Govt continues to plunder nation’s coffers – Ali

first_imgRising debt levelsWeeks after declaring that Guyana was on its way to amassing exorbitant debt levels, Opposition Member of Parliament (MP) Irfaan Ali has once again condemned the A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration’s handling of the economy, contending that Government is continually plundering public funds. “Since taking up office in 2015, the APNU/AFC Government continues to plunder the nation’s coffers [by] outstripping private investment to satisfy their growing budget deficit and unruly profligate spending habit,” Ali highlighted on Tuesday.He also contended that market securities were in decline, noting that these were critical sources of foreign currency. Market securities are debts which can be redeemed within a year and can be in the form of stocks or bonds. Ali, a former Minister under the People’s Progressive Party/Civic (PPP/C) Government, stressed that his party’s successor was leading the country on a downward trajectory, which could cause the collapse of the nation’s financial system.Ali further observed that even private enterprises were continuing to record large deficits, coupled with shrinking contributions to net domestic credit. It was pointed out that from a fiscal point of view, Government deficits and total debt continue to proliferate.“When assessed, growth in total debt outstripped [Gross Domestic Product] GDP by more than 119 per cent points,” he stated.Ali had observed last month that based on estimates, the country’s debt-to-GDP ratio, using the 2018 GDP forecast of 3.8 per cent, would now be 73 per cent. He noted then that Government was increasing the country’s total debt by more than 28 per cent. It was observed then that the Administration was refusing to adhere to calls by international observers for the country to reduce large-scale borrowing.Highlighting the threats to job creation and supporting sectors such as forestry, agriculture and construction, the PPP executive pointed out a range of outcomes if these industries continued to suffer a decline.Finance Minister Winston JordanFrom rising non-performing loans, there could be a high tax burden, low growth rate and low disposable income. According to Ali, the economic decline will see high unemployment as businesses will opt to downsize their operations owing to high interest rates and low demand, coupled with depreciation of foreign exchange.At the end of December 2017, the Finance Ministry’s Public Debt Annual Report showed Guyana’s total debt, inclusive of external and domestic debt, stood at US$1.66 billion or 45.2 per cent of GDP. Earlier this year, Government secured a US$900 million line of credit from the Islamic Development Bank (IsDB) to develop the areas of agriculture, banking and finance, human development, energy, and rural development.The funds are also expected to go towards developing new co-generation capacity for the sugar estates’ operations and for the national electricity grid. Finance Minister Winston Jordan had explained that the IsDB financial arrangement has a resource envelope of US$900 million that is potentially available, from which the Government can borrow.However, some observers, including Ali, were of the opinion that these decisions will lead to a “massive” increase in debt.In April 2018, Opposition Leader Bharrat Jagdeo opined that Government was, in fact, “pawning our futures”.last_img read more

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