Raising debt ceiling pushes Guyana to bankruptcy – PPP

first_img…as Govt uses 1 seat majority to pass motionAt Friday’s sitting of the National Assembly, Government used its one seat majority to pass a motion that extends the ceiling for the State to guarantee debts, to up $50 billion, for any project upon which the Government wishes to embark upon.The parliamentary People’s Progressive Party/Civic (PPP/C) Opposition has described the move as a “surreptitiously” one, since the “most dangerous” motion was presented last that evening.According to the Opposition, the passage of the bill paves the way for Guyana to once again be on the road towards “financial and economic bankruptcy.”In a statement on Saturday, the Opposition reminded that back in 2014, while the A Partnership for National Unity/Alliance For Change (APNU/AFC) was in Opposition, it had rejected a motion to raise the debt ceiling to the required level with respect to the Amaila Falls Hydro Project and as such, the project was killed.“We must emphasise that in relation to the Amaila Falls Hydro Project, the PPP Government was not guaranteeing a debt but was guaranteeing contingent liability; that is, the Government would have only become liable if GPL refused to buy the power or pay for the power bought under a Power Purchase Agreement,” the Party stated.It went on to point out, however, that Finance Minister Winston Jordan on Friday informed the House that the debt ceiling is being raised to guarantee a $30 billion liability which is being incurred to fund the Guyana Sugar Corporation (GuySuCo).“We have already been told that this funding is being collateralised by the assets of GuySuCo, now held by NICIL (National Industrial and Commercial Investment Limited). If this is so, it begs the question of why the need for a Government guarantee. The assets which will be collateralised are valued far in excess of 30 billion dollars,” the Opposition questioned.The PPP further noted that the Finance Minister boasted of securing very concessionary interest rates from Republic Bank Limited. However, the Party said the Minister failed to disclose that loans that are fully collateralised and further secured by a Government guarantee, attract far lower interest rates than those he boasted about. This, the Opposition noted, is so because the risk is de minimis.“The question that must be asked of Republic Bank is; would it be prepared to extend the same terms and facilities to another borrower with similarly strong collateral? Or, is there some quid pro quo arrangement in place between this bank and the Government. What is certain, however, is that by this motion, the foundation has been laid for large-scale borrowing without parliamentary scrutiny,” the missive further detailed.It continued by saying that as was done under the Forbes Burnham/Desmond Hoyte regimes, the nation will only learn of the bankruptcy when it is too late.The parliamentary Opposition went on to say that the debt accumulated from 2015 to 2018 plus the 30 billion from Republic Bank, coupled with the US$900 million which will be borrowed from the Islamic Development Bank, doubles the total debt which the PPP had left after 24 years in Government.last_img read more