Jul 19, 2016 News
– denies administration made undocumented withdrawals
In the wake of revelations that the PetroCaribe fund received over US$400M in funds over a seven-year
period, former President Donald Ramotar is adamant that every cent can be accounted for and traced at the Ministry of Finance.
According to the former President, yesterday, the agreement, which was initiated by his predecessor in office Bharrat Jagdeo, was above board. He noted that money derived from oil imports from Venezuela went into the fund.
Ramotar stated that any outflow/monies extracted from the fund were recorded. The former Head of State went on to say that not only were outflows recorded; there were also records of how the money was used.
He made it clear that money from the fund was used for paying rice farmers, who from 2009 began supplying paddy to millers for processing and export to Venezuela. This arrangement, the oil for rice arrangement, was formulated to help Guyana mitigate its debt to Venezuela.
Ramotar pointed to the US$15M which was taken from the fund and plugged into the Hope Canal project. This project was a four-component development and was touted as being a solution to the flooding being experienced along Guyana’s coast.
Its structure includes a channel working in conjunction with three other components: a high level sluice outfall structure, the conservancy head regulator and a public bridge. There have been structural problems with the project, however.
Ramotar, who served as President of Guyana from 2011 to 2015, could not give details about these rice payments and how much was used to pay rice farmers. He did, however, describe the Government’s statements about his party’s
management of the fund as “fishing.”
“They are just fishing, instead of concentrating on development,” he said. “Every single cent can be traced.”
The Guyana Energy Agency (GEA) in its annual reports dating from 2007 shows that over the duration of the agreement (2007-2015); 12,175,027 barrels of oil were imported through the GEA from Venezuela, making Venezuela the single largest source of fuel imports for Guyana.
Over the course of the agreement, the fund recorded an inflow of at least $84.1B. This was disbursed to the Ministry of Finance as part of the financed portion, after GEA would have facilitated Venezuela being paid its portion.
The reports detail that in 2008, 1,419,868 barrels of oil were imported from Venezuela and there was $16.5B (US$80M) in disbursements to the Ministry of Finance, as the financed portion.
In 2009, the oil imported from Venezuela was 1,079,252 barrels, representing 28 per cent of total oil imports for the year. While the 2009 report does not make mention of disbursements, in 2010 $9.1B (US$44.8M) was disbursed to the Ministry under the agreement.
In 2011, 1,451,843 barrels of oil were imported from Venezuela, 33.5 percent of imports. The agency reported that $21.7B (US$105.2M) was disbursed to the Ministry of Finance as the financed portion under the agreement.
In 2012, a mammoth 2,378,982 barrels of oil were imported from the Spanish-speaking country. Venezuela accounted for 76 percent of total imports that year. The report states that $36.8B (US$178.8M) was disbursed to the Ministry.
Meanwhile, for 2013, the oil imported was 1,597,341 barrels. In 2014 that total was 1,749,883 barrels and in 2015, the year the agreement came to a premature end even before it expired, the number was 834,056 barrels. The reports do not say what was disbursed to the Ministry for these years.
Despite the billions of dollars flowing in, when the coalition Government took office last year, it had announced that the PetroCaribe fund was completely empty. With there being no monies in the Fund to pay rice farmers, the coalition had reportedly been forced to dip into the Consolidated Fund for US$9M to clear off some of the debt owed to them.
Since this initiative was administered under the People’s Progressive Party (PPP) administration, former President Bharrat Jagdeo had defended his party’s use of the fund.
Jagdeo had been quoted in sections of the media as saying “Let’s say oil prices are high, Venezuela said we will give you some credit. If oil prices are high, then 40 per cent of the oil payments can be kept by the country as a loan, 60 per cent you have to pay over a time span.”
He had gone on to explain that while other Governments in the Caribbean used the funds for development projects, the PPP government placed the money in the PetroCaribe fund at Central Bank, to finance the purchase of rice. This rice was shipped to Venezuela to mitigate Guyana’s debt.
Besides rice purchases, Jagdeo had admitted that the PPP Government had used US$15M from the fund to construct the Hope Canal, East Demerara Water Conservancy. This was because the Government, “Saw it as important for the agriculture sector.”
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