Guyana rises from 'poor' to 'middle income' status
by Wendella Davidson
December 22, 2003
GUYANA, described in a 1990 report of the Caribbean Council of Churches as the poorest country in the Western hemisphere behind Haiti because of its economic status, has improved its position from that of a low-income country to that of middle income.
The achievement is credited to the People's Progressive Party/Civic (PPP/C), which assumed the Government in 1992, and according to the Head of State, President Bharrat Jagdeo, he is also proud of this country's record of removing the debt burden from the backs of the people of this country.
"What we have done, we have restored this country to viability from a state of bankruptcy - an achievement not recognized by many... we have removed the burden of the debt from the backs of future generations the people... paying of debts come from taxing people," the President told reporters at a news briefing Friday last at the Office of the President (OP).
The briefing focused on Guyana's recent qualification for debt relief under the enhanced framework of the Heavily Indebted Poor Countries Initiative, and on plans to utilize the money.
Alluding to criticisms by some about the Government's borrowing strategy, President Jagdeo remarked that though the country borrows money, its foreign debt has contracted under the PPP/C, with a grant element of less that 35 per cent.
The cost of borrowing ranges from 0.75 per cent interest to about 2 per cent interest and the repayment period averages about 30 years. He pointed out that for some countries that pay back is longer and others shorter.
In Guyana's case the repayment period is long and as such does not place an undue burden on the treasury because of the long repayment period.
The President further explained that the current debt by Guyana has been contracted by the Government, since assuming office in 1992, to about US$900 million, of which a significant portion - over US$300M - is yet to be disbursed.
And, in spite of contracting an additional bill, the Guyana Government is on record of having reduced its stock of debt by over US$700M, President Jagdeo told the news conference.
According to him, the present stock of debt is US$1.2B, reduced from in excess of $2B, not withstanding the fact that the Government has chalked up some US$900 million more in debt.
He, however, made it clear that the Government is not putting the country into greater debt, as is felt in some circles.
Instead, two things have happened in the past decade, the stock of outstanding debt has been reduced by over US$700M, in spite of its borrowing trend. He added that 94 per cent of the country's revenue is being used to service the said debt to bring it to just below 20 per cent.
President Jagdeo reiterated that the Government has restored the country to viability from a state of bankruptcy, "an achievement not recognized by many... we have removed the burden of the debt from the backs of future generations the people... paying of debts come from taxing people."
As a result, Guyana has been reducing this country's obligation abroad to foreign creditors, thus leaving more resources to be spent on the country, a record President Jagdeo stressed he is very proud of.
The President suggested that reporters check situations around the region to observe the status of where the debt service obligation was in relation to revenue 10 years ago.
He noted that in many of those countries it has doubled, with 64 per cent going to service debt in some CARICOM countries.
President Jagdeo said, too, the country still needs European support, development assistance, and grants from bilateral sources.
The Head of State, who also expressed the view that Government must get value for money it expends on resources it expends, said he has been urging some of his ministers to set up special care projects.
He said, too, he hopes to use part of the funds garnered from the debt relief pact to install surveillance cameras at the airport.
"I would like to see security cameras in every 'nook and cranny' at the airport which could be monitored in the offices of senior officers, such as the Commissioner of Police...
"The Customs area could be monitored by the Commissioner General of the Guyana Revenue Authority.
"The process can be done via the Internet to allow government to get a handle on stamping out the theft of public resources," the President added.