…says all financing sought on concessional terms
Guyana’s stock of foreign debt grew by 12 percent to US$1B by the end of 2010 due to new disbursements of project loans, and payments on these amounted to US$28M during the same period.

The latter came as a result of the commencement of repayment of the principal owed to several creditors including Venezuela and the International Monetary Fund.

“Mr. Speaker, in the case of domestic debt, the stock increased by 15.4 percent to $100.5B, reflecting a higher issuance of treasury bills to contain the growth in liquidity,” the minister said in his budget speech on Monday.

He said the total stock of treasury bills increased by 24.7 percent to $93.2B, “mainly due to higher issuance of 364-day bills for monetary operations, with the commercial banks accounting for a 70 percent share, down from 73 percent in 2009.”

He said total domestic debt service increased by 15.1 percent to $4.9B due to higher principal payments associated with the redemption of debentures.

“We continue to use diplomatic and other efforts to reduce debts owing to bilateral non-Paris Club creditors in keeping with our Paris Club obligations. The most recent analyses indicate that Guyana’s external debt is, and will continue, on a sustainable path over the medium term. This is premised on Government continuing to engage in prudent borrowing, including contracting new debt on the most favourable terms,” he said.

“Mr. Speaker, notwithstanding our robust economic performance in recent years, Guyana is still a developing country with significant developmental needs and investments to be made if we are to achieve the key goals we have set ourselves, including the Millennium Development Goals. For this reason, even as we increase steadily our own ability to finance these investments, Government will spare no effort in mobilizing as much development support and assistance as we possibly can from willing partners, and at the most concessional terms available, to support our development efforts,” he said.

The minister noted, however, that among some of Guyana’s current partners, the landscape for accessing development assistance appears to have changed dramatically. “As a consequence, reliability and predictability of development assistance is seriously jeopardized. The dislocating effect of unpredictable development assistance to the management of our economy compromises both near and medium term planning,” he said.

He noted, however, that Guyana will continue to call for a show of greater commitment on the part of the more advanced economies both to their development support undertakings and, in particular, for greater attention to the principles of timely and effective delivery of aid.
“Further, in recognition of the growing need to diversify the sourcing of concessional financing to support our expanding development agenda, work will be undertaken to strengthen the capacity in working with non-traditional development partners as well as the establishment of an information database to support the analysis of aid effectiveness to our country,” he announced.