Chains around our necks

Nov 02, 2022 Editorial

Kaieteur News – We think that the Opposition AFC is on the right track, but is only half right. This is prompted by the caption “‘PPP borrowing spree chaining our children’s necks to debt’ -AFC says as total debt to increase 8% by year-end” -KN October 31).

Debt is bad, and more debt is worse because it adds more burdens to the already indebted.

And when borrowings come to represent runaway levels, then there is a debt disaster in the making. It does not matter whether it is at the individual or company or governmental level, the only sensible thing that can be said is the more the debt, the more serious is the difficulty that lies ahead when it is time to repay.

The AFC’s position is that our children will be chained to massive debt, a position with which we agree, and stated often. But it is not just future children, for what is being borrowed now impacts all Guyanese today, whether they did or didn’t vote for the PPPC to return to power. Adult Guyanese will be responsible for paying back some of that debt when the debt servicing starts. Though some debt will have to be repaid in the future, some loan repayments start soon, if not right now. So, it is not just the children’s necks that are being chained, but ours also.

This is how present and future citizens are enslaved, so that pet projects and pie-in-the-sky projects and pipedream projects all get funded with borrowings that are occurring today at breakneck speed.

We have repeatedly cautioned against this uninterrupted debt splurge, and the dangers of it. Our recommendation to the PPPC Government that it goes slowly, study carefully and decide more selectively on which projects are a ‘must have’ as opposed to those that can wait for another day. Our well-intended advice continues to fall on deaf ears. Leaving aside the thinking that the massive debt binge facilitates wholesale governmental corruptions, we note the volatile nature of oil prices, and the prolonged slumps that have visited poor, excited Third World countries, when their hysterical leaders are driven into debt frenzies, only for default to rear first its ugly head, and then bite painfully. Nigeria is one of the best poster children for overdoing things with debt, and this is while recognising its immense oil riches. Examine the leaders of Nigeria reduced to their hands and knees in begging for more billions so that they can offer limited relief to their hurting citizens.

Right here, the PPPC Government has thrown all cautions to the wind, while scorning all calls for a more tempered debt approach. There is no project that appeals to the President or one minister or another that can wait, but which just has to be fulfilled now, which means more millions in American dollars must be borrowed. On an almost daily basis, we report in this newspaper of some school, some bridge, some road that strikes the fancy of some minister and for which many millions are borrowed. Because of our oil discoveries, all financial institutions everywhere are rushing to answer the PPPC Government’s debt addictions and demons. No financial institution is saying ‘no’ to Guyana, not with the borrowing gravy train that Guyana has become, and the Government is deliriously cashing in with both fists.

Debt has been, and will continue to be, the curse of impoverished undeveloped countries. Debt is a newer, smoother, and cleaner version of slavery. That is, when it comes due, and there is scrambling around to find the money to repay, except that it is not there. The AFC estimates that Guyana’s debt will increase by 8%, which amounts to approximately another US$250 million more borrowed and owed. Regarding what lasting value the Guyanese people are getting for the billions borrowed in their name, using their oil assets as collateral, the doubts accumulate. What is beyond doubt is that notwithstanding all the oil money received (and withdrawn), all the debts taken out, rank-and-file Guyanese are still to experience the prosperity that everyone believes should be theirs. The same could be said for their struggles, and this is considering the glittering economic forecasts and the new debts taken out.

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