The Government of Guyana will be looking to embark on a fresh round of consultations in the coming year for the establishment of a Sovereign Wealth Fund (SWF) – a move which the political opposition sees as a delay tactic in passing the legislation that would give life to the fund.
The main opposition party; Peoples Progressive Party Civic (PPP/C), believes that the administration is being deliberately slothful in bringing to the National Assembly the legislative instruments for the establishment of the SWF.
The statement was made by Opposition Leader and PPP General Secretary, Bharrat Jagdeo, who voiced his concerns at a hastily pulled together press engagement, following the presentation of the country’s 2018 National Budget to the House on Monday last.
Finance Minister Winston Jordan in presenting the 2018 Budget briefly addressed the issue of the SWF. He told members of the South American Country’s legislative Assembly, the administration will, in the coming year, present a ‘Green Paper’ on the proposal for the SWF in order to seek feedback for further refinement.
The Finance Minister said the Green Paper on the SWF is meant to “stimulate a national discussion to ensure that all citizens understand the benefits to be had and the perils we must guard against in the collection and management of our oil resources.”
Mr. Jagdeo, a former President and Finance Minister, is adamant however, the motives on the part of the administration were not in keeping with good governance, transparency and accountability.
The Opposition Leader told reporters, “I think they do not want the SWF in place because the SWF will restrict their ability to waste and to use the resource wantonly…”
Speaking to reporters in the Committee Room of Parliament buildings minutes after the Finance Minister would have made his nearly four hours long presentation, a visibly livid Jagdeo said, “we got a lecture on the oil industry and how we must spend our resources wisely but we are not going to get the SWF in the form of a legislation before us soon.”
The former president now Opposition Leader said the administration has now adopted a position where it will only now advance a ‘paper’ to discuss some of the initiatives “and ideas that we want in a legislation.”
He posited, “They can easily draft the legislation now and bring it before us – this was a promise made two and a half years ago,” he said, before further accusing the coalition A Partnership for National Unity Alliance for Change (APNU+AFC) administration of employing ‘delaying tactics.’
Minister of Natural Resources, Raphael Trotman told OilNOW in September the government is engaging the World Bank, International Monetary Fund and the Inter-American Development Bank as part of mechanisms being put in place to effectively manage oil revenue.
He said at the time, “The Sovereign Wealth Fund will become the hub, so to speak, for this macroeconomic plan that is coming and it will be written and in place by 2020.”
Guyana will begin earning revenue from day 1 of oil production which is set to begin by mid-2020. At the current market price for oil, the country could be earning close to one million US dollars per day and significantly more after ExxonMobil and its joint venture partners recover their initial investment.