Going after the oil fund is a charge on the future of lost interest, lost confidence, and lost cushion
I am always searching for grounds to agree with, and support, Vice President Jagdeo in his presentations, notwithstanding his addictions to character assassinations. The VP came out recently with a posture that makes sense, but his other actions go the other way, and represent the height of leadership unwisdom. These are the details. But first his own words. “You can’t speak about and lament the economy is getting more and more concentrated around oil revenue and that the future of oil revenue can be uncertain right because oil prices could collapse like they did in 2015 to under $30 a barrel.”
Yessir! Agreed, sir. Jagdeo continued, “Suddenly it collapsed from $120 to $30 a barrel and then (you) built out a recurrent expenditure that you cannot cut in such a situation because you are stuck with it and you build it out on this perception that you’d always have this money in the future” (KN, February 5). I salute the former president, current economist, and perennial flutist. He got that right.
Whatever the political opposition is calling for as a pay increase for public servants, it cannot be 50%. It would be helpful, more realistic, than 6.5%. But 50% is too much in one bite; I favour the incremental, some sliding scale that commences at 20-25%. Public servants deserve, could be able to manage, with 100%, 75%, 60%, even 50%, but any one of those percentages would still be too steep. They usher in their own perils. Easy does it is my recommendation. Not the trick pony of 6.5%, but a multiple of that insulting pittance. The same goes for geriatrics: not the parsimoniousness of $3,000 more monthly, but not to $50,000 in one swoop. But the encouragement of $7,000 and to $40,000. Now for the departure. Yes, oil is volatile. Then why is he spearheading the extended bingeing on debt? The new debt levels would still have to be serviced, a recurring bite on the budget, just like increased public service emoluments,
about which he is ultra-cautious to the point of paralysis.
Oil prices are choppy and unpredictably. So why go after the oil fund with a reckless pillager’s mentality, as though it is losing value while in storage? That’s a charge on the future too: lost interest, lost confidence, and lost cushion. It can be accurately said that the oil fund is a national trust fund, and the first priority of any prudent perspicacious steward is to preserve the corpus. Jagdeo has already shown where he is with these. Discouraging. The meager approach in pay increase for public servants should be matched by similar discipline in borrowing and restraint from boring huge holes all over the oil fund tank. I could listen then, even endorse reluctantly. Jagdeo knows a little about oil prices, and it is sobering, so why barrel down the borrowing road and be so bent on raiding the oil fund piggy bank?
On the one hand, he and his government are all for going slow with money for those who need it. In the next breath, Jagdeo is breaking land and sea records to borrow money from the Chinese, the Saudis, and the Yankees (if he can get from the latter). In the dying gurgles of that same breath, the government is pawing at the oil fund, stripping it of substance and staying power. Less than a half billion cushion left to keep Guyana afloat, should the very concern that he has rightly identified (oil prices on a downward spiral) materializes. He cannot speak about a healthy and viable economic governance lifestyle while gorging on the fat of the land, plus avoiding the mandatory exercises of mind and body. If that is too thick, they try this: Guyana cannot stuff itself with the poisons of too much debt and withdrawals, but hoping to be able to answer the bell when oil is in a tailspin.