National Resource Fund Act will be culmination of lessons learnt by resource-rich countries over the past 100 years

Dear Editor, We note with disappointment the article in the New York Times by Clifford Krauss entitled `The $20 Billion Question’ We do not wish to address the laughably simplistic and selective description of our country as a land where children go to school in canoes, the lack of historical context and the author’s deficit of understanding and sensitivity towards Guyana; nor his blanket claim that “the civil service is corrupt,” which is an insult to the majority of hardworking and honest public servants.

We refer instead to his assertion that “foreign bank developers have told the government that legislation to create a sovereign wealth fund...lacks sufficient regulatory controls to avert corruption” and that “The legislation is in limbo.” This is not the case. The Ministry of Finance and the government are fully aware of the dangers surrounding resource-rich countries. We have extensively researched the issues of the pre-resource curse - where unrealistic expectations ahead of oil production result in demands for higher wages and government spending - and the other two pitfalls - the resource curse and Dutch Disease.

That is why in crafting the National Resource Fund Act (NRFA) we have asked for advice from several international institutions, including the International Monetary Fund, the World Bank and the Commonwealth Secretariat.

The proposed legislation specifically addresses two main issues: the stability of the economy to absorb increased government spending and economic activity; and the balance between spending on critical development projects and the long term goal of saving for future generations. This is laid out in a Green Paper which will be presented to the National Assembly.

The NRFA, which will be laid in Parliament before the end of the year as indicated in Budget 2018, is the culmination of many lessons learnt around the world by resource-rich countries over the past 100 years. Crucially it directly addresses the transparent handling of, and accounting for, the oil-related funds from depositing in the NRF to their spending which can only be done via the Annual Budget approved by the National Assembly. The fund itself is to be managed by the Bank of Guyana and overseen by a committee that encompasses several independent interest groups including a representative nominated by the Leader of the Opposition. Quarterly reports on its activity will be presented to Parliament. We are confident that the NRFA will fully address these legitimate concerns.

The overriding impression of the article is that the government and the country are hapless, and unable to deal with the new oil sector. We acknowledge there are serious human skills deficits, but the government is proceeding carefully and methodically towards First Oil. The National Resource Fund will be in place before 2020.

Despite the article’s narrative of a “Poor man wins the lottery; disaster ensues,” it also draws attention to some of Guyana’s most pressing challenges and raises the question of how we as Guyanese see ourselves and our country. It also calls to mind two quotes by the Nigerian novelist and short story writer Chimamanda Ngozi Adichie; “Show a people as one thing, as only one thing, over and over again and that is what they become” and “The single story creates stereotype and the problem with stereotype is not that they are untrue but that they are incomplete, they make one story become the only story.”

It is time that as Guyanese, we reject the single story being told about us, no matter who tells that story. We must look towards the future with hope in our heritage, in the legacies of our ancestors and in the path that is being crafted for us now. I urge Mr Krauss to take a closer look at our country, its proud and resourceful people and our resilience in the face of the odds. Yours faithfully, Wanita Huburn PRO Ministry of Finance