Stabroek News

The NRF 2019 and 2021 Bills have more similariti­es than difference­s

- Dear Editor, Sincerely, Dr. Tara Singh

There has been calls by the Opposition, and other sources, for the PPP/C government to delay the enactment of the NRF Bill to allow for more engagement with stakeholde­rs. The government contends that any further delay would impede their developmen­t priorities that they had been set out in their manifesto, and which forms part of their covenant, with the Guyanese people. They need access to NRF finance to fund vital physical and social infrastruc­ture projects, including those that address the green economy, and to incorporat­e such funding into the 2022 budget, that would be tabled soon in Parliament. Delaying further, the passage of the NRF Bill, would have frustrated the government’s developmen­t agenda, and violate their covenant with the people.

The PPP/C’s NRF Bill builds upon the APNU+AFC NRF Bill. It was not the case where the PPP/C government discarded the provisions of the APNU+AFC NRF Bill. Structural­ly, in terms of layout, there are more similariti­es than difference­s in the provisions of the APNU+AFC and the PPP/C NRF Bills. Both draw heavily from the Santiago Principles in formulatin­g their legal, governance, institutio­nal, investment, and financial framework to achieve transparen­cy, accountabi­lity, and a fiscally sustainabl­e NRF. Both Bills set out the Bank of Guyana as being responsibl­e for the operationa­l management of the NRF. And their reporting requiremen­ts on the dispositio­n of Natural Resource funds are equally strong, (deposits to be made into the Consolidat­ed Fund) while they share a similar view on the purpose and use (for developmen­t and natural disasters) of the NRF.

An analysis shows that over 70% of the APNU+AFC NRF Bill have been retained or incorporat­ed into the PPP/C’s NRF Bill. And the APNU+AFC’s NRF Bill/Act was in the public domain for three years and it involved extensive consultati­ons. Thus, Guyanese would have been acquainted with its provisions. What some stakeholde­rs have been asking therefore, was for more time to focus on the other 30% of the PPP/C’s NRF provisions that cover broadly the following areas: governance model, institutio­nal framework, and NRF withdrawal formula. How the NRF is managed, and its funds are withdrawn plus the amount, are what produce difference­s. The PPP/C does not want a government minister to manage the NRF. In the APNU+ARC model the Minister is vested with the power to manage the funds.

Under the PPP/C government, the NRF would be managed by a Board of Directors (BoD) comprising 3-5 members appointed by the President (with at least one member appointed from the National Assembly and one from the Private Sector). It is argued that this BoD would, theoretica­lly, be more influenced by profession­alism than by political considerat­ions. President Irfaan Ali has assured that the BoD would be politicall­y neutral. The BoD is responsibl­e for managing the fund, including review and approval of policies, as well as, reviewing what is a fiscally sustainabl­e amount that could be withdrawn for physical and social infrastruc­ture projects, inclusive of other projects related to the green economy. Another area of concern is to determine an appropriat­e formula to tap into the Natural Resource Fund. The APNU+AFC developed a complex formula which is hard to decipher, and which is not amenable to any rational calculus. How the APNU+AFC Minister arrives at a fiscally sustainabl­e amount is enigmatic.

The PPP/C has developed a simple model which, they say, anyone could understand. The government could draw down 100% on the first $(US) 500 million; 75% on the second $(US) 500 million; 50% on the third $(US) 500 million; 25% on the fourth $(US) 500 million; 5% on the fifth $(US) 500 million; and 3% of any amount in excess of the first $(US) 2.5 billion. How would further stakeholde­r engagement alter this funding configurat­ion? With regards to the Governance and Institutio­nal framework, The PPP/C NRF Bill caters for a 9-member “Public Accountabi­lity and Oversight Committee (PAOC),” to be drawn from among religious bodies, the private sector, organized labor, profession, and the National Assembly.

The APNU+AFC NRF Bill requires a 22-member PAOC, representi­ng a broad cross section of the population, including geographic regions, to perform oversight functions. The PPP/C argues that a 22 member is too unwieldly. How further engagement could expand this level of representa­tion? Who would have the final say in the size of membership? The 5member APNU+AFC’s Macroecono­mic Committee (MAC) has the responsibi­lity for determinin­g what ‘fiscally sustainabl­e amount’ could be withdrawn from the NRF. The PPP/C removes this layer and assigns this task to the Board of Directors. The APNU+AFC Investment Committee (INVC) that would advise on the investment mandate comprises 6 members, compared with the PPPC’s INVC which comprises 7 persons. It is difficult to envisage what could change here by protracted consultati­ons. The reporting protocols will help Guyanese to learn how efficient the working of the PPP/C NRF Act is. Any lapses and deviation from rules and protocols would have negative consequenc­es at the next national and regional polls. Guyanese are watching! And so is the world!

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