Dec 28, 2016 News
Minister of Natural Resources, Raphael Trotman had vowed to, by the end of 2016, take to the National
Assembly, a proposed framework for the much needed Sovereign Wealth Fund (SWF) for discussion and debate. However, days before year end, there is yet to be even a signal that this document will make it to the National Assembly anytime soon.
A Sovereign Wealth Fund is a government-owned investment fund. It has been set up by many countries with oil wealth, and there are several models to choose from.
On several occasions, Trotman assured the press that his Ministry was well on stream in preparation of the document and Guyana was gearing to get the best version of the fund suited for the country’s unique needs. However, in his budget speech, he hinted otherwise. For the first time, on that occasion, the Minister said that the framework will be delivered in 2017, but did not give a reason as to the delay. Efforts to contact the Minister yesterday to get word of a new timeframe and the reasons for the delay proved futile.
In his recent address to the National Assembly, Trotman said that it is important that the extractive industries that fuel Guyana’s growth “today also provide for our children tomorrow.”
He said that in an effort to ensure that the benefits accrued from the natural resources sector reach every Guyanese for generations to come, “the Government of Guyana will develop a framework for a Sovereign Wealth Fund in 2017.”
He told the House that the Sovereign Wealth Fund will enable the government to “protect the economy from the volatile nature of natural resource revenues, help grow and modernize the sustainable non-extractive sectors of the economy, and further enhance the capacity of our people”.
Trotman outlined the considerations for the three sub-funds within the Sovereign Wealth Fund; Stabilization Fund, Infrastructure and Social Development Fund and Citizens Participation Fund.
He said that the government has already begun seeking advice and guidance on developing such a Fund from the School of Public Policy – University of Calgary and the Commonwealth Secretariat, both of which are equipped with strong expertise on extractive resource governance. Trotman told the House that the creation of a long overdue sovereign wealth fund will demonstrate to Guyanese and the world at large, that hydrocarbon development, and by extension all other extractive industries, can be catalysts for a green economy.
Earlier this year, Trotman and Minister of Finance Winston Jordan went to Uganda to get a firsthand understanding of the mechanisms that country has employed for the health of its oil and gas sector.
Trotman said that his Ministry is working along with the Ministry of Finance on the establishment of the fund and “we are proceeding apace.”
He said that the collaboration is necessary, as the Ministry of Natural Resources is tasked with developing policies to govern the incoming oil and gas sector, but the responsibility of actually setting up the fund is with the Ministry of Finance.
Trotman described his trip as a “study mission” as he explained, “we are to observe Uganda’s development of their oil and gas sector.”
The Minister said, “We are not saying no to anything, it is just a matter of streamlining. So by the end of this year we will be able to bring to Parliament the proposed framework for discussion and debate.”
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