“Guyana will be one of the few countries to have a Sovereign Wealth Fund (SWF) in place before ‘First Oil’”. So observed Minister of Finance, Mr. Winston Jordan, after President David Granger had assented to the legislation establishing the Guyana’s Natural Resource Fund (NRF) (Ch 29/03/2019). Not so long ago, this column observed that establishing SWFs ‘is akin to establishing an airline in the 1960s and a stock exchange in the 1990s – signs of modernization and must-have institutions’ (01/05/2019). However, it may be useful to note that Norway, whose SWF has become the model for many others, found oil in 1969 and only established its fund in 1990. What is much more important are the investment and other policies that are adopted by the government and how politically accountable the fund will be. As to investments, the article mentioned above noted that Norway ‘only began saving abroad when it was no longer profitable for it to do so internally and generally, the focus for poor natural resource rich countries should be to invest in capacity building in both the private and public sector for them to be able invest well domestically.’
But the statement by the minister was not what caused me to smile and decide to write this article. On the same occasion he emphasised that ‘The Act is very strict about the withdrawal of funds, accountability and so on, are very, very tight and praised by a number of experts in the field … (but) the proof of the pudding will always be in the eating.’ I believe that the minister and his experts have been over enthusiastic because they failed to properly differentiate between the existence of rules and the possibility of their being effective in the extant context. Or – although I doubt it – like scores of others, they have a very restrictive and weak notion of political accountability, i.e. that it only entails being able to question and openly criticise political, public and other agents. Thus, this column is concerned with democratic political accountability; for without it SWFs become vulnerable to all manner of corrupt practices and managerial effectiveness in general is weak.
According to one creditable account with which I agree, (https://www.idea.int/sites/ default/files /publications/democratic-accountability-in-service-delivery.pdf) democratic accountability or holding public officials accountable is essential to the democratic process: it is the means by which directly or indirectly people are able to voice their concerns, demand explanations and impose sanctions upon public officials. All political systems, even autocratic regimes, have a level of accountability but in a democracy (which Guyana claims to be), no public official is exempt. Accountability relates to both the outcome and the process and entails a relationship between citizens and their representatives and public officials who have a duty to fulfill the mandate given them by the former, or be sanctioned for being unable to adequately explain their failure to accomplish the given task.
The delivery of a public service is a complex policy process that includes agenda setting, policy making and implementation. Who sets the agenda is of fundamental importance in any country and usually it comes from the political establishment as a result of elections promises, private sector interventions, international commitments and so on. Policymaking is about deciding upon the correct policy option and in a democracy it entails compromises between politicians from different political parties, inputs from the state bureaucracy, the private sector, trade unions, non-governmental organisations, and other groups with an interest in policy outcomes. Implementation begins when the government gives some public and/or private agency the responsibility for translating policy into action and for delivering the service in question. However, ultimately it is the government that is accountable for effectively and efficiently delivering the required service.
Democratic accountability is said to be based on three fundamental principles: answerability, responsiveness and enforceability. ‘Answerability gauges the extent to which a government carries out its duty to explain and justify its decisions to the public.’ Responsiveness is about whether public officials take opportunities to consult citizens or their representatives before a policy or law is approved, so that the content of such decisions reflects their views. ‘To a large extent, the political incentives for governments to remain responsive to citizens are linked to the nature of the party system, the electoral rules and other institutional arrangements.’ Enforceability is importantly about the formal or informal consequences that public officials and politicians may face. ‘The possibility of enforcing positive or negative consequences tends to contribute to improving accountability.’ An array of contextual conditions affect how accountability mechanisms work. ‘A parliament’s ability and space to hold the executive to account depends, for example, on the power balance and dynamics within parliament and between parliament, the executive and the judiciary’(Ibid).
The Natural Resource Fund Act is clear; the natural resource wealth of Guyana is to be managed in an effective and efficient manner for present and future generations. And there is a Public Accountability and Oversight Committee (PAOC) responsible for monitoring and evaluating whether government and others are complying with the law and that the fund is managed in accordance with the principles of transparency, good governance and international best practices. After consultations, the president appoints the members of the PAOC and can also remove them and the minister of finance is responsible for the overall management of the fund. However, let us put aside the secondary quarrel about the overarching political nature of the fund’s governance for even if of some substance, this has perennially been the concern of all opposition parties when not in government.
What is much more important is that this entire law is rooted in a democratic accountability framework that is operational in Guyana only in the restrictive sense. True, generally our governments are usually willing to explain and justify their decisions to the public, but as the issue of the oil and gas negotiations demonstrates, rarely have politicians had to answer for their negative behaviour. Again, governments usually consult but as consultations over this very NRF suggest, such discourses usually end in controversy with stakeholders claiming that their views were only marginally reflected in the actual law.
The point is, laws alone are insufficient to ensure democratic accountability: ultimately it is about the informal and formal consequences that politicians and public officials must face if they do not comply. Such consequences cannot properly flow from autocratic regimes that are rooted in electoral manipulation, ethnic voting and so forth. In Guyana, an admixture of these has contributed to longevity in government, weak separation of powers and decades-long political unaccountability, and the case currently before the Caribbean Court of Justice suggests that there is no end in sight. What this means is that regardless of the rules, in a competitive political environment with little accountability the policies of the NRF will most likely be aligned with the views of those in whom the regime has confidence and the outcomes biased towards those upon whom it wishes to bestow favours.
