Raising the public debt ceiling puts future and present generations at risk – Former Finance Minister
Kaieteur News – Following the passing of two orders yesterday in the National Assembly by the Senior Minister with responsibility for Finance, Dr. Ashni Singh to raise the debt ceiling for domestic and external debt of $ 500 billion and $ 650 billion respectively, several members within the political opposition. has expressed great concern about the implications of this decision for the nation ‘s taxpayers.
During an invited comment yesterday with Kaieteur News, former Finance Minister Winston Jordan was keen to point out that raising the debt ceiling is essentially a danger to current and future generations who would be made to serve the balloon debt.
Jordan recalled that the logic offered by Dr. Singh for raising the domestic debt ceiling was to redress the existence of a large Consolidated Fund overdraft in Guyana Bank that had accumulated over the past five years. Dr. Singh has also said that the increase in the external debt ceiling will accommodate the current level of contracted external debt, along with new borrowing envisaged to fund the government’s development agenda.
Jordan was quick to point out, simply, this is an attempt by the Prime Minister to pull the proverbial wool over the eyes of the discerning public as the evidence will show that, over the past five years, the APNU + AFC regime had only racking and $ 92B deficit. In contrast to the PPP / C, Jordan said it has increased the same for 2020 alone.
The former Finance Minister said, “… The deficit for 2020 under PPP was projected to be $ 75B before they last went to Parliament on December 28, to draw another $ 17B. So if you take them all the revenue they claim to have collected in 2020 and they have spent all the money they claimed to do, then in a year, their deficit in 2020 is equivalent to a deficit accumulated APNU + ADFC regime in five years… ”
Jordan added, “… So his attempt to defraud will not hold. What you are seeing is clear mismanagement of the nation’s resources in a short space of time compared to the previous regime. ”
In addition, Jordan said that the PPP / C is consistent in the practice of saying that the APNU + AFC has proclivity for the nation’s overtaking and spending. Jordan said that while this is still one of the ‘crazy mantras’ he has an affinity for repeating, the PPP has now replaced a love of borrowing and spending. He warned again that this approach will leave a huge burden on current and future generations.
The former Minister said, “In essence, the PPP will expand and lend tremendously instead of introducing high quality domestic policies that would negate the need for such borrowing. In the 2020 budget, for example, a range of tax collection measures were eliminated and as a result the balloon was the deficit. ”
He continued, “So what we ended up with is the worst deficit this country has ever seen in its history in one year. What kind of policy is that? Is that a sound macroeconomic policy? … ”
Jordan also lamented the fact that the PPP / C continues to criticize the Natural Resources Fund and its governing legislation while the account held at the Federal Resource Bank in New York continues to collect millions of dollars from the sale of the nation’s oil. Instead of using this money, Jordan said the new Guyana government had decided to “borrow so that there is no tomorrow, so that we are drunken sailors.”
At the end of the day, the economist said that raising the debt ceiling was without question a daunting development, especially at a time when one would have expected that part of the new oil bounty would not only negate the need for borrowing new but retiring some of the existing debt. “… It seems as if we have taken one step forward and 10 steps back,” the former Minister concluded.