Guyana is just two years away from the commencement of commercial oil production in 2020. Hence, in the coming weeks, this column will be dedicating a series of articles on a proposed framework for a Sovereign Wealth Fund (SWF) for the extractive sector. The Government of Guyana (GoG) has assured that a SWF will be in place well in advance of the production of oil in 2020. However, this should not be treated lightly given the slothful pace at which things are being done sometimes, if not at all time – for it will call for a lot of work on the part of the Government to establish.
Over the last two years or so (2016/2017), there has been much public discussions and/or debates on the model of the SWF that Guyana should adopt. As a contribution to the discussions, this newspaper carried a beautiful piece in one of its Editorials on June 22, 2017, with the caption – “Guyana’s Sovereign Wealth Fund”. The editorial highlighted that the Opposition Leader suggested that Guyana should adopt the Norway model instead of Trinidad and Tobago’s. Indeed, the Norway model is among one of the bests in the world as compared to Trinidad and Tobago.
But surprisingly, in the last press release on the subject of a SWF sometime in December 2017, the Finance Minister implied that the Government has crafted a preliminary legislation by looking closely at Uganda’s legislation, and which has been reviewed by the Inter-American Development Bank (IDB), International Monetary Fund (IMF), the Commonwealth, United States and the United Kingdom.
Despite it has been (hopefully & truthfully) submitted for review by these international institutions, according to the Minister; this column is not convinced and/or impressed with this development – chiefly the mirroring of Uganda’s model. The Finance Minister sought to justify this approach by stating that Uganda is at a similar stage of development of its petroleum sector to that where Guyana is currently or will be (I stand corrected). This justification (if its indeed true) is in itself an unjustifiable and unfathomable justification, simply because – if Uganda is at the same stage as Guyana, then they are still at the trial and error phase and it is thus logically a weak framework, or certainly not the best.
One may naturally have the proclivity to wonder, why such a harsh assertion as stated above. Uganda is an oil producing country in East Africa, but the problem with Uganda is that it is known to be one of the most corrupt countries in the world. In fact, this is not just an universal perception, it is a factual ideology supported by an 11-page report which was published on the “Overview of corruption and anti-corruption in Uganda,” by Transparency International (www.transparency.org).
Also, recently there was a video on YouTube – which went viral on the Internet – showing a huge ‘brawl’ in Uganda’s Parliament. The video was circulated just around the same time on social media, when our own Parliament went into a moment of chaos, paralleling the exact drama in Uganda’s Parliament; but the only differences were, (1) the Police did not intervene in Uganda’s Parliament and, (2) the politicians were seen, literally and physically assaulting one another.
For a developing country like Guyana, the least you want to do is to adopt a weak framework, susceptible to corrupt tendencies by politicians. The wisest and brilliant thing to do is to adopt one of those frameworks that were proven to be successful and yield the best results for the country and its people, by the much more advanced economies.
Norway, on the other hand, is one of the most peaceful and clean countries and it ranks among the least corrupt countries in the world (http://www.business-anti-corruption.com/country-profiles/norway), noting that according to the 2016 Corruptions Perception Index reported by the Transparency International, Norway is the 6th least corrupt nation out of 175 countries. In further citing the report, “Corruption Rank in Norway averaged 8.09 from 1995 – 2016, reaching an all-time high of 14 in 2008 and a record low of five in 2013. In the same report, Uganda was ranked 151 least corrupt out of 175, ranking on average 112 from 1996-2016, reaching an all-time high of 151 in 2016 and a record low of 43 in 1996 – while Guyana was ranked 108 least corrupt out of 175 nations, averaging 123.58 from 2005 – 2016, reaching an all-time high of 136 in 2013 and a record-low of 108 in 2016.
In closing for today, should we not try to emulate a country like Norway that has done remarkably well in these key areas? Why do we want to emulate a globally perceived corrupt country that is even worse off in that regard than our own country? What does this tell you about where we are heading and the kind of framework that the Administration wishes to set up?
*The Author is the holder of a MSc. Degree in Business Management, with concentration in Global Finance, Financial Markets, Institutions & Banking from a UK university of international standing.
