Jan 24, 2015 News
The government has been given its first clear sign of an international sanction for proroguing the Parliament.
Yesterday, the European Union (EU) said that it has temporarily put on hold its two latest partial payments being, EURO $28.9M for Guyana’s sugar sector and EURO $14.8M for sea defences, until all eligibility criteria, including budget oversight, are “satisfactorily” addressed.
The EU made clear that it has a long standing commitment to support development and poverty reduction in Guyana. In 2014, it said that EURO $34 million was allocated to Guyana under the 11th European Development Fund. EU aid is channeled through different modalities. Budget support is one of them.
Just a few days ago, UK High Commissioner Andrew Ayre said that Guyana may be facing possible sanctions for operating without a Parliament. He had reportedly said as well, that UK taxpayers would more than likely object to its government providing budgetary support to a country functioning without any means of parliamentary scrutiny.
This was followed by a firm retort from Head of the Presidential Secretariat, Dr. Roger Luncheon. He had accused the EU and the British High Commissioner of conspiring to dishonour the longstanding budgetary support agreement between the EU and the Government of Guyana.
Luncheon also hinted that the EU had reneged on an agreement with Guyana on budgetary support.
“His attempts to damage Guyana’s credibility and its economic prospects are considered by Cabinet to be unpardonable…” Luncheon had said, in response to the UK envoy.
Luncheon even deemed Ayre’s comments in relation to withholding development aid as “most dastardly” and added that Government eagerly waits to see the departure of the “pariah.”
Dr. Singh at his last press conference was asked to comment on this and whether it was discussed at Cabinet, given Dr. Luncheon’s subsequent views. But he declined to venture into this realm.
However, Dr. Singh had subsequently challenged the Union to say why it is holding back the payments approved.
He said that Guyana had met its obligations regarding the budgetary support payments due to it by the EU. He said that this is confirmed in a written agreement between the two.
A large percentage of the EU funds received over the years would go to the sugar industry, but Guyana has been failing to meet all of the indicators to secure the funding. The Finance Minister said that almost all of the indicators were achieved and based on those, Guyana qualified for the disbursement of EURO $25M.
He had said too, that Guyana has an ongoing engagement with the Union and it never presented any “credible reasons” why government has not received the monies to date.
He later qualified the actual reasons given to be “spurious”.
The Finance Minister had also said that the Head of the EU delegation in Guyana, Robert Kopecký has written to the body in relation to the payment being made.
To date, Guyana has received over $31B since the execution of the Guyana National Action Plan (GNAP) in 2006 on Accompanying Measures for Sugar Protocol Countries alone. But the ailing sugar industry has been unable to meet all of the indicators, thereby making it incapable of qualifying for full funding under the GNAP.
A report at the 51st meeting of the Council for Trade and Economic Development (COTED) disclosed that Guyana only received 70 percent of funds allotted from the accompanying measures.
EU confirmed compliance with grant conditions since September 2014 –Govt.
The Government of Guyana has noted with concern a press release purportedly issued by the European Union Delegation in Guyana claiming that the EU had “temporarily put on hold” certain budget support grants “until all eligibility criteria, inter alia budget oversight, are satisfactorily addressed”.
Government now wishes to make publicly available the attached communication from the same EU Delegation, dated September 8, 2014, indicating clearly that Guyana had met the eligibility criteria required to qualify for disbursements totaling €25,858,025, and that the same Delegation had recommended disbursement of this sum to the EU Budget Support Steering Committee in Brussels which was due to meet on September 17, 2014.
In light of the Delegation’s attached written confirmation of Guyana’s qualification for disbursements totaling €25,858,025, the Delegation might now wish to correct the misinformation contained in the press release it issued earlier today, and also explain to the people of Guyana what exactly accounts for the failure to disburse the sums since September 8, 2014, especially bearing in mind that Parliament was not prorogued until November 10, 2014.
Confirmation attachment appears below
From: SANDKER Ewout (EEAS-GEORGETOWN)
Date: Mon, Sep 8, 2014 at 4:07 PM
Subject: Budget support payments
To: Ashni Singh
Cc: “KOPECKY Robert (EEAS-GEORGETOWN)”, “MADL Benedikt (EEAS-GEORGETOWN)”, Tarachand Balgobin, Sonya Roopnauth
This is to inform you that the Delegation has submitted a positive disbursement advice to its Headquarters with regard to the budget support tranches listed below. They will all be discussed for decision by our Budget Support Steering Committee on 17 September 2014.
If I am not mistaken it is the first time that the budget support disbursement requests for Guyana have been submitted this early in the second semester, maximizing the chances for payments within the budgetary year (as they are always subject to availability of payment credits). I believe this is illustrative for the good cooperation between your office, the line Ministries involved and the Delegation, for which I would like to express my appreciation.
I take the opportunity to thank you for providing us with detailed information on the non-legislative measures relating to CFATF recommendations, which I am sure our colleagues in Headquarters will find very useful and informative. As soon as we have been debriefed by our Headquarters we will let you know about the result of the Steering Committee.
10th EDF Sea Defences:
• Fixed tranche 2013: 2.8 Mio € – the Delegation recommended full payment based on fulfillment of general conditions
• Variable tranche 2014: 3.5 Mio € – the Delegation recommended payment of 2.905 based on fulfillment general criteria and of specific criteria 1 and 2 (except for sub-indicator on the condition survey not reaching the required length surveyed).
Sugar AAP 2012:
• Variable tranche: 2. 784 Mio € – recommended for full payment based on fulfillment of general conditions and indicators 3 and 8
Sugar AAP 2013:
• Fixed tranche 6.9 Mio € – – the Delegation recommended full payment based on fulfillment of general conditions
• Variable tranche 12. 075 Mio – the Delegation recommended payment of 10,469,025 based on fulfillment of the general conditions and indicators 1,3,4,6,8. Indicator 5a was not considered fully met as the foreseen investment of the which system at Skeldon was not done during the foreseen time.
The Delegation recommended payment of 25,858,025 EUR.
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