Dear Editor,
I believe it relevant to respond to a January 29 article appearing in the Kaieteur News with the headline, `Raising public debt ceiling spells danger for future and current generations – Ex-Finance Minister.’ In the article, former Finance Minister Winston Jordan is quoted as indicating that he does not agree with the government’s Parliamentary proposal to raise the domestic debt ceiling to facilitate higher borrowing levels. The article also mentions that Mr. Jordan’s position is that the government should use monies from the Natural Resource Fund (NRF), instead of relying on a policy of borrowing.
The latter position goes against the grain and rationale for the NRF’s intended purpose of being available for emergencies, and which should be used prudently and sustainably for the benefit of future generations of Guyanese citizens. Moreover, it is unnecessary to touch the accumulated funds in the NRF at the moment because those reserves represent significant and available cash liquidity for current and future circumstances related to economic development and growth strategies. Both private sector entities and governments borrow, even when savings are available, because it ensures preserving current cash flow while pursuing growth and development initiatives.
Guyana should pursue an unprecedented expansionary economic policy to offset the effects of one of the most extraordinary events in modern global history: the COVID-19 pandemic. The business sector has asked persistently for stimulus and other financial support to cushion the deleterious effects of COVID. Similarly, additional aid and support will have to be extended to citizens in the form of direct cash transfers and other means. Many individuals have already expended the paltry $25,000 grant and a second round of support is absolutely necessary, given the pandemic has now lasted nearly a year.
Guyana’s economy is in a significantly different place than it was in the past, thanks to the impacts of the oil & gas economy. This development necessitates an unparalleled upgrade of the country’s infrastructure along with greater levels of investment in numerous areas, including education, health care, social security, technology upgrades, etc. — all of which will significantly raise the standards of the quality of life for every Guyanese citizen.
All this will require the government to spend more and the most appropriate source of income would be to pursue debt financing rather than to implement policies that tax citizens and businesses which are already under severe strain as a result of COVID-19.
Yours faithfully,
Clinton Urling
