Dear Editor,
Finance Minister, Dr Ashni Singh, has attempted to deflect from the telling growth in the National Debt in three months. The PPP acquired US$2.1 billion in debt from the PNC. It got about 75% written off leaving it with US$525M in debt. In the past 20 years to March 31, 2012 the PPP has borrowed US$1.218 billion in debt. The PNC borrowed anywhere from US$800 million to US$1 billion at most in 28 years, but got hammered by interest and penalties for defaulting on its debt, leading to a total debt of US$2.1 billion by 1992. In typical puerile, nonsensical and Pavlovian fashion, Dr Singh did what he and the rest of those trained in the great propaganda institution within Freedom House do, by spitting out figures from 1992 when the PNC left power. Well, this sordid exercise is getting soiled and tired. Every single Guyanese who lived during that time knows that story. They know the PNC was an economic failure. But we are not living in 1992. We are not incurring debt in 1992, we are incurring debt today. What we borrow in 2012 has nothing to do with what we borrowed in 1992. They are two separate loans borrowed by two separate governments. This recurring blame of the PNC’s errors is hypocritical and ludicrous especially since the PPP used this same blame game against the PNC in achieving all those incredible write-offs of US$1.575 billion in debt. Indeed, the PPP rightly cried to the creditors that it was not their problem and that the PNC created this mess, and was pitied. So, to come here and try this pitiable game when it benefited from it exposes the PPP for the shameful entity it has become.
Twenty years is a long enough time and the PPP can now only be compared to itself.
Dr Singh conveniently ignores in his comparison that in the last two years of PNC rule after Hoyte converted the economy to the model the PPP has inherited and now operates today, the PNC achieved GDP 6.8% annual growth. Dr Singh ignores the fact that by the end of the Cold War in the early 1990s, nearly three-quarters of the world’s economy was devastated, crippled with high debt levels. Most of those nations in Guyana’s shoes have outstripped Guyana in growth and in debt management. Dr Singh refuses to compare Guyana’s debt to similar economies to see how much of a disaster this debt will become. I am increasingly finding these de-contextualized ramblings tedious and boring. The bottom line here is the PNC left the PPP with US$525 million in debt after write-offs, and the PPP has borrowed, on its own, US$1.218 billion in debt in 20 years. The issue here is that in three months from January 1, 2012 to March 31, 2012, the PPP borrowed a staggering US$500 million.
Aren’t the people of this country supposed to be deeply worried when a government slapped by that same electorate with a minority government for its corruption and fiscal irresponsibility just a few months before still goes on a squandering borrowing spree? Isn’t the Guyanese nation to be concerned that the PPP borrowed half a billion US dollars in just three months and we do not know where this money went? Isn’t Dr Singh off in the depths of the deep end when he quite facetiously tries to defend the PPP’s borrowing without even offering a clue as to where that half a billion US dollars went and what the debt is today? If by March 31, 2012 Guyana was US$1.743 billion in debt, surely we are now at least US$2 billion in debt.
The Finance Minister wants us, in juvenile fashion, to forget what we borrowed last year and contemplate what we borrowed 20 years ago. Dr Singh forgets to tell us that our debt to GDP ratio was 47% on December 31, 2011 and jumped to 64% by March 31, 2012. If we are presently at the US$2 billion debt mark, it means that ratio is now 71% and heading in the disastrously wrong direction. Why hasn’t Dr Singh mentioned that in one year that ratio has increased an alarming 24%?
Even worse, this is frightening because of what is to come. We have at least US$1 billion from the Amaila Falls hydro project, US$130 million from the Timehri airport extension, the US$17 million Indian specialty hospital and the US$50 million Marriott where tens of millions of US dollars of taxpayers’ money may have been expended. This is not even counting what borrowing frenzy the PPP will go on closer to the election to operate white elephant projects in an effort to try to buy voters with their own money. When we add this up, we could potentially be looking at US$3.5 billion or more in debt by the 2016 election. At this rate, our debt to GDP ratio could exceed 100% by 2016. If there is ever another commodity bust on the world market causing prices to fall, our commodity-driven primary-production economy will be battered. Add the expected appreciation of the Chinese yuan in the future and these loans will become costlier.
What Dr Singh is not telling Guyanese is the fact that debt relief and write-offs will not be forthcoming to Guyana after it squandered the relief provided by the Paris Club and rich nations. There is nothing wrong in borrowing to fund development, but where has the PPP spent US$1.5 billion it has borrowed in the past 20 years when it has fewer sectors to fund due to privatization? It has mostly patched infrastructure the PNC built brand new, as opposed to building much anew and has handled the most revenues and export earnings of any government since independence. All evidence points to a minimal or possibly negative return on that borrowing, made worse when Guyanese labour cannot be hired to build those projects. A lot of this borrowed money is stolen, squandered and mismanaged. We, the Guyanese people and our children and their children will have to repay it.
Yours faithfully,
M Maxwell
