The Natural Resource Bill 2018 was yesterday presented and read for the first time to the National Assembly.
This is in keeping with government’s previous undertaking to have the Bill presented to the National Assembly before year end.
The introduction of the Bill follows the presentation of Government’s ‘Green’ paper titled “Managing Future Petroleum Revenues and Establishment of Fiscal Rule and a Sovereign Wealth Fund” to the National Assembly on August 8.
In his introduction of the Green Paper to the National Assembly Minister of Finance, Winston Jordan, had said the document was being issued by the government to present preliminary proposals to stimulate discussion. It also detailed specific issues and pointed out possible courses of action in terms of policy and legislation.
In addition, Minister Jordan described the day as a significant date in the history of the country. He said the paper captured the key mechanisms to ensure sustainable use of petroleum resources to achieve a diversified and green economy.
A specific focus is being placed on avoiding the mismanagement of the national patrimony or as it is known “the natural resource curse.”
The minister then noted that the presentation of the Green Paper was demonstrative of the administration’s commitment to good governance and accountability as it relates to the management of the petroleum resources, which has transitioned into the establishment of a Sovereign Wealth Fund (SWF).
He reminded that in 2016, after the announcement of the first discovery Minister of Natural Resources, Raphael Trotman, engaged the Commonwealth Secretariat to assist in the drafting of the SWF legislation.
The Ministry of Finance then followed through with this engagement at the directive of President David Granger to continue the course of crafting this key legislation, Minister Jordan stated.
In the interest of good governance, Minister Jordan anticipated that the SWF legislation will be supported by all Members of Parliament (MPs) given the crucial role the fund plays in the management of petroleum revenues of the magnitude Guyana is likely to attain.
Stabilisation, savings and domestic development are the key objectives of the fund and the fiscal rule options outlined in the ‘Green’ paper, the minister said, are designed to achieve these objectives.
Given the uncertainty surrounding the future of fossil fuels, the minister emphasised the need for savings to begin from the first day of production.
“To achieve this function, revenues will be invested in diversified portfolios comprising financial assets external to domestic with long investment horizons and higher expected returns,” he noted.
When investing, the government will ensure that these will be catalytic so that a strong economy can be realised.
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