The Ministry of Finance last night said that the Natural Resource Fund (NRF) Bill 2021 tabled in Parliament on Thursday will allow for greater accountability and transparency in the management of Guyana’s oil resources and it rejected criticisms of it contained in a Page One Comment in yesterday’s edition of Stabroek News.
In the statement, the ministry said that “The spirit and letter of NRF Bill 2021 promotes prudent management of our natural resource wealth for the benefit of both present and future generations. The proposed bill sets ceilings on withdrawals from the fund in every year except the first, specifically to secure savings for the future. However, the immediate need for sound and transformative investments in order to advantageously position our economy to ensure that the benefits from the oil and gas sector redounds towards the wider economy and all Guyanese. The solitary exception of the first year of the life of the fund takes into account the pressing development needs which must be financed, and instead of turning to the more costly option of borrowing from creditors, we can utilize our own resources for the betterment of our people”.
The Page One Comment in Stabroek News had said: “Not only is this bill, the Natural Resource Fund Bill 2021 a coruscating example of the mountain having laboured to produce a dud, its toxicity is insidious. In part it seeks to replace oversight of the Fund by a “Board of Directors” which clearly will be handpicked by the PPP/C from among its followers and handmaidens in the private sector and elsewhere. The configuration proposed will ensconce the country’s earnings from oil and gas in the laps of a select few of the PPP/C’s adherents.
“As had been suspected by many, the PPP/C government has talked a lot but openness, transparency and unity but its hypocrisy is off the charts. Having said it will not seek political and ministerial control of the Fund, in its current form it does exactly that with this bill. Having said that it will be careful in expenditure of oil monies it plans to empty the fund in the first year of its operation”.
The ministry said that the Page One Comment and a separate news article in the same edition “astonishingly express concern about the fact that the Government will be able to choose all of the members of the Board of Directors of the Natural Resource Fund. In doing so, the article conveniently chooses to ignore the fact that the previous NRF Act, which was rammed down the throats of the Guyanese people by the APNU+AFC dictatorship after they had already lost the no-confidence motion, did not even make provision for a Board of Directors. Instead, in the absence of any provision for a Board of Directors, the APNU+AFC model for the NRF was a one-man autocratic show comprising the Minister of Finance as the sole and all-powerful authority, exercising full and absolute control over the Fund”.
The ministry said that under the APNU+AFC model, the “omnipotent Minister had exclusive power for the overall management of the Fund, including preparation and approval of its Investment Mandate, preparation of the operational agreement with the Bank of Guyana, as well as determination of the economically sustainable amount and the fiscally sustainable amount that can be withdrawn from the Fund. Bizarrely, the authors of the SN page 1 comment and article do not appear to have any difficulties with this ministerial autocracy that was established by the APNU+AFC under their NRF model, but they astonishingly have a difficulty with the PPP/C model that removes the Minister of Finance from that one-man show and introduces a Board that includes private sector representation as well as a nominee of the National Assembly”.
In an invited comment last night Stabroek News Editor-in-Chief Anand Persaud said that the author of the ministry press release appeared ignorant of the several editorials that had appeared in the newspaper criticizing the APNU+AFC’s version of the bill and the ministerial powers contained therein.
He adverted to the August 13, 2018 editorial in the newspaper on the Green Paper which had introduced the NRF.
The editorial stated: “Commonsense would have told anyone ensconced in the Ministry of the Presidency and the Ministry of Finance that having the Ministry of Finance be responsible for the overall management of the Fund is completely unacceptable. In its explication of the Green Paper the Ministry of Finance listed an impressive series of advisors: the Commonwealth Secretariat, the International Monetary Fund, the World Bank and the Inter-American Development Bank and others unnamed. One can only assume that the Guyana Government soundly rejected the advice of these advisors on who should be in charge of what will be styled the Natural Resource Fund (NRF) or that these institutions cancelled out each other in the advice department”.
That editorial went on to state: “The deep political and ethnic polarisation that Guyana has been steeped for its post-Independence history, the lack of trust in governments, the undermining of independent minds and institutions by the political directorate, the pall of mismanagement and corruption that has characterised government, the risk of party paramountcy and the tendency for pork barrel spending all make the Ministry of Finance of this or any other government unsuited to the task of overall management of the NRF. The model presented in the Green Paper must be banished from the outset”.
Furthermore, following the passage of the bill on January 3rd, 2019, the newspaper editorialized on it on January 14, 2019 and maintained its criticism of ministerial powers.
“These sentiments remain and have been heightened in the aftermath of the December 21st motion of no confidence which has deepened divisions around all matters. In this insalubrious environment, the NRF bill has been passed and will not have the confidence of both sides of the political divide.
“While in other jurisdictions, where institutions and political maturity are well established, it is perfectly reasonable for the Finance Ministry and the Central Bank to have these significant roles, in the Guyana of today, this is not the case. Both the Ministry of Finance and the Central Bank are prone to political interference and machinations”, the editorial had stated.
The Ministry of Finance statement last night said that the Page One Comment “also insinuates negativity around the withdrawal rule proposed by the PPP/C’s Bill, without taking account of the ironic fact that, at least under the PPP/C withdrawal rule the author of the SN article is able to calculate how much will be transferred, whereas under the APNU+AFC withdrawal rule the world is in the dark as to exactly how much will be withdrawn”.
Persaud said that the only concern raised by the newspaper in the comment was that the fund would be completely emptied in its first year of operation, an unfathomable occurrence.
The ministry further argued that its proposed Board of Directors would remove the excessive powers of the minister and “be responsible for reviewing and approving the policies of the Fund and monitoring its performance, thereby completely separating the management of the Fund from the Minister responsible for Finance.”
The Ministry said that it therefore fails to see how Stabroek News could “presumptuously conclude” that the key policy matters would be exclusively in the purview of the PPP/C administration.
The Ministry of Finance added that it is baffled as to why the newspaper would conclude once more that the government chooses all members of the NRF Board.
Persaud noted that the Ministry’s statement did not address the silence in the bill as to who will choose the directors and the method. He said the directors to be chosen could well end up being ciphers of the government and therefore create artificial separation from the ministry. Persaud said that oversight of this pivotal fund has to be accomplished via independent persons of high repute whether from here or abroad.
The ministry said that another erroneous statement made by the Stabroek News in its report is that “The Board of Directors would replace the 22-member Committee in the APNU+AFC version of the NRF which was assented to by former President David Granger”.
Persaud said that in the APNU+AFC version of the bill it was this 22-person committee that was intended to perform the functions of the Board of Directors in the PPP/C’s version.
The ministry statement last night said that the 22-member Public Accountability and Oversight Committee has been replaced by a 9-member Committee which is more “practical, realistic, administratively more efficient, and would provide non-governmental oversight of the fund. In comparison, the APNU+AFC 22 member committee was designed to be cumbersome and non-functional”.
The ministry also contended that the mechanism to withdraw funds outlined in the NRF Bill 2021 removes the complexities and hindrances to achieving the fund’s objectives by providing a simpler, more transparent formula for calculating the ceiling on annual withdrawals.
Persaud said that neither the APNU+AFC’s version nor the PPP/C’s is acceptable and the people of the country could not afford to have stewardship of the fund only in the hands of the current government and its allies.
