPPs in the past, the minister said they were not as successful as they ought to have been.

“When you look at the Marriott and the Berbice Bridge, you would appreciate that we couldn’t go down the road with that kind of model, where the government is left holding whatever you want to call it. We have put out a model there, it might not be perfect but we have had considerable help from the Caribbean Development Bank and other donors in fashioning it.”
That model he said has been approved by Cabinet and is being printed for distribution in Parliament on April 26.

WINDFALL
He noted that another way to source funds for development is through “a windfall”. That windfall Jordan said is in the form of what Guyana will receive from the petroleum sector. “Whatever you argue, great deal or bad, there is going to come to Guyana a significant sum of money unheard of in our history.”

The Finance Minister said his government’s blueprint is in the form of the Green State Development Strategy, while noting that it is not possible for there to be a discussion on what the “oil money” would be used for outside of a framework.
In reference to opposition critics, Jordan said his administration since taking office has borrowed only US$210, 068, 576. Of that sum, he explained that there were loans which were inherited from the previous administration. Some of the inherited loans are the US$45.2M East Coast Demerara (ECD) road being built by the Chinese, the Ogle by-pass road and the North West ferry.

“When you strip away the new borrowing by this government, it is under US$100M,” he stated, while providing statistics on the amount of money borrowed by previous administrations dating back to 1964.
Between 1964 and 1992, US$2, 047,854, 139 was borrowed. However in the 23 years of PPP rule some US$2, 611, 371, 581 was borrowed, the minister said.