Vice President Bharrat Jagdeo has justified the Government’s move to increase the country’s debt ceiling and for borrowing large sums from multi-lateral agencies to fund government projects.

Addressing a press conference this afternoon, Mr. Jagdeo said the government’s borrowing strategy is one which will be focusing heavily on investment for the country.

“So, you borrow to invest, if you borrow to eat, its bad, if you borrow to invest and the investment in the future will increase your income or save you expenditure like the gas-to-energy project, well, then it’s a good investment it enhances the investment of the country and improves people lives,” the Vice President.

Against that backdrop, Mr. Jagdeo was asked whether the country will be burdened in the future to repay the debts since there has been a spike in global interest rates over the last few years. The Vice President said the global rise in interest rates for debts has not affected Guyana because the country’s loans are fixed interest loans.

“We made it clear what our borrowing will focus on, and our borrowing will focus on the capital projects…like the $US660M from the Exim bank that will come in and that even we raised the debt ceiling to the level that it would be raised, it doesn’t mean that we have to borrow up to that level, it is just to give us room should we have to do so,” Mr. Jagdeo stated.

He also said that a smaller share of the country’s revenue is going towards debts, and so in that light the debts are sustainable.

But further than that, the VP said should there be a shortfall in revenues at anytime , the Government can still sustain its debts because many of the projects to be funded are not recurring projects. 

“So, when the road is built its done, so we don’t to make that expenditure in the following year, same for the bridge and the power plant. SO that is one way of ensuring that we don’t become like a Venezuela, or many of the other countries, what many of them did was to splurge on the recurring budget, so when the shortfall of revenue came about—and inevitably that would happen, they could not sustain those exposes in the long run,” Mr. Jagdeo said.

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