Apr 19, 2018 News
The policy that is supposed to govern the establishment of a Sovereign Wealth Fund (SWF) will indeed benefit from public consultation. This was announced by Minister of Finance, Winston Jordan at his most recent press conference.
Many Guyanese have begun to worry about the fact that two years away from oil production, Guyana is still to finalize even that policy. Concerns were also raised about the fact that there seems to be no consultation on the policy.
Jordan recently told reporters that his Ministry is finalizing the green paper to go to Cabinet early next month. He said that legislation will have all the Santiago principles in it.
The Santiago Principles consist of 24 generally accepted principles and practices. The Santiago Principles promote transparency, good governance, accountability and prudent investment practices whilst encouraging a more open dialogue and deeper understanding of SWF activities.
Jordan told the media that the fund “will be open for consultation, and criticisms before going to Parliament. We are on target for getting it into Parliament before the end of the year.”
Jordan said that the Commonwealth has been providing assistance to Guyana on the SWF.
“Dr. Daniel Wilde is the expert given to us over the last two years. He is an excellent individual and he has been a real source of information for those who have been working with him. He will be there for the consultations and seeing it through to the Parliament.”
The announcement of Government’s intention to have consultation will be welcomed by the likes of Attorney-at-law, Charles Ramson.
Ramson said that studies indicate that one of the major mistakes countries make in relation to their SWF is taking a political partisan approach.
“Why is that a mistake? If from the beginning the major stakeholders, especially the political organizations, are not involved in its conceptualization, legislative implementation, and operation then the moment that a new government assumes office they can and more than likely will change the rules that govern that SWF.
This will be done simply by majority vote in parliament or by executive order. But the bottom line is that the success of a SWF is critically dependent on continuity and legitimacy.”
Ramson said that in order to ensure continuity of the governing rules and operation of a SWF, the relevant stakeholders especially the political organisations must be involved at the very beginning.
Ramson told Kaieteur News, “In order to ensure legitimacy of a SWF, you need the public to “buy in” because you are deciding how and when to spend the oil revenue and that “buy in” can only happen with education and consultation in a government driven process.”
The Attorney-at-law said that the government cannot be too blind; it is to see that the public is not left out of the process then the SWF loses its legitimacy and they can then demand their new representatives change the SWF since they were left out of the process at the beginning.
Ramson noted, “So far, we have seen no involvement from anyone other than the government, an IMF team and a Commonwealth team. Where are the Guyanese representatives and stakeholders? The revenue from Guyana’s oil belongs to all Guyanese. And our Constitution says that sovereignty belongs to the people of Guyana.”
Ramson said that the nation has already witnessed the government failing to meet its own commitments on the SWF. He noted that Minister Trotman had promised to have a draft laid in the National Assembly at the end of 2016 and we are now in March 2018.
“I had to ask a question at the PSC business summit in November 2017. ‘What was the update on the SWF?’ We were then told it is now with the Ministry of Finance…In a democracy how a government does something is as important as or even more important than what it does.”
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