Green paper “prescriptive”, pays lip service to Dutch disease – Ram
…Govt’s coverage ‘public relations gimmick’
Outspoken attorney and accountant Christopher Ram has dubbed the Government’s coverage of the Green Paper “public relations and propaganda” and not serious consultations.
He told a forum organised by the Guyana Manufacturing and Services Association (GMSA) on Thursday to discuss the Sovereign Wealth Fund (SWF) that the paper leaves more questions than answers.
“It is not a Green Paper, it’s a White Paper. A Green Paper tells you what your options are and various variables, what are the advantages and disadvantages,” he explained.
However, he claimed that the document is “very prescriptive.” In other words, it actually outlines what the Government plans to do. He argued that that is not consultation.
“And we are also speaking against the background of inadequate information. We still don’t know things about the contract and there is an elephant in this room and we are not addressing it,” he said.
Ram, pointed to a host of things that are yet to be done, including information being released about the prospecting license, the production license, a depletion policy, and no local content policy.
“I think the paper has paid some lip service to the Dutch disease particularly as it relates to the impact on exchange rate, inflation, unemployment, balance of payment, unbalanced development. We have already seen the Dutch disease here,” he added.
The outspoken accountant told the forum attended by persons from civil society that the distinction must now be drawn between the theory and the practice.
“We are gone a far way with a Natural Resource Fund…And we are seeing the economy already suffering from the Dutch disease…We have said, we talked about the resources curse. There is nothing saying how to do you prevent it,” he further pointed out.
He continued, “I am, not sure what there consultation process is, who is taking the notes, and do we have a committee in the Ministry of Finance for the Government to consider recommendations and to decide? Because unless we do, we are hearing that government is going ahead with legislation by the last quarter of 2018. They are not waiting on us.”
Ram stressed that “Unless you put good mechanisms in place nothing is going to work” and added that he believes that “the best sovereign wealth fund you can have is a well-managed economy and a proper structured country.”
Using Singapore as an example, he said that that country is not one that is natural resource blessed but still has one of the best economies and SWFs in the world be “because it “runs its economy well and puts aside its money.”
Veteran trade unionist and General Secretary of the Guyana Trade Union Congress (GTUC) Lincoln Lewis who was part of the panel said that the Government has failed to engage the Guyanese people in active consultation to hear from them what they would like to see done with the resources from the oil and gas sector.
Meanwhile, University of Guyana lecturer Carol Webster said there is need for a clearer rules set out in the Fund that will guarantee sustainability and the equal distribution of wealth.
The discussion covered issues such as the guiding principles for a SWF; how the SWF should be utilized and mechanisms for doing so; governance mechanisms, and oversight and management of the SWF and the role of civil society and the private sector. Forum also included a representative of the Finance Ministry Sonya Roopnauth.
The Green Paper on the Natural Resources Fund (NRF), which will deal with the question of management of anticipated oil revenues starting in 2020, was laid in the National Assembly in August. Government has said that legislation in relation to the fund could be laid in Parliament before the end of the year, as indicated in Budget 2018.
It said that the proposed legislation addresses two main issues: stability of the economy, and saving for future generations. Advice on this fund is being sought from the International Monetary Fund, the World Bank, and the Commonwealth Secretariat.
Opposition Leader Bharrat Jagdeo recently said he still did not agree with the model being proposed for the Fund, which could cater for a representative from the Opposition.