Sunday, February 5, 2023

President Ali assures wealth fund operations will face House scrutiny in new law

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Guyana’s President Dr. Mohamed Irfaan Ali said that a new Natural Resource Fund Bill tabled last Thursday would allow full parliamentary scrutiny of the operations of the sovereign wealth fund.

The President gave this assurance during an event in Palmyra Berbice, after finding his government on the receiving end of criticism from a section of the local press about the new legislation.

The Government proposed the establishment of a Board of Directors in the Bill, which it says is necessary to provide regular management and oversight. The government has argued that the powers vested in the Board would create a new dispensation that prevents political overreach into the operations of the Fund. The current Act, Guyana’s finance minister Dr. Ashni Singh has said, gives his office too much control.

Critics worry that under the new Bill, the Fund would open itself to similar political control, since the Board of Directors would be appointed by the President himself.

“Everything in that Bill will have Parliamentary oversight because the spending will have parliamentary oversight,” Dr. Ali said. The new Bill proposes that the House will have to vote to approve any withdrawal, whether it is a regular annual withdrawal or for emergency financing in the case of a major natural disaster. The House would also be tasked with nominating a member to the managing Board of Directors, and to the Public Accountability and Oversight Committee responsible for providing non-governmental oversight.

However, the House is government controlled.

President Ali baulked at the distrust, arguing that when the people went to the polls last year, they placed their confidence in his administration to manage the country.

“Are you saying that after the people have placed that confidence that we don’t have the right, or we can’t be trusted to name people on a board?” Dr. Ali asked.

The Government also found itself in defence of its proposed rule for determining a ceiling on annual withdrawals from the Fund. The finance minister had argued that the current withdrawal rule is too complex and rigid, and that the new rule would make it easy for the public to understand. But one section of the media accused the government last Friday of planning to empty the Fund despite promising careful expenditure.

The country’s finance ministry in a statement last Friday said there is an immediate need for transformative investments, and that the first year of the life of the Fund, as an exception, presents pressing development needs which should be financed by the country’s resources, instead of debt. It said the Bill promotes prudent management of Guyana’s natural resources, for the benefit of both present and future generations.

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