Pres Ali traces Guyana’s long climb out of debt
– from more than 900% of GDP when the PPP/C took office in 1992 to below 30% today
Successive PPP/C Governments tackled the inherited debt crisis through economic reforms, restructuring, international debt relief and sustained growth—moving Guyana from default and severe indebtedness to a fundamentally stronger economic position.
In fact, in 1988, Guyana could pay for less than a week of imports. It owed more than four times what its whole economy produced in a year, and it had stopped paying its creditors.
President Dr Mohamed Irfaan Ali went back to that point on Monday evening to explain how the country got there, and how it got out.
He called it an effort to bring “facts” to a public conversation he believes has been distorted.
“Our creditworthiness was at its lowest. No one wanted to lend us money. We were defaulting on every payment,” the president said in a video statement posted on his official social media page before adding, “We did not have the revenue coming in to even match the minimum payment. That was a crisis.”
A crisis made by policy, not inherited
The president was clear that the debt did not come with independence. Guyana entered 1966 without the crushing burden it would carry two decades later, he said. That, in his view, makes it a story about choices.
“Governments are important. Leadership is important,” he said, stating that, “Because they pursue economic policies that can destroy us or take us forward.”
Between 1971 and 1976, the state nationalised bauxite, sugar and other major businesses. The public sector grew to about two-thirds of the economy.
“The difficulty was not nationalisation by itself,” President Ali said.
The problem was the combination of loss-making state enterprises, falling productivity and dependence on a handful of exports.
The country borrowed to keep those enterprises and imports going. As production fell and the Guyana dollar weakened, foreign debt swelled relative to the economy.
From 1976 to 1988 income per person fell by 31 per cent, inflation rose eightfold and government debt climbed from 31 per cent to 475 per cent of GDP.
By 1989, external debt alone stood at roughly 276 per cent of GDP.
Earning relief, not receiving it
The Desmond Hoyte Administration’s Economic Recovery Programme began repairing ties with the International Monetary Fund (IMF), World Bank and other lenders in 1989.
Still, when the People’s Progressive Party/Civic (PPP/C) Administration took office in 1992, total public debt sat at 623 per cent of GDP. Even after rescheduling, debt payments were taking about 42 per cent of government revenue in 1996.
Guyana then became an early entrant into the IMF–World Bank Heavily Indebted Poor Countries (HIPC) Initiative.
“This did not happen by accident,” the president said. He credited a government that convinced lenders it would spend prudently, invest in social services and open itself to international scrutiny.
In 1999, that earned Guyana about US$410 million in debt service relief. A further US$334.5 million in net present value terms followed in 2003, after a second HIPC round.
The relief came with conditions including an IMF-backed programme, a poverty reduction strategy, tax and procurement reform, tighter budget and debt management and measurable gains in health, education and governance
“This is long before oil”, President Ali stressed. He pointed out that the money freed from debt payments, about 3.5 per cent of GDP a year, went into schools, health and poverty programmes.
In 2006 and 2007, the IMF, World Bank and Inter-American Development Bank wrote off about US$611 million more, including US$470 million from the IDB.
Public debt, at around 186 per cent of GDP in 2003, fell to 65 per cent by 2009 and about 48 per cent by 2015.
What it bought
President Ali singled out 1999 to 2011, under then President Dr Bharrat Jagdeo, as the period of the PPP/C’s “greatest success.”
He noted the economy grew a cumulative 35.3 per cent over those years, with average growth near 4.4 per cent from 2006 to 2011.
He linked that stretch to the country’s steadiest political period.
The social results followed. Primary school enrolment stayed above 95 per cent and immunisation coverage passed 90 per cent.
Child mortality and malnutrition declined, and extreme poverty fell to 18.6 per cent by 2006.
HIV treatment also expanded during these years, he noted, at a time when the government had to find large resources to respond to the epidemic.
The oil era, and a warning
Oil has since pushed the numbers further. Public debt fell from 47.4 per cent of GDP in 2020 to 24.3 per cent in 2024.
The IMF’s 2025 assessment now rates Guyana at low risk of debt distress, improved from moderate in 2023.
It projects debt will level off near 25 per cent of GDP through 2034.
That standing, President Ali said, opens doors to financing from lenders such as US EXIM, UK Export Finance and Qatari investment funds.
But he closed with a caution. “We cannot be complacent,” President Ali said, explaining that, “The immediate threat is no longer insolvency.”
The challenge now, he said, is keeping fast-rising investment manageable and making sure Guyana’s productivity grows along with its wealth.
