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Reply to "They got the govt they deserve."

A financial crisis is looming in the banking sector. The people got the govt they deserved, good thing pnc won.

Guyanese failure to repay loans skyrockets by 36%

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…rise of bad debts a salient feature of financial crisis – former AFC exec

The Guyana economy has been in freefall post 2015 and the plummeting ability of its citizenry to repay loans to banks and similar institutions now threatens even more bankruptcy in companies, especially small businesses – a salient feature of a financial crisis.
This is the stark warning of former Alliance For Change (AFC) Executive Sasenarine Singh, who in a recent analysis found that Non-Performing Loans – commonly called bad debts – “have multiplied by some 36 per cent, since the (David) Granger Administration came to power”.

Sasenarine Singh
For Change AFC Executive Sasenarine Singh

According to Singh, “In simple language, the size of the bad debt portfolio is clearly going in the wrong direction.”

Suffering
The former AFC Executive, in a letter to the editor, posits: “After a relatively calm decade, the Guyanese banking system is suffering under (Finance) Minister Winston Jordan.”

Finance Minister Winston Jordan
Finance Minister
Winston Jordan

On the matter of the declining ability of Guyanese to repay their debts, Singh deduced from information supplied by the Finance Ministry and the Bank of Guyana that bad debt in the local banking sector have moved from 8.3 per cent of all loans in June 2015 (at the end of the PPP’s tenure) to 11.3 per cent in September 2016.
“I was reliably advised that at the end of 2016, the rate of bad debt is now some 11.5 per cent of the total loan portfolio…This data clearly indicates the predictable adverse economic trajectory.”
He has since posited that the rise of bad debts was a salient feature of a financial crisis and suggested that “for the banks, delays in debt repayment make obtaining further credit more difficult, which often leads to a second round of debt default and even more bankruptcy in companies, especially small businesses”.
He suggested that any sensible banking leader plagued with a high stock of bad debt was likely to focus on internal consolidation and improving asset quality rather than providing new credit.

Ruling elite
According to Singh, “any serious Government would have done some strategising around this issue from day one, but it is now clear that the life of ordinary people has little meaning for the ruling elite in the Granger Government.”
Singh suggests that from its public actions, the ruling A Partnership for National Unity, Alliance For Change (APNU/AFC) coalition has reduced the most complex issues into sweeping political generalities which resulted in regular people suffering because of the intellectual deficit in the Granger Administration.
Taking a swipe at Finance Minister Jordan, Singh recalled that with three successive budgets, he “has not once but twice proven to be one big amusing entertainer who does not have the awareness of the needs of the economy to be able to deliver the required policy actions to get Guyana back on track”.
Singh is of the view “this mentality of taxing a flat economic cake, frustrating the productive sectors and spending recklessly on projects like the D’Urban Park parade ground is clearly an intellectually bankrupt economic strategy”.
He opined that Jordan’s “saving grace is hoping for oil before 2020…But that is exactly that  ‘hope’, because oil will not flow until 2021/2022 at the earliest based on information I saw”.
Singh’s publicly stated position comes on the heels of statements made in a recent interview with Guyana Times by Economic Adviser to the Opposition Leader, Dr Peter Ramsaroop, who had also warned of imminent dire economic straits as a result of policies being pursued by the current Administration.

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