![](\"http:\/\/www.petroleumworld.com\/images2021\/guyana_finance_ministry_600.jpg\")
Ministry of Finance seal<\/p>\n\n\n\n
GMF
Ministry of Finance seal<\/p>\n\n\n\n
By Guyana Times<\/p>\n\n\n\n
GEORGETOWN
Petroleumworld 11 22 2021
With US$534 million presently sitting in Guyana\u2019s Natural Resource Fund (NRF), in the Federal Reserve Bank of New York, USA, the PPP\/C Government has maintained its decision not to spend Guyana\u2019s oil money until the provisions governing the management of the Fund are amended.
In an article published by the Department of Public Information (DPI), the Government has given several reasons for not tapping into the NRF. First, the PPP\/C Government has always held that the NRF Act was passed during a period when the Government in power was illegitimate.
On December 21, 2018, the former APNU\/AFC Administration was defeated in the National Assembly by a No-Confidence Motion. From all indications, the then Administration should have cut its losses from the month prior and started preparing for the election of a new Government.
Yet, one month later, the Government moved to pass its NRF Bill through Parliament, while the Parliamentary Opposition abstained from the House, in protest of the then Government\u2019s defiance of the No-Confidence vote.
Finance Minister, Dr Ashni Singh in a recent statement said, \u201cThis is the single most important piece of legislation to have been enacted in many years, and the APNU\/AFC Government saw nothing wrong with sneaking it through Parliament at a time when they had lost their mandate to govern, when they were widely regarded as an illegal and illegitimate Government, and without any Opposition input whatsoever\u201d.
The PPP\/C had committed to replacing the Act once the political uncertainty ended through the swearing-in of a new, democratically-elected Government. Moreover, it was not only the uncertainty of the circumstances under which the Act was passed that made it troublesome. It was also its contents.
Responding to Former Finance Minister Winston Jordan\u2019s recent statements about the NRF Act in the letter pages of Stabroek News, Dr Singh pointed out a key criticism of its configuration, by Guyana\u2019s development partner, the Inter-American Development Bank (IDB). The Bank published a report entitled \u201cEconomic Institutions for a Resilient Caribbean\u201d which includes a detailed assessment of Guyana\u2019s NRF (pages 268-274).
In outlining options for reform, the IDB stated, \u201cThe objectives and design of the NRF raise several issues. The fund on its own cannot achieve the objectives that have been set for it\u201d.
The fund\u2019s stated objectives are stabilisation, competitiveness, saving and development. The IDB stated that these objectives transcend what the NRF\u2019s operations can achieve. \u201cThe rigid withdrawal rules may do little to foster stabilisation or saving but may entail fiscal costs,\u201d the Bank stated.
\u201cThe formula for the maximum permissible withdrawal is among the most complex operational
rules for a resource fund in the world. Its design departs from good practices.\u201d
\u201cState-of-the-art advice based on international experience and good fiscal management principles emphasises simplicity, flexibility, transparency, and close integration with the budget and public asset-liability management,\u201d the IDB stated.
Put simply, for the purpose of accountability, the IDB\u2019s position is that the formula guiding maximum withdrawals should be simple enough for an outsider to read and comprehend, and that unnecessary complexity would be an affront to transparency and public understanding.
Dr Singh said, \u201cThe irrefutable fact of the matter is that the NRF Act in its current formulation was a piece of legislation which was very poorly conceived, and was \u2018rammed down the throats\u2019 of the nation during a period when the APNU\/AFC was in a state of illegality and illegitimacy\u201d.
Vice President Dr Bharrat Jagdeo has also said that, in its current configuration, he believes the Act is not insulated from political manoeuvring. Hence, the Act must be amended.
In addition, President, Dr Irfaan Ali has said the legislation will be laid in Parliament before the year ends. Only recently, Vice President Jagdeo stated that the Government will make public a comprehensive plan for the spending of Guyana\u2019s oil money, with priority areas such as infrastructure and social upliftment, including investments in education and healthcare.
He had explained that the proposed projects will go through a process of accountability, requiring the scrutiny and approval of the National Assembly. Further, the Government intends to allow Guyana\u2019s oil money to accrue in the NRF, as current periodic deposits from the sale of Guyana\u2019s crude are not significant.
In the years to come, when ExxonMobil operationalises more development projects, steeply ramping up production, the fund will see a corresponding increase in inflows.
In the meantime, the Government will ensure it maximises Guyana\u2019s earnings from the oil and gas industry, in accordance with its deals with oil companies.
Even though the oil money is not being spent, positive transformations in Guyana\u2019s economy have already begun. While the oil and gas industry is a helpful catalyst, it is the Government\u2019s business-friendly policies that have commanded the confidence of international investors, and prudent management which has made relief available for the most vulnerable in times of economic hardship. (DPI)
<\/p>\n\n\n\n
_____________<\/p>\n\n\n\n
By Guyana times <\/strong><\/a><\/em><\/strong><\/a><\/em><\/a><\/em><\/p>\n\n\n\n Copyright \u00a91999-2021 Petroleumworld or respective author or news agency. All rights reserved.<\/p>\n\n\n\n Petroleumworld.com Copyright \u00a92021 Petroleumworld.<\/p>\n","protected":false},"excerpt":{"rendered":" GMFMinistry of Finance seal By Guyana Times GEORGETOWNPetroleumworld 11 22 2021 With US$534 million presently sitting in Guyana\u2019s Natural Resource Fund (NRF), in the Federal Reserve Bank of New York, USA, the PPP\/C Government has maintained its decision not to spend Guyana\u2019s oil money until the provisions governing the management of the Fund are amended. …<\/p>\n
guyanatimes.com<\/a> 11 22 2021<\/a><\/p>\n\n\n\n