Newly elected President of Guyana, Dr. Irfaan Ali, says he will be looking to ensure that robust systems are in place for the management of oil revenue so that benefits to current and future generations are maximized even before his government looks to draw down from the resources being accrued in the Federal Reserve Bank of New York.
“First of all, we have to put the mechanism in place. We have to ensure we have robust laws. We have to have robust management systems,” the President said in an interview with local online news service News Room. “We have to have the right governance structure before we think about touching the resources and we have to have that Sovereign Wealth Fund well thought out, one that acts in the immediate needs of our country while at the same time safeguarding the future generations.”
The bill for the Sovereign Wealth Fund, known in Guyana as the Natural Resources Fund, was passed in the country’s National Assembly in January 2019. Since that time, an account has been set up in the United States to receive the proceeds of oil sales and royalty, which to date exceed US$98 million.
President Ali said it is important that the wealth fund reflects the urgent needs of Guyana and operates in a way that safeguards resources for the future, emphasizing that, “political overreach must be removed” in terms of the fund itself and management of the sector.
The new Guyanese head of state said development of an investment and policy pathway that takes the entire oil and gas industry into account with emphasis on developing local capacity will be a top priority of the new administration.
“We can’t develop a pathway for the oil and gas sector without also simultaneously developing a pathway for our private sector to enhance themselves and our private sector to restructure themselves to be part of that pathway,” President Ali stated.
Guyana became an oil producer in December 2019. Output is expected to exceed 1 million barrels per day by the end of the decade, potentially making it the third largest oil producer in Latin America and the Caribbean and the largest oil producing country per capita in the world.