US Ambassador wealth fund comments “misinformed” – Finance Ministry

Winston Jordon, Guyana's Minister of Finance

Guyana’s Ministry of Finance describes as “misinformed” some of the views expressed in an Op-Ed written by US Ambassador to the South American country, Perry Holloway, which called for prioritization of a Sovereign Wealth Fund (SWF).

In a statement on Wednesday, the Ministry said while it appreciates the spirit of the opinion piece expressed by the Ambassador, it “wishes to make clear that the establishment of a Sovereign Wealth Fund (SWF) is already designated priority for the Government of the Co-operative Republic of Guyana (GCRG). We would also like to emphasise that it is the government and people of Guyana who will decide on the tenets of the SWF.”

Writing in the March 13 Op-Ed, Mr. Holloway said, “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.”

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.”

While he went on to emphasize that the urgency of such a mechanism being put in place cannot be understated, 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.”

But the Ministry of Finance, in its response to the Op-Ed, said the Ambassador give the impression that not much progress is being made in this regard.

“The suggestions contained in the Op-ed may give the impression that the GCRG and, by extension, the Ministry of Finance, under whose remit the drafting of the legislation for the SWF falls, has not made significant progress on this important piece of legislation. That impression is misinformed,” the Ministry said.

Consequently, the Ministry said it wishes to the opportunity to remind Guyanese and other stakeholders that the foundation for the establishment of the SWF began since 2016. “This was announced more than a year ago at the opening of Guyana’s National Seminar on Preparing for First Oil, which was facilitated by Chatham House,” the Ministry pointed out.

At that forum, the Minister of Finance made clear the Government’s intention to develop a Fund to govern the use of petroleum resources as a key legislative priority, the Ministry said in its statement, and went on to list several such objectives.

These include;

  1. Advancing critical development and investment needs within the country (via the national budget);
  2. Addressing issues of stabilisation of the economy, and
  3. Ensuring savings were made to guarantee inter-generational benefits from the extraction of this finite natural resource.

“Those objectives reflect a comprehensive framework that will guide the prudent management of future oil revenues for the benefit of current and future generations, in keeping with the government’s agenda,” the Ministry of Finance said.

The statement added that the establishment of such a Fund is not immediately necessary, but rather, it demonstrates the government’s commitment to good governance, transparency and accountability, by ensuring that a legislative framework is in place to safeguard our national patrimony, prior to the commencement of oil production.