Borrowing to steal - A mountain of debt and little to show for it

Borrowing to steal – A mountain of debt and little to show for it

Feb 12, 2013 Letters

Dear Editor,
This is a matter of national importance that Guyanese must turn their attention to, for it will have significant implications for our future generations.
When the PNC left office, the national debt was a staggering US$2.1 billion. At the then exchange rate of G$126, the debt was equivalent to G$263,086M. As of March 31, 2012, the total public debt was US$1.743B or at G$355,580M an exchange rate of G$204 to US$1.
If as Kaieteur News reports, Guyana earned a roughly 75% write-off of the PNC US$2.1 billion debt, then the PPP got write-offs of US$1.575 billion and was left with US $525 million in debt from the PNC. With the debt as of March 2012 at US$1.743 billion, it means the PPP has to March 31, 2012 borrowed US$1.218 billion in 20 years.
Now, the PNC borrowed only around US$1 billion in its 28 years in power. Interest and other penalties accounted for a significant portion of the PNC’s US$2.1 billion debt when it left office, because the PNC was an atrocious and inept financial manager which failed to pay its bills.
Comparing what the PNC did with its US$1 billion borrowed to the PPP’s US$1.218 billion borrowed to date is easy, because both parties focused heavily on spending on major projects and infrastructure.
I know it will cause great consternation to PPP supporters, but the PNC from 1964 to the mid-1970s outclassed the PPP in infrastructural works.
The PNC built much of this country’s infrastructure from the ground up during this period using borrowed money. Much of the nation’s major highways, schools, hospitals, bridges, the MMA, sea defence, etc., were built or substantially upgraded during that period.
The PNC also lost at least US$300 million on the failed Upper Mazaruni hydro project. That is where a lot of the PNC’s debt went. The PPP has borrowed US$1.218 billion in 20 years and what does it have to show for it? It has not built any major new infrastructure entirely, except the Skeldon sugar factory where it spent US$181 million and the stadium. The Berbice Bridge was privately built.
How does a government that built little of infrastructural significance from the start and that has spent its time fixing and patching up infrastructure built by others, borrow US$1 billion in 20 years, when that same government collected the most revenues, VAT and taxes ever collected in Guyana’s history and has benefited from a much improved economy than under the PNC? Patching and fixing is cheaper than building from the start.
Why does a government in this position have to take on so much debt and have nothing to show for it? Because it is to steal…Or in Guyanese parlance, “to thief.”
The PNC did a lot of stealing, but it cannot compare to the scale of the PPP’s larceny. The stealing under the PNC was mostly from the revenues it generated. Most of the PNC’s spending of its debt during its first decade in office was actually money fairly well spent. By contrast, the stealing under the PPP has come heavily from both sources.
The PPP already collects a lot of money from the Guyanese people. Tax revenue alone was US$600 million in 2011 and it keeps growing. That is not even counting the earnings from exports. Why does this government need to borrow so heavily when proper fiscal management using internal resources could reduce the need to borrow so heavily?
Well, foreign loans offer the greatest avenues to steal.
The money is directly controlled by the cabal. The entire process is secretive. To date, there has not been complete public disclosure on many of the deals secretly signed by the PPP.
Money is easily siphoned off by creating false bureaucracies, all manner of side projects and dummy entities. Foreign loans are often not scrutinized by the Auditor General and other internal auditing bodies.
Loans are controlled directly by the political directorate. Kickbacks are easier to acquire under these loans. Borrowing heavily is also a symptom of failure.
The PPP is creating deficits in the economy with cronyism, nepotism and party paramountcy and it is trying to fill those holes by borrowing rather than by doing the right thing and practicing fiscal accountability with lean and clean government. The PPP is leading us down the road to economic destitution.
M. Maxwell

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