Luncheon says US$73M credit from IMF ‘speaks volumes’ By Mark Ramotar
Guyana Chronicle
September 19, 2002

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HEAD of the Presidential Secretariat, Dr. Roger Luncheon has joined the bandwagon lauding the International Monetary Fund (IMF) for approving a much-needed and very important US$73M three-year credit to Guyana.

He yesterday said it is an indication of the Government's economic policies that for vast numbers of Guyanese are reflected in the country’s macro-economic stability.

Luncheon told his regular post-Cabinet news conference at the Office of the President in Georgetown that this is indicative of the confidence the IMF has in Guyana's Poverty Reduction Strategy Paper (PRSP) and the Government's economic policies.

"Guyanese have, of course, welcomed the news of the IMF's approval under the Poverty Reduction and Growth Facility (PRGF) of the US$73M on concessionary terms over the next three years. Cabinet, of course, whilst noting the successful decision by the Board of the IMF, is more concerned or equally concerned (with) the indications of the approval," he said.

According to Luncheon, Cabinet recognised clearly that the approval of the credit by the Executive Board of the IMF is an indication of the People's Progressive Party Civic (PPP/C) administration's economic policies that for vast numbers of Guyanese are reflected in macro-economic stability.

The approval, however, was also important in that it supported the financing part of the budget, he said, asserting that in "political terms", it speaks volumes.

"That approval is despite the aggravations in our domestic environment and (with) political stability...aggravations initiated and being carried out daily by the main opposition Peoples National Congress/Reform (PNC/R).

“It is also despite the frantic efforts of the PNC/R and their acolytes, in their useless and unjustified protest to the management and to the boards of the international financial agencies such as the IMF, the World Bank and the IDB," Luncheon said.

He noted that the PPP/C administration knows that this support shown by the IMF "would now silence (its) hereditary critics…and it expects those critics to redouble their useless efforts to prevent (it) creating economic improvement in Guyana".

Finance Minister, Saisnarine Kowlessar indicated earlier this week that the approval of the credit by the Executive Board of the IMF "displays a vote of confidence" by the international donor community in Guyana's efforts and its commitments to prudent economic management towards sustaining growth and reducing poverty.

"Altogether, it is a tremendous boost of confidence from the international donor community in Guyana's efforts towards having macro-economic stability and discipline in the economy as a whole," Kowlessar said Tuesday.

The IMF Board approved a three-year credit under its PRGF for an amount equivalent to SDR 54.55 million (US$73M) for Guyana.

An IMF press release on Monday said the Executive Board determined that Guyana's PRSP "provides a sound basis for Fund concessional financial assistance. "As a result, Guyana will be able to draw immediately up to SDR 5.5 million (about US$7.3M) from the credit," the IMF said.

At a news briefing on Tuesday dealing entirely with the IMF's approval of the credit, Minister Kowlessar said "this vote of confidence by the IMF" clears the way for other international donors to provide interim assistance to the Government. According to him, both the Inter-American Development Bank (IDB) and the World Bank "will now view Guyana's position more favourably based on what has taken place over the last few days with the approval of the IMF programme".

Also, it will clear the way for assistance from bilateral donors from countries with which Guyana shares bilateral relations, the Finance Minister said.

He pointed out that some of these countries would usually use the IMF as a "yardstick" or "measuring rod" for providing bilateral assistance.

Kowlessar said the IMF credit will also help to service Guyana’s debts and reduce it further.

"So based on all of these factors, I think it was a big plus for Guyana getting this assistance at this point in time and I am sure it will be used to the benefit of all the people of this country," he assured.

"The Government is very pleased with the approval of the IMF Board of the PRGF, which is a concessional facility for low income countries, and is based on the PRSP," Kowlessar told reporters.

He, however, noted that the success of the programme will naturally depend upon all stakeholders playing a role, since at the moment Guyana is faced with tremendous problems both locally and internationally.

The approval of the credit was also lauded by President Bharrat Jagdeo, who said Guyana must be practicing sound economic policies to get such an approval from the IMF.

"I think it is a good thing for the country, especially in light of some people trying to block this programme," the President told reporters on Tuesday.