Finance Minister, Winston Jordan announced that government has managed to further reduce its public debt to 46 percent of the Gross Domestic Product (GDP) at the end of 2016, relative to 2015.
He made the disclosure during the opening ceremony of a second workshop on Sustainable Funding Strategy which is being organised by the Ministry of Finance in partnership with the Latin Amerindian Centre for Monetary Studies.
Guyana’s public debt was reduced by 3.6 percent over the period 2014 to 2015.
Records indicate that the total public debt to GDP ratio reduced from 51.9 percent in 2014, to 48.6 percent in 2015. By the end of 2015, the total stock of public debt stood at US$1.5 billion.
Jordan noted that Guyana has made notable progress in the area of debt management with achievements such as the formulation of a National Sustainable Funding Strategy in 2015.
“These achievements are tangible indications of our Government’s redoubled efforts to ‘raise the bar’ in the management of public finances, including the public debt, in order to heighten transparency and accountability, value for money and efficient and effective allocation of our resources,” the Finance Minister stated.
He recalled that the country is well acquainted with the harsh consequences of an onerous debt burden and pledged that his administration will ensure such a situation does not reoccur.
“In spite of many unhelpful comments and misguided actions, since the presentation of the last budget, our Government remains firm in its stance to do all that is required to prevent the recurrence of such situations,” he stated.
The Minister emphasised that, “Some of our policy measures may be bold in their intent, leading to unpopular reactions. However, while governments are often swept into power on a wave of popularity, they are similarly swept out ignominiously when they succumb to demands, especially by special interest groups, to implement policy measures that have short term gain for these groups, but long term pain for the mass of the population.”
Despite the mild reduction in public debt, Jordan said government cannot be complacent.
“Neither do we have the luxury of sitting on our laurels for the lower debt ratio was achieved at the expense of the unsatisfactory implementation of the Public Sector Investment Programme (PSIP), where we failed to achieve an exemplary disbursement rate of our foreign funded projects. This led to the unacceptable situation of negative net inflows by our major donor, at a time when foreign exchange supply was challenged because of under-performance in critical sectors and areas of the economy,” he stated.
The Finance Minister also reiterated his government’s hesitance to borrow money to finance possible projects which would be critical to the country’s burgeoning oil sector.
“While tempting, as it would provide important resources to finance many critical pipeline projects, we have to be wary of the volatility of the oil market and our capacity to utilize such resources in a transparent and accountable manner. We will continue to assess the situation and weigh carefully our options before any decision, in this regard, is made,” he outlined.
Meanwhile, the workshop which is hosted at the Pegasus Hotel The workshop began on June 12th and will continue until Friday June 16th, 2017.