Stakeholders in Guyana want the Government to do more to educate the populace on the benefits and operationalization of the Sovereign Wealth fund, also known as the Natural Resource Fund.
This was one of the main highlights at a panel discussion organized by the Guyana Manufacturing and Services Association (GMSA) to examine the management of future petroleum revenues and the establishment of a fiscal rule and a Sovereign Wealth Fund (SWF) in Guyana. . The event was held on Thursday, September 13 at the Pegasus Hotel in Georgetown.
Those on the panel included, Trade Unionist, Lincoln Lewis, Consultant and University of Guyana Lecturer, Carol Webster, Chartered Accountant & Attorney At Law, Christopher Ram and CEO of Institute of Private Enterprise Development (IPED), Mr. Ramesh Persaud.
In examining the Green Paper on the Sovereign Wealth Fund, Lewis asked, “Where are the people in the fund?”
He believes that Guyanese must be properly and adequately consulted on the development of the fund, which he notes is an area that was lacking when the Green Paper to establish the fund was presented and reviewed. “This fund has to be tied to a developmental plan. Not a plan made by any party who enters Government. It has to be made by the people and there must be a shared view on that,” he said.
A similar view was shared by Christopher Ram, who asked, “Where is the Government inviting persons to the consultations?” He also believes that the Guyanese people are not being properly consulted in the process. In the same breath, he challenged the Government to do much more.
“Not a single piece of legislation has been crafted on oil since 2015 when the first discovery was made,” he pointed out.
President of the GMSA, Shyam Nokta, in joining the call for the Government to be more open to discussions on the fund, questioned, “How ready are we for first oil?”
He believes that how the Government plans to use the revenues from oil as well as its management are very critical to the overall development of the economy. The GMSA President aslo emphasized the need for such a fund to be in place as early as possible, especially since the country is less than two years away from first oil.
Speaking specifically on the Green Paper, he said, “There should be a broader discussion to shape this paper.”
Director of Budget, Sonya Roopnauth, in explaining the Government’s position on the Green Paper said it was merely intended to outline the framework for the management of the fund.
She added that the SWF will be created with three objectives in mind. These are; Stabilization, Inter-generational savings and domestic spending on developmental priorities.
She said, “The Fund will be setup in such a way to ensure value for money. People should know where the money is going and reports will be made available in Parliament and online. Transparency and accountability are paramount in this process.”
As part of the creation of the fund, a macroeconomic committee will be one of the mechanisms used to oversee its management.
Roopnauth underscored that, “The macroeconomic committee is not simply a set of people we plan to appoint. They will require at least ten years of experience in applied macroeconomics and a minimum of a post-graduate degree in economics and a legal expert appointed by the Minister. It will not be named simply by a political head.”
A sovereign investment committee will also be established with the responsibility to advise the Minister of Finance on investments.
In addition, she said, “The ministry then prepares an investment mandate and the Bank of Guyana then executes that investment mandate and in this process, the Bank appoints private managers to manage part of the balance in the fund through a competitive process.”
She assured that the Government is trying to put systems – legislative and otherwise – in place to avoid manipulation.
The Green Paper on the Sovereign Wealth Fund was tabled in the National Assembly on August 8 and the Government has already indicated that it intends to lay the requisite legislation before the end of the year.