and also more traditional western bilateral donors.Based on these developments

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…but challenge remains to upkeep sustainability in volatile global economy – Finance MinisterBy: Kiana Wilburg Under the careful management of the coalition administration, Guyana has been able to continue onFinance Minister, Winston Jordanthe path of having a stable debt profile.This is according to Finance Minister Winston Jordan. The economist made this and other pertinent statements in his historic Annual Public Debt Report. The document is the first of its kind in Guyana. The report presents an overview of debt developments during the last five-year period (2011 to 2015).Jordan said that the compilation of this inaugural Annual Report on the Public Debt for Guyana, clearly demonstrates the deserved and prominent place which debt-related issues have been given in the Government’s strategic agenda for the development of Guyana.The Finance Minister said that the report also represents an important step to ensuring institutional transparency and accountability.In addition to this, he said that it demonstrates the administration’s intention to lead through proactive action, so as to improve Guyana’s performance in sovereign debt management and, by extension, the overall quality of governance.The Finance Minister said that for the fiscal year 2014 to 2015, Guyana’s total debt, as a percentage of Gross Domestic Product (GDP), has declined. Jordan said that it has moved from 51.9 percent at the end of 2014 to 48.6 percent of GDP at the end of 2015.With this reduction, the Finance Minister said that Guyana’s debt profile continues to remain stable and sustainable over the medium-term.The economist said that noteworthy is the fact that Guyana is now faced with the challenge of maintaining debt sustainability in a volatile and uncertain global economy.The Finance Minister said that in 2015, Guyana’s economy, perhaps for the first time in recent history, found itself in a precarious situation where most of the country’s key agricultural commodities, including sugar, rice, and forestry, faced headwinds.He said that the slowdown in the global economy, combined with the loss of preferential markets, negatively affected demand for these produce.Jordan said that even remittances, on which so many citizens depend, were a victim of the slowdown in the world economy. With this in mind, the Finance Minister said it is obvious that the nation’s excessive reliance on these sources of foreign exchange will continue to expose the economy to volatile external developments, thereby making it more susceptible to external shocks.The Finance Minister said, “Our recent Debt Sustainability Analysis indicates that Guyana will remain vulnerable to external shocks. Commodity price fluctuations have added to the volatility of our export earnings and tax revenues, and have also affected the financial performance of state-owned agricultural enterprises.”The economist said that borrowing has also become more uncertain, with the recent increases in Guyana’s income. He said that this has far-reaching implications for the terms at which Guyana can access financing.“As a result of our higher GDP, concessional lending will become scarcer. To access affordable financing, Guyana has sought alternative funding sources, especially from our South-South partners such as EXIM Bank of China, EXIM Bank of India, the Mexican Agency for International Cooperation and Development, and the Islamic Development Bank,” the Finance Minister expressed.At the same time, the Finance Minister said that the administration was able to maintain close ties with multilateral agencies, including the World Bank, Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB), and also more traditional western bilateral donors.Based on these developments, Jordan said that Guyana’s debt portfolio and the risks associated with it are becoming more complicated.He said, “It thus becomes a policy imperative for us to strengthen the institutional framework for public debt management, including establishing a sound and modernized legal framework for debt management and implementing a comprehensive medium-term debt strategy that is not only cost- but risk-focused.”The Finance Minister said that managing operational risk has also been assigned much higher priority in ensuring effective debt management operations.In addition, the Government he said must continue to invest in a consistent capacity building plan to develop the skill-set necessary in understanding public debt management, and implementing a comprehensive debt strategy.To remedy some of the challenges facing the Debt Management Division (DMD), and supporting our national development, Jordan said that the Government is committed to building a comprehensive plan to develop the skill-set required to understanding public debt linkages. He said that there are at least six main areas where Guyana hopes to improve its debt management capacity. He listed these areas to be; institutional and legal frameworks, debt strategy formulation, self-assessment, operational risk management and debt negotiations.In this regard, he said that a major thrust expected in 2017 is a modern consolidated Debt Management Act.Jordan said, “The Government keeps in mind that good public debt management builds a strong public finance infrastructure that supports our national development.”He added, “Strong public finance infrastructure fosters macroeconomic stability, which is the cornerstone for the achievement and sustainability of a ‘good life’ for all.”As such, the Finance Minister said that these developments seek to usher in a new era in public debt management that will entrench and promote prudent and sound debt management practices with the aim of enhancing efficiency and improving accountability and transparency.