May 20, 2015 News
– parallel treasuries will come to an end –Finance Minister designate
By Kiana Wilburg
Finance Minister designate, Winston Jordon, is already moving to get an understanding of the
current state of the economy.
Among many of his discoveries is the fact that the Consolidated Fund is in heavy overdraft. This Fund is Government’s main bank account into which revenues are deposited and out of which expenditure is made.
The economist who is currently conducting several meetings with senior Finance Ministry Staff and other personnel for interlinked agencies said that an explanation was provided for this.
Jordon explained that the Consolidated Funds being in overdraft is due to the behaviour of the Guyana Gold Board and its failure to reimburse the account.
The economist said that there is an arrangement in place to assist the Gold Board.
“The government doesn’t have the kind of money it needs to pay miners so it draws from the Consolidated Fund and reimburses it when it sells the gold. But there is the practice of “hedging” (A strategy used in limiting the probability of loss from fluctuations in the prices of commodities) after they collect the gold and there are risks involved in that.
“And if you aren’t good at it you can lose in the sense that you are forced to sell for a price far lower than what you bought at, I think it is public knowledge that the board got caught in the fall of the gold prices.
“So they might have bought at high prices and may have been hedging but then the prices collapsed…”
Jordon said that while he believes that the gold board has been drawing heavily from the Consolidated Fund hence the state it is in, he will provide a more concrete position when he is informed of the state of affairs of the Gold Board.
“This is what I was told and I have asked the Chief Statistician to provide me with some figures. I haven’t been around a bit and I haven’t seen their accounts so I wouldn’t be able to say if they sold enough or whether they are still holding lots of gold…”
“What I do know is that I have been told that the overdraft is due to the fact that gold has not been able to reimburse the Fund as yet which means that they are probably hedging and that’s my only explanation without seeing the accounts as yet.
“But as an economist I can only presume that this is perhaps the case…,” Jordon said.
The Finance Minister designate said that another reason why the Consolidated Fund is in heavy overdraft is that there are a lot of funds belonging to the government but are being held outside of the fund like a “parallel treasury”.
He reminded that his government had spoken on this matter on several occasions when it was in the opposition and it is something that will be rectified at the earliest.
Jordon emphasized that this needs to come to an end. He believes that it is a significant contributor to the state of the Consolidated Fund.
“I don’t like to speak off-the-cuff but I will be dealing with this … I will make this one of my priorities because it is a burning issue with the government and it would be remiss of me, not to look at all these parallel treasuries and correct this irregularity.”
The Finance Minister designate also stated that the heavy overdraft reflects poor accountability. He said that an audit will be done into several government funds; including one into the Consolidated Funds.
Jordon graduated with a Degree in Economics from the University of Guyana in 1981. In that period, he received the Vice Chancellor’s Special Award for Best Graduating Student in the Faculty of Social Sciences.
In 1983, the economist received a Commonwealth Scholarship to pursue postgraduate studies in Economics at the University of Warwick, UK and later graduated in 1985. He has a certificate in Public Sector Budgeting from Harvard University and another in Budgeting and Structural Adjustment Management from Penn State University, USA. In March, 1993 he worked with the International Monetary Fund as an intern.
Jordon would be bringing over 30 years of working experience in a number of areas including macroeconomic management; economic policy reform, programming and governance; resource mobilization; public finance; public sector budgeting; policy design and analysis; and design of poverty programmes and safety nets. He also served on several technical committees and state boards, including: Presidential Committee on Economic Matters (1990-91); Presidential Committee on Public Service Wages and Salaries (1997); Presidential Committee on the Privatization of Guyana Electricity Corporation (1997) and Linden Mining Enterprise (2003); Arbitration between the Government and the Guyana Teachers’ Union (1999).
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