Dear Editor,
If Guyana can get the debt cancellation it needs on the US$400 million it owes to the Inter-American Development Bank, it will be a huge (and deserved) boost to the economy, needless to say. But is the country willing to get that debt relief if it comes at the cost of future development assistance? That is the current debate at the IDB, and the decision could be made without effective input from anyone in Guyana.
Indeed, the latest plans on the table include cutting development lending to countries like Guyana and Haiti. These plans even propose the cancellation of loans that have been promised but not yet delivered. Of the five countries seeking debt relief, Guyana in particular would suffer from the cancellation of undisbursed cash on existing projects.
Guyana should be at the negotiating table, with a strong argument to protect future development funds.
It would get support if it pushed this argument, especially from Canada and the UK, but the US is taking the position that no new funds will be forthcoming, so debt relief will come at the cost of future loans. Brazil is pushing back, saying that the cost should not be carried by the IDB itself.
Their squabbling over the cost of debt relief has already delayed the programme for months, and could be reduced further if the IDB accepts proposals to limit the debts to be considered, and to delay the effective start date.
Internationally, some NGOs and governments are pushing hard on Guyana’s behalf, trying to get the debt relief while protecting development assistance. But the Guyana government itself has to jump into the debate more effectively, at the IDB and publicly, to protect its future funding and the debt relief that was promised.
Yours faithfully,
Derek MacDerek
The Social Justice Committee
Canada
Editor’s note
We are sending a copy of this letter to the Minister of Finance Mr. Ashni Singh for his attention.
