Introduction
Today’s column continues to advance my overall assessment/evaluation of Guyana’s Green Paper, which proposes to establish a Natural Resources Fund (NRF) next year. Last week’s column had made two observations, which are, by a distance, the most important from the perspective of an overall assessment/evaluation.
To recall briefly, the first was that the NRF represents state-owned capital, generated from the export of Guyana’s natural resources. The NRF, however, like similar sovereign funds, is designed to operate within a universe of private investors, responding to private risk-return incentives in global markets. The second observation was that in order to survive in global markets, such state investments have to be organised in a manner that avoids challenging the dominance of ruling private risk-return incentives in these markets. Both these observations apply, de rigeur, due to the sheer current size of such state-owned funds (US$8.1 trillion total, of which natural resource-based funds are US$4.4 trillion or 54 percent).