One of the candidates of the APNU+AFC has been telling the Coalition’s supporters that they must begin to think of themselves as billionaires. He said that a lot of money will be coming the country’s way from oil.
I am not so sure. The first year revenues are expected to be around US$300M maximum. And by the time that goes into the Sovereign Wealth Fund (SWF), not much is going to be left to be spent locally.
The purpose of a Sovereign Wealth Fund is to ensure that you do not spend all of your earning at any one. The SVF makes provision for savings to be set aside to benefit future generations.
Guyana’s oil wealth will not last forever. This was all the more reason why a better deal should have been had. Up to now, it has never been asked of the government when Cabinet ever considered the contract which was signed with Exxon.
Guyana got shortchanged in the negotiations. As such, politicians should not be creating false expectations about unimaginable wealth coming the peoples’ way.
As if the agreement was not enough of a catastrophe, the government went ahead and sought international assistance to develop a SWF into which the oil revenues will be paid. Some countries do not spend the deposits into the fund; they only utilise the interest of these deposits.
In this way, they are certain that when oil production ceases, there will still be funds left to sustain development.
Guyana seems to have accepted uncritically the need for an SWF. Not because other countries have such funds, does it mean that it is in the nation’s interest to also have a SWF.
Sovereign Wealth Funds are imperialist creations, which allow for oil money to be deposited into developed countries. In other words, most of the money which is paid to us for our oil royalties and profit oil will end up back in foreign banks. These foreign banks will invest our money elsewhere and pay us an interest.
Guyana does not need an SVF at this stage. The sums, which will be earned over the next five years, will not be that great to require the establishment of an SVF. The oil revenues should have been used immediately to invest in paying teachers, nurses and the police better salaries.
The first year of oil revenues should have been used to triple the salaries of these categories of workers. When in opposition, the government had been complaining that workers were being underpaid. Here is the best chance to settle, once and for all times, a living wage for teachers, nurses and the police.
Money is no longer the problem. The first year of oil revenue will be sufficient to triple the salaries of teachers, nurses and the police. If this is not done now, it will never be done.
These are the promises, which the people at the road corners should be hearing. They should be told that workers will be the first and primary beneficiaries of the US$300M per annum which will be coming Guyana’s way.
There is no need for SWF. Pay the workers the money and stop telling people nonsense that they should start thinking like billionaires.
There is not going to be any ordinary persons who will become a billionaire. Kaieteur News has been pointing to the situation in Nigeria, a large producer of oil which has high levels of poverty despite its oil wealth.
Oil wealth does not trickle down to the poor and politicians would have the people believe. The people have to demand their share of oil revenues and they have to demand it early because once it goes into that SVF, it will not be easy for the people to get their hands on it.
No political party is yet to call for a dissolution of the SWF. This columnist has no intention of voting but if I had to vote, I would give my vote to a party, which will outlaw the Sovereign Wealth Fund and ensure that workers are immediately paid a living wage and that the public service minimum wage becomes the national minimum wage.
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