The absence of budget oversight is among the reasons for the European Union (EU) withholding $5.8 billion (€25 million) in funds due to Guyana for sea defence and the sugar sector, the EU mission in Guyana said yesterday, drawing a sharp response from the government who accused it of “misinformation.”
“The latest partial payments related to these two programmes have been temporarily put on hold until all eligibility criteria, inter alia budget oversight, are satisfactorily address-ed,” the EU Delegation in Guyana said in a statement. One of the functions of the National Assembly is oversight of the budget. The Assembly was prorogued by President Donald Ramotar on November 10, 2014 and it remains suspended.
The EU’s statement followed recent charges by government officials that the EU was in a conspiracy with the United Kingdom to deny the funds to Guyana. On Monday, Finance Minister Dr Ashni Singh said that while the EU has approved €25 million in budgetary support, no funds have been received as yet. Singh said “no credible reasons” were given as to why the EU had not made the payment to the government. Instead, Singh said, there have been “spurious” reasons, but there was no indication prior that the EU would be withholding any funds.
In its statement yesterday, the EU said that it has a long standing commitment to support development and poverty reduction in Guyana. It noted that last year, €34 million was allocated to Guyana under the 11th European Development Fund. EU aid is channelled through different modalities. Budget support is one of them. According to the statement, the EU has two on-going budget support programmes in Guyana, one for the sugar sector (€28.9 million) and one for sea defences (€ 4.8 million).
The latest partial payments related to these two programmes have been temporarily put on hold until all eligibility criteria, among which is budget oversight, are satisfactorily addressed, the EU said.
The EU statement drew a sharp response from the government, which in a statement last evening, expressed concern. The government released an email from the EU mission, dated September 8, 2014, which it said indicated that Guyana had met the eligibility criteria required to qualify for disbursements totalling €25,858,025. The EU mission had also recommended disbursement of this sum to the EU Budget Support Steering Commit-tee in Brussels, which was due to meet on September 17, 2014, the government statement noted.
The email released by government was sent by Ewout Sandker to Singh and the EU official said that the Delegation had submitted a positive disbursement advice to its Headquarters with regard to identified budget support tranches. “If I am not mistaken it is the first time that the budget support disbursement requests for Guyana have been submitted this early in the second semester, maximizing the chances for payments within the budgetary year (as they are always subject to availability of payment credits). I believe this is illustrative for the good cooperation between your office, the line Ministries involved and the Delegation, for which I would like to express my appreciation,” the EU official wrote.
“In light of the Delegation’s attached written confirmation of Guyana’s qualification for disbursements totalling €25,858,025, the Delegation might now wish to correct the misinformation contained in the press release it issued earlier,” the government statement said. It also called on the EU to explain to Guyanese what exactly accounts for the failure to disburse the sums since September 8, 2014, “especially bearing in mind that Parliament was not prorogued until November 10, 2014.”
Last week Luncheon lashed out at both the EU and the British High Commission accusing both parties of conspiring to dishonour the longstanding budgetary support agreement between the EU and the Government of Guyana.
UK High Commissioner Andrew Ayre had previously held a press briefing in which he stated that the suspension of Parliament here was a violation of the Commonwealth Charter and aid could be affected. “Without a parliament there is no parliamentary oversight of development assistance…clearly the appetite to send money to a country that has no parliamentary oversight is much reduced,” he had said.
Subsequently, Luncheon described Ayre as “terribly dishonourable,” and went on to refer to the “recent EU dishonouring” of its agreement with the Government of Guyana in relation to budgetary support. The Cabinet Secretary accused the British High Commissioner of “sinisterly and conspiratorially” revealing the handiwork of the UK and EU in the matter, and told reporters that the threat to withhold development aid was “most dastardly.”
