Govt. to inject US$1M into IDB Multilateral Investment Fund

May 06, 2017 News

The government will be contributing US$1M to the replenishment of the Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF). This was announced by Minister of State Joseph Harmon at the post cabinet

Minister of State, Joseph Harmon

press briefing on Thursday.
He said that this contribution will be paid in three or four instalments beginning in 2019. Harmon said that the Multilateral Investment Fund was created in 1992 to augment the resources available to the IDB for project financing.
“Since its inception, Guyana has contributed US$950,000 and has received US$9.84M for every dollar that was invested in the fund and this will continue to operate up to 2018. It is expected that Guyana will continue to benefit from allocations.”
The Minister of State said that the main areas of focus for the fund include climate smart agriculture and developing environmental and social sustainability.”
Following the withdrawal of the United States of America from the Fund earlier this year, it was believed that Guyana would have been affected.
The adverse effect from the USA pull-out was foreseen by former Auditor General Anand Goolsarran.
He said that such a situation would pave the way for an opportunity. Goolsarran said that for years Guyana has been running a budget deficit.
He told this publication that every year Guyanese would celebrate the fact that the country has the biggest budget. According to the former Auditor General, little do Guyanese realise that the country is living with borrowed money and hence beyond its means.
Goolsarran believes that it is time that Guyana introduces austerity measures aimed at securing a more balanced budget.
“As a minimum, we need to scale back on foreign borrowings. Countries such as Canada and the UK do not borrow to finance infrastructure works.”
However, Minister of Finance, Winston Jordan had ensured that Guyana would not be adversely affected. The Minister had told Kaieteur News that three other donor countries have stepped up to fill the gap that the USA’s departure would have caused.
He stated specifically that Japan has stepped in and together with increased pledges from Latin and Central America, MIF 3 is fully subscribed. The Minister also said that Guyana’s ability to borrow from the fund will not be affected.
The Fund was an initiative of former President of the USA, George H.W. Bush. The USA has historically been the largest donor to the fund. Last October, the IDB governors had agreed to provide an additional US$300M to keep the fund running from 2019 to 2023.

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