… Or pile up more debts before it leaves office
The Alliance For Change (AFC) is pressing for answers from Minister of Finance, Dr. Ashni Singh to questions relating to what the party says is the drastic decline in international reserves within the last two years.
AFC Vice-Chairman, Moses Nagamootoo told the media recently that credible reports have revealed that Guyana’s reserves fell from US$835M in 2012 to US$609M by November 2014, representing a decline of US$226 million. He asked then and his Party is asking now “where did this money go?”
Dr. Singh had an opportunity to answer this question at his most recent press conference, held last week. But on that occasion Dr. Singh chose not answer the question directly. Instead, he spoke about the general causes that would lead to a drop in international reserves.
The Minister told the media that reserves often fluctuate based on the exporting commodity price.
“When your export commodity prices are strong, you have a stronger potential of having a stronger current account balance and as a result a healthy reserve.”
The Finance Minister added that similarly, when the prices are coming down, it would have an effect on the reserve. Dr. Singh had pointed to the fallen gold prices and said that that may have had an influence, but asserted that “our external reserves remain adequate enough to meet external obligations.”
Pressed to address directly, AFC’s concerns or perception that government is dipping into the reserves, he said, “I am not in the habit of addressing capricious perceptions.”
Yesterday, the AFC issued a statement saying that the Party has noticed and noted the fact that Dr. Singh dodged the question “where did the money go?”
AFC is contending that the fact that the country’s reserves are dipping, speaks to troubles in the economy.
Its statement read “The Finance Minister in 2008, 2009, 2010, 2011, 2012 budgets, boasted that his budgets were crafted in the context of improving the international reserves. So what happened to his budgets of 2013 and 2014, were they not similarly crafted? The pertinent question remains unanswered – Where did the money go? Were the Reserves drained to keep the Guyana dollar floating? Is there capital flight? Or, is the economy in real trouble?”
The AFC said that it has been advised that since 2012, the collective losses in export revenues from three of Guyana’s main industries–sugar, bauxite and gold–amounted to some G$65 billion. ”Using the Bank of Guyana figures, these three industries exported some G$203 billion in products in 2012 to the international markets. In 2014 that figure was G$138 billion. The decline is arithmetic, not PhD economics!”
The party called on the Minister to desist from trying to pull wool over the eyes of the Guyanese people. It said that the unfortunate reality is the fact that the economy has been mismanaged. “This is the biggest failure of the PPP administration. Apart from the evident joblessness and pervasive, extreme poverty, everyone saw the decline.”
The AFC reminded that Dr. Singh had, in 2008, disclosed that Government has placed “high priority on actively promoting accelerated diversification of the economy”.
“But after six years of hard guava seasons, government has little to show for the much vaunted diversification – except, perhaps, the people’s monies being diverted in failed schemes, and pockets already lined with gold.
Rather than investing in proper value added projects in sugar, bauxite and gold, the Jagdeo-Ramotar outfits invested over G$100 billion in a handful of failed projects. Today, not one of them is delivering the dividends promised – Skeldon Sugar Factory – producing sugar at twice the cost of the old sugar factory that they scrapped; next, the ICT cable project – dead on arrival some five years after the first piece of cable was laid.”
The AFC also pointed to the Specialty Hospital, where the contractor “escaped with some $900 million; “’the Fip Motilall fiasco, the Marriott hotel and casino. And, so the story goes.”
The Party stated categorically that it rejects the “self-serving assurance” given by Minister Singh that “our external reserves remain adequate enough to meet external obligations and they are strong.”
“The AFC needs solid assurance that the PPP regime would not further run-down our international reserves; nor pile up more debts before it leaves office”
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