Ashni Singh deals with debt, I deal with him

Mar 06, 2025 Features / Columnists, The GHK Lall Column

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Hard Truths…

By GHK Lall 

Kaieteur News- To maintain the civil level of these contributions, Dr. Ashni K. Singh is recognized as a Guyanese of considerable education.  Holding to the same standard, it is mindboggling that his education has led to such a conversion of his intelligence.  He claimed it, I accepted it.  An uncivil man, of which there are many in Guyana, would have used perversion and not conversion.

I am who I am. The issue is debt, Guyana’s debt overhang is where the difference widens.  The one doing the honors was the erudite Dr. A.K. Singh.  At the recently concluded Energy Confab, he smartly transformed from what was tantamount to a Russian made machine gun to an American bazooka.  Could have been Chinese, but aw shucks, what does it matter…?

I provide the subtitles of the erstwhile Singh’s posture on Guyana’s debt in my own words.  People borrow.  Private citizens, businesses, governments, they all borrow.  So, what’s the big deal about Guyana’s billions in loans owed to every Tom, Dick, and Harry in the financial world?  The challenge for a simple man is how to be patient and considerate of gentlemen with the erudition of Dr. A.K. Singh.  They should be pardoned for thinking that wearing a suit and soaring oratorically (sleekly anaphorically too) makes them look less shallow than they actually are.

Here is the substance of Dr. Singh’s position on debt, Guyana’s debt: a) everybody with a functioning braincell borrows; b) the 24.3% national debt-to-GDP ratio is inspiring; c) the Oil Fund has enough billions to liquidate the entire external debt; and d) Guyana is on a long-term economic ascent.  On behalf of all Guyanese, I thank Dr. Singh for his singular inputs into the national debt discussion.  I examine them one by one.

People borrow.  Yessir!  Using other people’s money is a practice as old as the oldest bank, or box-hand collected in advance.  Bankers do it.  Borrowers do the same.  My only hang-ups are how much is borrowed and how rapidly.  Recall that oldest saying: borrowing is easy, paying back is what makes bad friends.  So as not to insult the ladies of Guyana, that dreadful ‘B’ word was dropkicked in the context of payback.  What I am saying to Dr. Singh is that often one can borrow too much.  Guyana has borrowed too much, that encouraging ratio properly considered.  That ratio is now put under a small, low intensity microscope.

What pushed up Guyana’s GDP?  Oil, sir.  What is the major contributor [component by far] to Guyana’s stupendous GDP growth?  Asked and answered again: the black blood of Allah, my Lord Ashni.  Warning: though civility is sustained here, our friendship may now get strained.  Oil prices start to falter, then drop like a boulder (or even a brick), and the result is that Guyana’s staggering GDP figures could nosedive.  Since oil has pumped up GDP to such an extent here, any continuing slippage in oil prices will sure as hell deflate Guyana’s GDP in a manner that hurts.  A 10% drop could be managed.  But at US$60-65 or lower a barrel, local GDP starts to buckle.  In a flash, the hearty debt-to-GDP ratio extolled by the minister goes from nice numbers to a nightmarish scenario.  How troubling or punishing depends on how much oil drops and for how long.  Guyanese are crying out today amid countless oil splendors.  With plummeting oil prices and a shrinking GDP, Guyanese may need a blood transfusion.

The honorable minister of money also expounded on the three billion greenbacks held in the Oil Fund.  When that money and the external debt money owed are put next to each other, it is a wash, according to Minister Singh.  The Oil Fund stood at US$3.1 billion at the end of last year, while the total debt was at US$5.9 billion.  Being the cute, slingshot numbers man that he is, Dr. Singh was smooth enough to steer the enraptured foreign section of his audience to external debt (US$2.2 billion).  He even had over a half billion leftover in the kitty.  Now that is sound money management.  If I were a Guyanese company that lent the government money, there is sure to be some apprehension about how my repayment will happen.  Where will the money come from to service (payment of principal and interest) the US$3.7 billion in local debt?  With local debt pushed to a secondary consideration, then local debtors’ operations feel the pinch, their expectations diluted, and their credit lines wobbly.  With less oil income coming in, will outside debt be taken to service local debt?  On what terms?  Or, there will be negotiations for restructuring local debt?

Last, I address Dr. Singh’s point about Guyana being on a ‘sustained economic trajectory.’  Yank the oil cushion (income) from under Guyana, and sustained economic trajectory takes some blows, even a terrible beating.  Check on agriculture and nonoil sectors, and their contributions to local GDP.  Should oil dip, the manufacturing sector shakes, and definitely drops.  In sum, Dr. Singh’s assumptions are too heavily skewed towards boosting the brighter side.  There is that other side, where potential economic menace lurks.  The government itself gave that bell a jingle or two recently.

(Ashni Singh deals with debt, I deal with him)

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• braincell borrows, Dr Ashni K. Singh, GDP growth, hard truths, oldest bank

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