“Highly Sustainable” Is Not a Licence for Fiscal Evasion
“Highly Sustainable” Is Not a Licence for Fiscal Evasion
OPINION BY: Hem Kumar– August 2026
T he Inter-American Development Bank has delivered the Government of Guyana a headline it will no doubt repeat with satisfaction: Guyana’s debt remains “highly sustainable.” But that phrase must not be allowed to become a political shield, a substitute for disclosure, or an excuse to avoid scrutiny of where the country’s oil wealth is going.
The IDB report does not describe a country in a debt crisis. It does, however, document a country in which public debt increased, the external share of that debt rose, capital expenditure lost relative weight, and improved fiscal performance depended substantially on withdrawals from petroleum profits. Those are not trivial matters. They are precisely the facts that require the closest public examination in an oil-rich state.
A debt ratio that remains manageable is not proof that fiscal policy is prudent. It merely means Guyana still possesses room to make mistakes. The question is whether the Government is using that room to build a productive, resilient, and equitable country—or to establish recurrent spending habits, subsidy arrangements, and discretionary distribution networks that will become politically difficult and fiscally costly to unwind.
The comforting headline
According to the IDB, Guyana’s debt-to-GDP ratio increased from 24.3 percent in 2024 to 28.6 percent in 2025. The Bank nevertheless concludes that overall debt remains “highly sustainable.”
No responsible commentator should distort that finding. A 28.6 percent debt ratio is not, by regional standards, an alarming figure. Guyana is not Barbados at the height of its debt distress; it is not Jamaica before its prolonged fiscal adjustment; it is not a state trapped beneath an unsustainable mountain of obligations.
But neither should the Government distort the opposite point. Guyana’s debt ratio rose by 4.3 percentage points in one year. That is not a meaningless movement. It is an increase taking place during an era of exceptional oil receipts, unprecedented access to petroleum revenues, and repeated government assurances that the country is enjoying an economic transformation unlike anything in its history.
The public is therefore entitled to ask a basic question: if the country is receiving vast and growing oil income, why is its debt burden rising at the same time?
The answer may be legitimate. Large-scale infrastructure can require borrowing before its economic returns are realized. Development needs are real. Roads, bridges, energy systems, drainage, hospitals, schools, ports, housing, and climate-resilient works cannot all wait. Borrowing itself is not mismanagement.
But debt must always be judged by purpose, terms, transparency, and results—not by whether an international institution has concluded that the Government can still afford it.
“Highly sustainable” is not a certificate of fiscal virtue. It is not an audit clearance. It is not a declaration that every dollar borrowed, withdrawn, transferred, subsidised, or spent has been properly prioritized
.A changing spending pattern
The most revealing aspect of the IDB’s analysis is not its reassuring conclusion. It is the changing composition of expenditure beneath that conclusion.
The report records that capital expenditure, while still substantial, fell as a proportion of total expenditure—from 53.8 percent in 2024 to 50.7 percent in 2025. It also fell as a share of GDP, from 11.5 percent to 10.2 percent. The IDB identifies this as the first decline in Guyana’s capital-expenditure ratios since oil production began.
This point must be handled honestly. The figures do not prove that capital spending collapsed. Nor do they establish that every dollar no longer reflected in the capital ratio was redirected into cash grants. Such claims would be simplistic and vulnerable to rebuttal.
The more important point is this: the Government’s expenditure mix changed.
At the very moment when capital expenditure lost relative weight, total expenditure continued to rise. The IDB attributes part of that increase to higher transfer payments, including transfers associated with the universal cash grants. It also reports that the improved fiscal result depended on a larger increase in revenues, notably non-tax revenues and oil-profit withdrawals.
This means Guyana’s fiscal position is no longer explained merely by the familiar formula of oil money being converted into roads, buildings, bridges, and other physical assets. Increasingly, the national accounts must be examined for what is occurring outside the headline capital programme: transfers, subsidies, utility support, sectoral assistance, state-enterprise financing, arrears, guarantees, concessions, and other recurrent or quasi-recurrent obligations.
That is where the public’s right to know becomes urgent.
The subsidy question cannot remain hidden
A subsidy is not a magic word. It is public money, foregone revenue, or a cost absorbed by the state on behalf of another person, company, class of consumers, or institution.
It may be justified. Low-income households may need relief from electricity costs. Farmers may need assistance during genuine shocks. Vulnerable communities may require targeted support. Strategic industries may warrant narrowly defined, performance-based assistance where a clear public benefit exists.
But none of that excuses secrecy.
Every subsidy should be capable of answering four straightforward questions: who received it; how much was received; under what published criteria was it granted; and what measurable public benefit resulted?
Where electricity support is concerned, the public must be able to see the complete picture. What is the total fiscal cost? How much of the support benefits ordinary households? How much is absorbed through the operations of the public utility? How much benefits commercial or industrial consumers? Are there special arrangements, concessionary rates, connection support, arrears treatment, or other relief measures for selected firms, sectors, or communities?
And, most importantly, are these governed by transparent national rules—or by discretion exercised behind closed doors?
It is not enough for the Government to announce “relief.” Relief for whom? At whose cost? Under what conditions? For how long? And why?Without that information, the public cannot distinguish legitimate social policy from a structure of selective state favour.
Oil withdrawals demand a higher standard
The IDB notes that the stronger revenue performance in 2025 was driven substantially by non-tax revenues, including withdrawals of oil profits. That fact deserves far more scrutiny than it will receive from the Government’s propagandists.
Petroleum revenue is not ordinary revenue in the same sense as income tax, value-added tax, customs duties, or business taxes. It is the monetisation of a finite national asset. Every withdrawal represents a decision to convert part of Guyana’s irreplaceable oil wealth into present-day expenditure.
That decision may be defensible. But it must be defended.
The Government cannot simply point to an improved fiscal outcome and expect applause because oil withdrawals made the books look stronger. The real question is what those withdrawals purchased for the country.
Did they create durable public assets? Did they build infrastructure that will lower production costs, improve competitiveness, reduce vulnerability to flooding and climate shocks, expand access to quality health and education, and deliver long-term returns?
Or did they fund growing recurrent commitments that will require ever larger annual injections—subsidies, transfers, utility shortfalls, politically convenient programmes, and expanding expectations that the state must continually distribute what should have been conserved, invested, or transparently allocated?
A country can squander immense wealth without ever technically defaulting on a loan. Fiscal sustainability is not the only test of responsible government. Intergenerational fairness is also a test. Transparency is a test. Value for money is a test. Equal treatment is a test.
External debt is not a footnote
The IDB further reports that external debt increased to 56.3 percent of Guyana’s total debt stock. This cannot be brushed aside merely because the overall debt ratio remains manageable.
External borrowing brings exposure to foreign creditors, repayment schedules, currencies, interest rates, procurement arrangements, project-delivery risks, and future budgetary obligations. It is not necessarily reckless. Indeed, concessional external financing can be sensible where it funds economically sound projects with clearly established returns.
But the burden is on the Government to show the public the full terms.
◊ Which creditors account for the increase in external debt?
◊ What are the interest rates, grace periods, maturities, and currency risks?
◊Which projects received the financing?
◊What has actually been disbursed?
◊What has been completed? What remains stalled?
◊ What is the projected return on each major investment?
◊ How much borrowed money is tied to projects, and how much is being absorbed by entities or programs with weak public reporting?
These are not hostile questions. They are the minimum questions a serious democracy asks of a government entrusted with extraordinary wealth and unprecedented borrowing power.
Sustainability is not stewardship
The IDB’s report should be read as a warning against complacency, not as a permission slip for fiscal self-congratulation.
Guyana may be able to carry more debt than many Caribbean countries because petroleum income has transformed the country’s revenue outlook. But that very advantage creates a danger. A government with abundant revenues can conceal poor choices longer than a government living under strict fiscal constraint.
Oil wealth can mask inefficiency. It can postpone accountability. It can permit projects to be over-priced, subsidies to become permanent, state entities to evade discipline, and political preferences to be dressed up as development policy.
That is why the standard must be higher, not lower.
The central issue is not whether Guyana can continue borrowing. The IDB believes it can. The central issue is whether Guyana is building a transparent fiscal system in which every withdrawal from oil wealth, every expansion of debt, every subsidy, every transfer, and every state-supported benefit can withstand public scrutiny.
The Government must publish a complete and intelligible breakdown for 2024 through 2026 of transfers, subsidies, electricity-related support, assistance to state entities, beneficiary categories, regional allocations, sectoral programmes, and recurrent expenditures financed directly or indirectly from petroleum revenues.
It must show the people not merely that debt is sustainable, but that their wealth is being used sustainably.
Because a nation can survive a 28.6 percent debt ratio. What it cannot easily survive is a political culture in which “highly sustainable” becomes the official euphemism for: do not ask where the money went.
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