U.S cancels more than $7B of Guyana’s debt
Kaieteur News
June 24, 2004
The US Government formally approved the cancellation of US$35,607,300 (G$7,050,245,400) as a result of the Guyana government’s efforts to provide a more enabling environment for economic growth under the enhanced Heavily Indebted Poor Countries (HIPC) initiative.
After the Boards of the World Bank and International Monetary fund approved Guyana’s completion point of the HIPC process in December of 2003, the Guyana government and its Paris Club creditors reached an agreement on January 14, 2004, on the terms and conditions for the reduction of Guyana’s external debt. The terms and conditions are contained in the Paris Club agreed minute, which provides for a 100 percent reduction of the eligible stock of debt as of December 1, 2003.
Ms. Betty McCutchan, Charge d’ Affaires of the United States Embassy and Mr. Saisnarine Kowlessar, Minister of Finance will sign a bilateral agreement between their governments for the cancellation of debt owed, guaranteed, and insured by the US government, today, at the Ministry of Finance.
The US Government has committed to forgive 100 percent of the relevant principal, including arrears and accrued interest up to December 1, 2003 as identified in the agreement.
This represents US$32,269,000 held by the United States Department of Agriculture PL-480 Food for Progress programme; US$3,338,000 held by the United States Export-Import Bank; and US$300,000 held by the United States Agency for International Development (USAID).
This gift from the American people frees up money in the government of Guyana budget that would be otherwise used to pay down on the debt so that it can be used for key social programmes.
The total amount of US$35 million is equal to almost ten percent of Guyana’s 2004 budget.