Sep 11, 2013 News
Following Monday’s landslide victory by the opposition Conservatives in Norway, an anticipated conservative approach to the handling of that country’s finances could potentially have an effect on the remainder of the money that Guyana had negotiated for with the previous administration.
Shadow Finance Minister Carl Greenidge, yesterday in a telephone interview with this newspaper said that while it is too early to pronounce definitively, there is the very real possibility that the money that has not yet been disbursed to Guyana could be withheld.
Led by Erna Solberg, Norway’s opposition Conservatives, promising tax cuts and privatizations of state entities in order to reduce spending, comfortably won the elections.
Solberg, nicknamed “Iron Erna” for her tough stances when she served in the Norwegian cabinet between 2001 and 2005, in her victory speech promised that, “we will give this country a new government.”
Economic growth in Norway has been slowing in recent years with its competitiveness stagnating, and the government’s record on critical social services is mixed.
Voters have accused outgoing Prime Minister Jens Stoltenberg of wasting a once-in-a-lifetime economic boom.
The Conservatives promise to diversify the economy away from oil, privatize state firms, and reduce some of the world’s highest tax rates to give their private sector more breathing room.
Former President Bharrat Jagdeo had negotiated a Memorandum of Understanding (MoU) with the former Norwegian administration, led by Jens Stoltenberg, which saw some US$250M promised to Guyana over a five-year period.
Greenidge told this publication that he does not believe that the money that has already been disbursed by Norway to the World Bank for Guyana would be withdrawn, but rather it is the tranches yet to be delivered that face the threat.
Two tranches of the committed US$250M have already been deposited with the World Bank for Guyana, totaling US$70M, for 2010 and 2011. This would mean that US$180M faces the threat of being withheld.
Greenidge told this publication that what complicates the situation further is that Guyana has not been submitting projects to the Norwegians for consideration.
In order to access the money from Norway to be spent in Guyana, the country would firstly have to submit a project document and if it is determined that it meets the criteria for expenditure under the MoU, the money would be approved.
Guyana had committed to spending just about US$80M of the money on the Amaila Falls Hydro Electric Project, but Norway had said that this money would only be approved if Guyana and the IDB have complied with all their requirements.
It should be noted that under the agreement, Guyana would not be receiving any more tranches of money from Norway until what was disbursed had been spent.
With the IDB walking from the Amaila Falls Hydro Electric Project, Greenidge said that this US$80M money could also possibly be in jeopardy.
He did say that it is unlikely that with the change in government such a move could be coming overnight.
“The Norwegians wouldn’t act like that,” said Greenidge, adding that the new administration would first have to have its technical personnel meet and discuss the matter extensively.
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