At what point will our indebtedness be repaid?
January 17, 2020
Dear Editor,Having read the International Monetary Fund’s Guyana: Staff Concluding Statement of the 2018 Article IV Mission, I feel compelled to share my analysis in layman’s terms.I believe the pertinent paragraph is “Guyana’s medium-term prospects are favourable. The commencement of oil production in 2020 will be a turning point. The main direct effect on the domestic economy will be through higher fiscal revenue, and spillovers to supporting activities. The balance of payments will swing sharply to positive after 2020. Oil revenue significantly improves the fiscal outlook, and is expected to place the public debt on a downward trajectory. The mission welcomed the progress made on establishing a comprehensive fiscal framework for managing oil wealth”After the wheat is separated from the chaff, the report leaves no doubt that our nation’s economic survival is now dependent on oil production in 2020.In three short years, the dreaded ‘Dutch disease’ has overtaken a formerly robust economy. Our forecasted growth targets are not being realized. Spending is up, we have moved from a $10 billion surplus to a $48 billion deficit. Maladministration, caused by lack of vision; ad hoc approaches in place of policy; profligate spending; bypassing of procurement procedures; payment of billions in legal settlements; questionable tenancy agreements; refusal to declare assets to the Integrity Commission; expensive Commissions of Inquiry handed out like sweets to cronies; the list of reckless acts with the public purse is long, and continues to grow.The direct consequence is: the only way back to solvency for Guyana in the medium term is for ExxonMobil to pump oil and bail us out.Editor, while the IMF report speaks positively of a “comprehensive fiscal framework for managing oil wealth”, I must ask at what point will our indebtedness be repaid, so the saving could begin? With two more years of APNU/AFC spending ahead of us, I can only see the “downward trajectory” alluded to by the IMF getting steeper.This report makes it clear why the APNU/AFC Administration will not countenance the possibility of reopening negotiations with the oil company; for when one’s hand is in the tiger’s mouth, one must pat the tiger’s head.Sincerely,Robin Singh