Urgency of Sovereign Wealth Fund cannot be understated – US Ambassador

Perry Holloway, United States Ambassador to Guyana

United States Ambassador to Guyana Perry Holloway says the establishment of a revenue and investment framework that effectively manages the expected windfall from oil production is of vital importance if the South American country is to be truly transformed.

Writing in an Op-Ed published by the Embassy on March 13, the Ambassador said the development model the country chooses will need to be a decision Guyanese make together through a process of public consultations and legislative debate.

“I want to emphasize that, as Guyana considers its future, it will not be enough simply to have a “rainy day fund” or even an investment fund, but to institute a revenue and investment framework that protects and effectively leverages wealth to transform the nation,” he said.

The chief US diplomat in Guyana said it is his hoped that conversations will continue that would ensure the implementation of a strong comprehensive Sovereign Wealth Fund bill that is “transparent, independent, inviolable, and non-partisan.”

Authorities in Guyana have said the draft Sovereign Wealth Fund legislation, which has since been renamed the Natural Resources Fund, has benefitted from extensive comments by a number of Guyana’s multilateral and bilateral partners. “It has been scrutinized by the Commonwealth Secretariat, it has been scrutinized by the International Monetary Fund, the World Bank and I believe the Inter-American Development Bank,” Natural Resources Minister, Raphael Trotman told reporters in January.

The US Ambassador pointed out that simply having a ‘rainy day fund’ is not enough but urged Guyana to institute a revenue and investment framework that protects and effectively leverages wealth to transform the nation.

“Let us be clear.  When I speak of a sovereign wealth fund, I am talking about a fund that will immediately begin to invest in education, health, infrastructure, agriculture, and security.  I am referring to a concerted effort by all stakeholders to start a continuous conversation on how best to implement fiscal plans that directly address the needs of all Guyanese now,” the Ambassador stated.

Mr. Holloway further emphasized; “The urgency cannot be understated.  Difficult decisions are ahead, whether that involves identifying the right talent to manage the fund (wherever it is found), or even making the difficult decision to borrow at concessional rates that will not be available tomorrow to develop the present.  However, the investment today will pay off tomorrow.”

Whether the country is ready or not he said, the world is ready for it to become not only a petroleum producer, but also a future example of what is possible with technological innovation, hardworking people, political vision, and an appropriate legislative and regulatory framework.  “Guyana has already exhibited hard work, innovation, and vision to get to this point in the development of the industry.  Now, Guyana can show the world that it is possible to get a legal framework right, even when many other countries have not.  Too much is at stake, and decisions, albeit measured and well-considered, must lead to decisive action in the implementation of a fund.  I know I am optimistic about Guyana’s potential success and so is the world, the Ambassador said.

“In writing this, I do not intend to imply that work is not being done to develop a sovereign wealth fund.  In fact, I strongly commend the Government of Guyana for working on a draft bill and preparing to have a fund in place by 2020,” he added.

Mr. Trotman has said he is optimistic that the Bill would be tabled before the end of the first quarter of 2018 in the South American country’s National Assembly.