Tuesday, October 3, 2023

Guyana gets thumbs-up from CDB for setting up fund to manage oil revenue

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The Caribbean Development Bank (CDB) is applauding Guyana’s efforts to establish a Natural Resources Fund as the South American country prepares for first oil in 2020.

Speaking recently at the Bank’s annual news conference in Bridgetown, Barbados, Director of Economics, Dr. Justin Ram, said it will significantly safeguard the country from the “resource curse.”

He explained further that, “When countries begin to exploit their non-renewable natural resources, they can be a large influx of revenues which we mainly describe as the Dutch disease or the resource curse.”

In this instance, he noted that the influx of revenue can raise inflation rates within the country and make other industries within it uncompetitive, “because they are now competing with the oil sector.”

This is why he believes that Guyana is heading in a positive direction with the establishment of its Natural Resource Fund.

“The proposals surrounding the Natural Resource Fund that suggests that the revenues from oil will, first of all, go into that Fund and then the Government must then apply to utilize those revenues for its various expenditure components should be applauded,” he said.

The Natural Resources Fund Bill of 2018 was passed on January 3, this year, in Guyana’s National Assembly with some minor amendments.

The Bill was presented by Minister of Finance Winston Jordan who noted that a Public Accountability Oversight Committee will be appointed to oversee the management of the Fund.

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