To be in debt or not to be in debt?
DEAR EDITOR,
Given the following factors:
1. We have an escalation in the border conflict with Venezuela and an unreliable neighbor in Suriname as shown by the latest conflict.
2. An aggressive timeline for current planned investments, many of which do not show clear investment returns or improve the security of current investments on the coastal plain.
3. The economic uncertainty facing the world as a result of the pandemic and the increasingly unstable China and US relationship.
It is necessary for the government to reel in spending and take a conservative stance on debt. The current proposal sets an uncomfortable percentage of our national earnings in play for debt repayment, reducing the momentum to strengthen our currency. The percentage of export dependence in the economy and the key earning sectors that support our high level of imports would benefit from a stronger cash position. In terms of National Border Security, learning is gained through observing Vietnam and how it manages its national defense.
The gold and mining sectors as well as the oil industry are exposed to externals over which our country has little control. The sugar and agricultural sectors should see a positive economic environment given the expected global shortage. These combined sectors offer a positive outlook for earnings and ensuring that the level of spending increases our financial independence during these uncertain times is vital to our National Security. The key to achieving the goal of financial independence is the anticipated decline in oil and gas imports. Becoming a net exporter in the sector will help reduce the draw on currency reserves and offer an opportunity to strengthen our purchasing power.
As mentioned in a previous presentation, the net present value of our project portfolio needs to be positive and demonstrate a clear level of return within a manageable timescale and not leave our economy unnecessarily exposed to unanticipated economic shocks and anticipated. The world is currently in a very uncertain economic environment and we need a strong and high level balance sheet of Foreign Exchange Reserves to get us through these difficult and uncertain times. The forthcoming budget debate is very important and will offer an opportunity to improve the financial management of our Nation.
Best wishes,
Mr. Jamil Changlee
Chairman
Guyana Cooperative Republicans