By Kiana Wilburg
With oil money, the temptation to spend wildly is immense. Governments often fall prey to using those funds to build projects which only enhance their political image. But Finance Minister, Winston Jordan has assured that the government is rolling out a number of mechanisms which will ensure that Guyana’s oil wealth is not squandered on another US$200M Skeldon Sugar Factory that turned out to be a white elephant, or a Marriott Hotel that was created at a time when there was no need for it, and remains a debt on the backs of taxpayers.
Jordan’s comments in this regard were in the wake of a statement that was recently released by the International Monetary Fund (IMF) following its Article IV Mission to assess the nation’s economic health.
In its statement, the Fund reiterated the importance of addressing the weaknesses identified in the 2017 Public Investment Management Assessment (PIMA). It said that greater urgency is attached to these reforms ahead of the expected increase in public spending as oil production begins.
In providing an update on this matter, Minister Jordan revealed that Cabinet, over a month and a half ago, approved a PIMA framework as suggested by the IMF. He said that the government is in the process of implementing it. Further to this, the economist said that part of that process involves doing studies on projects before putting them into the budget. He said that this is to make certain the projects are going to use the nation’s resources in a productive manner. Jordan further stated that it will result in government getting a bank of projects that it could seek financing for.
Speaking to the importance of this framework, Minister Jordan said, “The IMF is stressing on this because there is temptation, as you can see already in the opposition when they go out to their meetings, they are talking about what they will do and won’t do with the oil money. So this framework is necessary, because it will prevent the development of projects that are merely whims and fancies of the political party. It will ensure the money is used on projects that will bring lasting benefits to the nation.”
The economist added, “In America you call them pork barrel projects, projects that are designed to enhance the image of the politicians but not the civility of the community. So we have that framework in place to prevent this. In our ministry, as well, we have a public financial management reform and a number of these things are being rolled out.”
The Finance Minister noted that the IMF will be assisting the government in accelerating the implementation of the framework and reforms in question.
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