…recommends “restraint when pronouncing on Guyana’s national priorities”
The Ministry of Finance has taken umbrage to the recent opinion editorial written by Unites States Ambassador to Guyana Perry L. Holloway calling for priority and more so public consultations to be given in the establishment of a Sovereign Wealth Fund (SWF) to manage the revenues expected from Guyana’s oil production.
In a statement the Finance Ministry on Wednesday outlined that while the they appreciate the spirit of the opinion piece, “we would also like to emphasise that it is the government and people of Guyana who will decide on the tenets of the SWF.”
Government said as a new oil producing nation, Guyana is ahead of many countries, having already taken the initiative to establish a fund of this kind.
“This of course does not mean 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,” the statement said.
While Government said it values the comments from bilateral and multilateral partners on the draft content of the SWF, and welcomes further engagement and support, it noted, they would “recommend that our partners exercise restraint when pronouncing on Guyana’s national priorities, and to refrain from making premature statements on its petroleum resource management, given the existing challenges of managing expectations and avoiding the Dutch Disease,” referring to the Ambassador’s comments.
Ambassador Holloway on Wednesday insisted that the establishment of a revenue and investment fund was necessary if Guyana is interested in effectively managing the windfall and monies that will flow from the oil and gas sector which should be utilised to boost the country’s overall growth and development.
The diplomat explained that Guyanese will ultimately have to make decisions on the type of development model they wish to have in place as he warned that a “rainy day fund” was simply not enough to secure the country’s future transformation.
Ambassador Holloway also expressed the view that as conversations and discussions continue about what needs to be done to properly manage the oil and gas sector, it was important that the SWF which is being proposed by the David Granger Administration remain “independent, nonpartisan, transparent and inviolable”.
He also explained that the fund would realise investments in education, health, infrastructure, agriculture, and security as he stressed that its urgency cannot be understated.
According to him, difficult decisions are ahead whether that involves identifying the right talent to manage the fund or even making the difficult decision to borrow at concessional rates that will not be available tomorrow to develop the present. However, he noted that the investment today will pay off tomorrow.
But the Government said that the suggestions contained in the Op-Ed may have given the impression that the Government and, by extension, the Finance Ministry, under whose remit the drafting of the legislation for the SWF falls, has not made significant progress on this important piece of legislation.