Today’s State of the Climate report is a dismal litany of humanity’s failure to tackle climate disruption. The global energy system is broken and bringing us ever closer to climate catastrophe…We must end fossil fuel pollution and accelerate the renewable energy transition before we incinerate our only home. Time is running out.
While people suffer from high prices at the pump, the oil and gas industry is raking in billions from a distorted market. This scandal must stop.
U.N. Secretary-General Antonio Guterres
The cessation of new oil, gas and coal developments is not enough to combat global warming and climate change. Existing sites will also need to be shut down. Indeed, nearly 40 percent of reserves in existing and approved sites need to stay in the ground, in the absence of large-scale technology to capture emissions from burning fossil fuels. These findings are contained in a new study that warns that these measures are necessary if the global average temperature is to be limited to 1.5 degrees Celsius above pre-industrial average. Scientists have long warned that allowing global average temperatures to exceed 1.5 Celsius degrees threshold will lead to increasingly severe droughts, floods, heatwaves, sea level rises, the loss of key natural systems and crop failures. (https://ca.yahoo.com/news/study-warns-developed-fossil-fuel-094927175.html.)
Last Wednesday, the United Nations Secretary-General launched a 5-point action plan to promote the use of renewable sources of energy in an effort to combat global warming and climate change that have seen greenhouse gas concentrations, ocean heat, sea-level rise, and ocean acidification reaching record levels in 2021. According to the World Meteorological Organization, the last seven years were the hottest on record. The plan involves the following:
Fostering technology transfer and lifting intellectual property protections in renewable technologies, like battery storage;
Broadening access to supply chains and raw materials that go into renewable technologies, which are now concentrated in a few powerful countries;
Reforming by governments in ways that can promote renewable energies, such as by fast-tracking solar and wind projects;
Shifting away from government subsidies for fossil fuels that now accounts for US$500 billion per year which is more than three times higher than those for renewables; and
Tripling private and public investments in renewable energy to at least US$4 trillion a year.
Climate scientist Zeke Hausfather argued that ‘while rich countries can afford to spend extra on clean energy, poor and middle income countries may be less willing to accept tradeoffs between reducing emissions and lifting millions out of abject poverty. If clean energy sources are cheaper than fossil fuels, they become win-win and will be adopted more rapidly’. Commenting on the Secretary-General’s statement, Jonathan Overpeck, an environmental education professor, asserted that fossil fuels are creating an ever-worsening climate crisis and all that comes with it, and that the solution is to leave them behind in favour of clean renewable energy. (See https://ca.yahoo.com/news/un-floats-plan-boost-renewables-072825404.html; and
https://www.businesstoday.in/latest/world/story/un-floats-5-point-plan-to-jump-start-broader-use-of-renewable-energies-334105-2022-05-18.) In an interview with two foreign journalists about two years ago in relation to Guyana’s oil discovery, I had stated that we should leave the oil where it belongs and concentrate on a diversified economy if we are to contribute to saving the planet from the adverse effects of global warming and climate change.
Last week’s article provoked a reaction from former Minister of Finance Winston Jordan in which he disputed the statement we made that withdrawals from the Consolidated Fund to meet expenditure on public services beyond the first four months of the fiscal year in the absence of an approved budget, would lack constitutional/legislative support. In support of his argument, the former Minister cited Article 2019(3) of the Constitution:
Where at any time Parliament has been dissolved before any provision or any sufficient provision is made … for the purpose of meeting the expenditure of the Government of Guyana, the Minister responsible for finance may authorise the withdrawal of such sums from the Consolidated Fund as he or she may consider necessary for the purpose of meeting expenditure on the public services until the expiry of a period of three months commencing with the date on which the National Assembly first meets after dissolution but a statement of the expenditure so authorised shall, as soon as practicable be laid before the Assembly by the Minister responsible for finance or any other Minister designated by the President and, when the statement has been approved by the Assembly, that expenditure shall be included, under the appropriate heads, in the next Appropriation Bill.
We responded in a letter to the Editor thanking the former Minister for raising the matter to enable us to provide the necessary clarification based on our interpretation of Article 219(3). We stated that the Minister may have overlooked the last set of words in the above quote: ‘until the expiry of three months commencing with the date on which the National Assembly first meets after dissolution’. Parliament was dissolved on 30 December 2019, and the Assembly met for the first time thereafter on 1 September 2020. Therefore, the three months referred to in Article 219(3) would have been from September to November 2020. The 2020 Estimates were approved in September 2020 and therefore there was no need to apply the above constitutional provision. We insisted that withdrawals during the period May to August 2020 would lack constitutional/legislative support.
In a rebuttal, the former Minister stated that he is in possession of a legal opinion dated 13 December 2019 from the Office of the Attorney General relating to funding for the Guyana Elections Commission to hold elections. He quoted the following from page 5 of the opinion as follows in support of his argument:
It is important to note that the 1/12 mentioned in section 36 of the FMA does not apply to the Article 219(3) of the Constitution. Based on sub-article (3) sums (an unlimited amount) can be withdrawn that is considered necessary by the Minister of Finance until the expiry of a period of three months commencing with the date in which the National Assembly first meets after the dissolution.
Section 36 of the Fiscal Management and Accountability (FMA) Act refers to withdrawals from the Consolidated Fund for the first four months of the fiscal year pending the approval of the Estimates. In this regard, monthly withdrawals for each budget agency cannot exceed one-twelfth of the amount that was expended in the previous year. We stated that we agree entirely with the opinion that the one-twelfth rule is not applicable as regards Article 219(3) and that the amount that could be withdrawn is for the Minister to decide.
Having reflected on the matter and in consultation with two friends in the legal fraternity, I accept the argument that the commencement date when the Minister can access funds from the Consolidated Fund may be interpreted to be the date when Parliament is dissolved, and not when the Assembly first meets after the dissolution of Parliament. Therefore, my conclusion that access to the Consolidated Fund during the period May to August 2020 is devoid of constitutional/legislative support, may have been an error on my part. I therefore offered an unreserved apology to my readers and to the former Minister who may have been offended by my conclusion. I stated that it was never my intention to put the Minister in a bad light. My apology was carried in yesterday’s issue of the Stabroek News.
Having regard to the above, a number of questions arise:
Had there been a comma between the words “three months” and “commencing” in Article 219(3), would the latter not relate to “withdrawal” and not “expiry”, which was the basis of my conclusion?
Considering that Article 218(1) specifically requires the Estimates for any fiscal year to be presented to the Assembly within 90 days of the beginning of that year, could it have been an oversight not to have such a comma?
Should Article 219(3) be read in isolation of Article 218(1)?
Did the framers of the Constitution anticipate that there would still be no approved budget when it allows withdrawals from the Consolidated Fund to be made for up to four months into the year?
Also, did the framers anticipate a five-month delay in announcing the election results? and
What happens if there is an undue delay, for whatever reason, in convening the first meeting of the Assembly following the dissolution of Parliament?
The second part of Article 219(3) requires a statement of expenditure so authorized to be presented to the Assembly for its approval before being incorporated in the Estimates. However, there was no evidence that this was done in respect of the 2020 Estimates. We had raised this matter in our article of 16 August 2015. I was at the Ministry of Finance when, on reading the said article, the then Minister invited me to his office to discuss the matter. I pointed to the above requirement which he acknowledged. He, however, indicated the difficulty in separating out the expenditure, especially for the month of June 2015 when the Assembly met after the dissolution of Parliament on 28 February 2015. Needless to mention, no statement of expenditure for the period 10 June to 31 August 2015 was presented to the Assembly.
In today’s article, we examine Guyana’s public debt as at 31 December 2020, as reflected in the latest audited public accounts.
Constitutional and legislative provisions
By Article 221 of the Constitution, the public debt of Guyana and the servicing of that debt are a direct charge to the Consolidated Fund. This means that the annual amounts needed to honour our obligations are not voted for by the Assembly and they take precedence over the annual appropriations approved by Parliament to meet the expenditure on government programmes and activities. Section 3(1) of the External Loans Act authorises the Government to raise loans outside of Guyana not exceeding G$400 billion. In February 2021, this ceiling was increased to G$650 billion. The domestic debt ceiling was also increased at the same time to G$500 billion from G$150 billion. Section 3(6) of the said Act requires all agreements relating to such loans to be laid before the Assembly as soon as practicable after they are entered into.
Section 57 of the FMA Act authorizes the Minister of Finance to borrow funds to: (i) meet periodic cash shortfalls in the execution of the annual budget; (ii) finance investment and infrastructure development projects undertaken by the Government; (iii) fund budget deficits; and (iv) meet the objectives of monetary policy. By Section 60, the Minister is required to repay in full all advances in the form of an overdraft on an official bank account on or before the end of the fiscal year during which that overdraft was drawn. Section 61 also provides for all borrowings to be paid into the Consolidated Fund.
Public debt as at 31 December 2020
Guyana’s public debt at the end of 2020 stood at G$415.153 billion, compared with G$388.698 billion at the end of 2019, an increase of G$26.698 billion. Table I provides a summary of the public debt which comprises both internal and external debts.
In equivalent United States dollars, the public debt was US$1.991 billion, the external portion accounting for US$1.303 billion. Table II gives a breakdown of the external debt by lending agency:
As can be noted, Guyana’s largest creditor is the IDB with 77 loans with outstanding balances totalling US$552.1 million or 42.4 percent of the external loan portfolio. This is followed by the Exim Bank of China with six loans with outstanding balances totalling US$246.0 million or 18.9 percent. The IDB loans were mainly in relation to road construction and rehabilitation; low income settlement; power generation and electrification; urban development housing; water and sanitation; agriculture support; citizens security; health sector programmes; justice administration; public financial management; and environmental management.
To be continued –
