Dollars for distress

Dec 30, 2020 Editorial

Kaieteur News – Open the papers and everyday it is more of the same news: millions borrowed from over there, and more millions taken from those in other places and institutions, all too willing to feed what is now a habit of the PPP/C government. Incidentally, those millions are in United States dollars, which we remind our fellow Guyanese represent tens of billions in Guyana dollars and almost all borrowed.

This means that when this borrowing binge is over (if it ever is) we are going to owe a lot, have to pay tens of millions in interest alone, and repay principal for decades to come.
This bingeing habit, more of an addiction when all loans are counted, adds up, at a recent count, to a staggering US$180M in the span of mere months. When governments borrow recklessly and lavishly, it is the taxpayers, who are saddled with the painful responsibility of paying back. We say painful, because it means more taxes or less spending on routine social services, through chipping away at areas considered less exciting. What is also alarming is that ordinary Guyanese seem to be taken in by the flurry of costly projects – all dazzling, all needed at the same time, which is now – and without any indication of what these borrowings can inflict on this country and the backs of its citizens. Though good sense should prevail, and the reactions be otherwise, few appear to care.
It sure has been a time to turn the head, and with the borrowed money rushing in from all corners, there is both excitement and consternation. The excitements drown out the concerns. It is drink with abandon (borrow) today, and the hangover – agonizing, costly, crippling – will be dealt with tomorrow. There will be time to get around to that later. So, it is drink up today, and so the billions come with tinkle and jingle.
Every day is Christmas in oil-rich, oil-mad Guyana. The PPP/C government benefits from a perfect storm of events, which provides its sharp leaders with even more perfect coverings to race down this borrowing expressway.
There is the COVID-19 pandemic, with nothing better than that as justification for borrowing and spending to get things back on track. There is considerable validity to such assertions by government; yet there seems to be some degree of excess involved, given borrowing levels. Some loans have been gone through faster than a consuming wildfire, with more applied for to keep the money spigot flowing. There will be hell to pay later when the piper comes calling – many of them to collect what is due.
Another rationalizing smartly utilized for the spurts of borrowings is the damage inflicted by our unending elections delays. Again, there is some truth to that contention. But again, while that serves as a powerful jolt of electricity for easily agitated supporters, elections delays as rationale for such extensive borrowings is taking things too far, which the PPP/C government knows very well cannot be readily challenged because of the many major mistakes made by the Coalition during those devastating elections delays.
It is the equivalent of heaping blame on the dead, which is in no position to counter-argue. It is just too many loans taken, which leaves most Guyanese unmoved, since the majority is guilty of thinking that future oil revenues will offset. Though we hope and wish for the opposite, complacent Guyanese could be in for a rude awakening because of miscalculations.
For there is a place in Africa that serves as a reminder of how things can go bad, and at the worst possible time. This was what KN reported in an article titled, “Oil-rich South Sudan trapped in dangerous cycle of debt” (KN December 20).
Anti-corruption watchdog Global Witness pointed out: “Oil dollars are used to pay off old loans while new loans fund the budget…the government risks selling South Sudan’s future to pay for today.”
Wise words, indeed, and words of caution that should alert all Guyanese of the need for prudence in borrowing.
Moreover, government spending priorities and corruption eat away at such loans, while many languish in poverty. Guyana has been there before under both the PNCR and the PPP/C, which is what hangs over the head of this nation. Guyanese beware: these extravagant borrowing can come back to haunt, and especially when misused, which we have had with every government.

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