Kuwait cancels almost US$51 million of Guyana’s debt

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By Ray Chickrie
Caribbean News Now contributor

GEORGETOWN, Guyana – In a sign of growing ties between Guyana and Kuwait, and a significant accomplishment for the minister of finance, Winston Jordan, his team and Guyana’s ambassador in Kuwait, Dr Shamir Ally, the state of Kuwait has cancelled almost US$51 million of Guyana’s debt to that country.

A bilateral debt settlement agreement was signed by Jordan, on March 18, 2019, with Kuwait, through the Kuwait Investment Authority, which agreed to cancel US$50,739,255.67 of Guyana’s debt to that country.

This debt cancellation will reduce Guyana’s external debt and allow the country to expand its development agenda, as funds saved under this agreement would be allocated to social projects within the context of the national budget, the finance ministry said in a press statement.

“The agreement, which came after an ardent negotiation process, paves the way for greater cooperation and the strengthening of cordial ties between the two countries.”

Jordan, Donna Marie Yearwood, head of debt management at the finance ministry, and David Patterson, minister of public infrastructure travelled to Kuwait in September 2018, where negotiations entered a crucial stage. Ambassador Ally and his spouse, Dr Maryann Ally then continued to garner support in Kuwait utilising their strong relationship with the people and government of Kuwait to make the debt write off a priority.

Commenting on the agreement, Jordan said that it is the result of renewed efforts by his ministry to engage Guyana’s non-Paris club bilateral creditors in negotiating debt relief that is acceptable and sustainable.

The remaining amount of US$26,853,585.23 will be settled through a combination of cash payments, to be made over nine years, and a debt swap arrangement, which will be worked out in due course.

Guyana’s debt to Kuwait originated from a loan deposit, contracted in 1975, from the Central Bank of Kuwait for Kuwaiti Dinars 3 million (US$10.3 million at that time), for the balance of payments to the Bank of Guyana. The debt accumulated massive arrears over the past four decades, at high market interest rates. As of December 31, 2017, the debt to Kuwait had grown to US$77,592,840.90, comprising principal arrears of US$9,940,500 and interest arrears of US$67,652,340.90.

The finance minister is now working to pursue debt relief from other bilateral non-Paris club creditors like Libya.

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