Moments after Finance Minister, Winston Jordan took a breath from presenting an almost five hours long 2019 budget speech, Opposition leader Dr Bharrat Jagdeo took the opportunity to blast the coalition Government for failing to address key matters, such as the management of the Sovereign Wealth Fund (SWF), which is intended to safeguard proceeds from the oil and gas sector.
Jagdeo explained on Monday evening following the presentation of the budget at Parliament Building that the incumbent Administration has failed to address and put measures in place for the proper management of the SWF, as he believes it should be managed by a non-political body, rather than government.
He explained, “We argued for a non-political, an apolitical type of model that insulates the management of the funds from politicians (and) the politicians get involved only when based on a formula that is in enshrined in our laws and an independent verification that the conditions of that formula are met, is presented, then that comes to the National Assembly and a release of funds is made to the budget to spend based on the budgeting prerogatives of whoever is in power, the Minister of Finance in this case would have a full prerogative to program those funds”.
Jagdeo argued that Jordan did not at any point in time address those issues but in fact comforted the nation by saying that a Department of Energy has been set up to manage the sector and experts would be hired to “talk”.
According to the Leader of the Opposition, the Government has made the very promise a long time back and the budget failed to bring new ideas to the forefront for the benefit of the country at large.
Jagdeo was keen to point out quite a number of avenues in which the administration failed, and pointed to job provision as a major area. He argued, “He (Jordan) has not moved the conversation forward on any count whatsoever, not on transparency issues, not on the model enshrined in the Green Paper, not on the oversight issues, not on the terms of reference between the petroleum commission and the Energy Department, the overlap there, not on the issue of bidding for new contracts, none of the those issues were elucidated”.
Nonetheless, Executive Director of the Guyana Chamber of Commerce and Industry (GCCI), Richard Rambarran gave his take on the matter of the SWF, saying that the Industry believes a lot more is yet to be done to the Green Paper.
Rambarran pointed out that he believes there are at least 10 areas of the Green Paper which ought to be sorted out before the document actually becomes legislation.
“I found that there were a number of areas where… a lot more work could have been done…I think that as a Green Paper we need to look at it a little bit more and understand the dynamics and the workings and how we are going to integrate oil into this economy and utilize the Sovereign Wealth Fund for the maintenance of a stable macroeconomic environment,” the Director shared.
He noted that among the 10 areas that deserve urgent attention by the Government are, “The composition of the macroeconomic committee, the nature of the Sovereign Investment Committee (and) we have a couple of others in that it conflicts with laws in terms of the constitution”.
The representative who spoke with this publication after the budget presentation also alluded to the fact that monies that are to be expended from the SWF depends on the mechanisms of the government, which leaves little room for reform or improvement to the current institutions in Financial Management.
Rambarran questioned, “Do we have things on fiscal deficit rules, do we have things on the rate of revenue expenditure, do we have rules concerning the rate of expenditure growth, do we have balanced budget rules? Those are some of the areas in the public financial management framework where the Sovereign Wealth Fund is so critical (and) those things are critically lacking”.
Chartered Accountant Christopher Ram had also raised concerns over Finance Minister, Winston Jordan’s position as a spender and saver of Guyana’s wealth, given that he will be in charge of the SWF. Ram noted that under the previous administration the very matter would have drawn the attention of the serving Coalition Government.
In a subsequent interview with this publication, Ram sought to point out the need for transparency in the sector.
He recommended the SWF be entirely isolated from the “spending Ministry” as it could have an impact on everyone.
Ram also pointed to the need for an “entrenched article” in the constitution so that no one, including Ministers, would be able to access those funds, as he described it as a generational fund for the future.