The Trade Union Congress, Transparency Institute of Guyana Inc. and Article 13, the Civil Society Group formed to promote inclusionary and participatory governance, call on President Irfaan Ally and the Government of Guyana to delay a parliamentary vote on the Natural Resource Fund Bill scheduled for this Wednesday, December 29.
We note that this Bill was gazetted on December 15, 2021, and read for the first reading in the National Assembly the following day.
A Natural Resource Fund, also known as a Sovereign Wealth Fund is designed to impact positively on a country’s economy, its exchange rate, and inflation rate and to prevent the Dutch Disease and worse, the resource curse, all over the short and long term.
Indeed, the Act describes itself as “establish[ing] a natural resource fun to manage the natural resource wealth of Guyana for the present and future benefit of the people and for the sustainable development of the economy”.
“We consider it entirely unreasonable, even in the best of circumstances, for the people of Guyana and their parliamentary representatives to have just eight working days to consider the text and implications of undoubtedly the most significant piece of legislation of the PPP/C Administration.
“John Lipsky, First Deputy Managing Director, International Monetary Fund, in a 2008 seminar organised by the Ministry of Finance of Chile, noted that countries exporting nonrenewable resources have a challenge of transforming” such resources into sustainable and stable future income, compensating for the reality of volatile commodity prices and finite supplies,” according to the Guyana Trades Union Congress.
It added that while “our organisations have not had sufficient time to consider the full text of the Bill, we note the dismantling of the oversight mechanisms contained in the Act of the same name passed by the APNU+AFC Government.”
This Bill places the money in the Fund in the hands of a Board of Directors appointed by the President and that the Board reports to the Minister of Finance; that a Public Accountability and Oversight Committee comprising of nine persons providing vaguely for “non-governmental oversight of the Fund” is the body charged with reporting to the National Assembly; and that the Fund will be operationally managed by the Bank of Guyana, whose Governor is also appointed by the President, the GTUC said.
“We also find contentious the provision in the First Schedule to the Bill allowing the Government to appropriate the first US$500 million in the Fund, 75% of the next US$500 million or US$375 million, 50% of the next US$500 million or US$250 million, and 25% of the next $500 million or US$125 million.
“In other words, of the first US$2 billion, the Government is permitting itself to take out $1,250 million, not including withdrawals for emergency financing. If the constant resort to the Contingency Fund is any guide, emergency financing will take up what is left after these set withdrawals.”
The GTUC is calling on the President, in accordance with the requirement of the Constitution, and especially in the light of the recent ruling of the CCJ with regard to what is effective consultation, and further, to enable his Government to receive the advice and recommendations of a wide cross-section of the citizenry, to have the Bill referred to a Select Committee of the National Assembly to which members of the public are permitted to make recommendations.
