Guyana calls for cap on debt servicing
GUYANA is lobbying for debt servicing by countries reeling under heavy debt burdens to be limited to 10 per cent of export earnings for a fixed period to help boost development. In a plea at a Washington meeting, Ambassador to the Organisation of American States (OAS), Dr Odeen Ishmael said many poor countries continue to service debts with a relatively high proportion of their export earnings. "There is an obvious need to stop this from happening", he said Tuesday. Guyana is among the heavily indebted poor countries and Ishmael said that by agreeing to the cap, "donor countries and institutions will be allowing debt-burdened nations to release more funds into their own economies for their own development." Arrangements can be worked out to determine for how many years this 10 per cent ceiling should be applied, he argued. "The end result is that the debt repayment ceiling will assist the poor countries to boost their development and will be, in a few years down the road, even better able to service debts without placing severe hardships on the social and economic welfare of their peoples", he said. Ishmael, also Guyana's Ambassador to Washington, made his pitch at a meeting of the OAS Committee on Hemispheric Security on the Special Concerns of Small Island States. It is clear that the "stifling debt burden" is a main reason for high rates of poverty in many developing nations, he stated, noting that many countries in Africa and Latin America "are prime examples of such misfortune." He recalled that in 1992 Guyana faced the pressure of debt servicing amounting to roughly 100 per cent of its export earnings and at that time was "rated as the country with the highest indebtedness per capita in the world." An aggressive international campaign since then to win debt relief has seen Guyana's debt down by more than 33 per cent. Ishmael said debt servicing has since dropped to below 50 per cent of export earnings. Guyana is among countries identified by the World Bank for debt relief under the Highly Indebted Poor Countries initiative. The ambassador pointed out that debt reduction means more resources are readily available to be invested in socioeconomic development.
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