The Minister has too much power over an oil fund – US Analyst
US analyst Arthur Deakin
Kaieteur News – One red flag in the framework for ensuring transparent management of Guyana’s natural resource revenues is the fact that the Finance Minister holds too much power over the oil reserves, said Arthur Deakin, Analyst at American Market Intelligence (AMI ).
AMI, a management consulting firm, has been providing insights that unlock opportunities in Latin America through market intelligence, research and analysis.
During his appearance last week on Kaieteur Radio’s Guyana’s Oil & You program with Senior Journalist Kiana Wilburg, Deakin commented on Natural Resources Fund (NRF) legislation, established through a bill passed in January 2019 by the administration David Granger. Deakin said the current structure of the NRF allows the Minister for Finance – a position currently held by Dr. Ashni Singh – get the final say on how the money is spent from the fund. This is despite the fact that it must receive parliamentary approval.
Deakin was keen to point out that this gave the current administration too much control and not enough independent oversight. “I think what it means is a proper regulatory and financial oversight framework and oversight. That is essential to avoid catastrophic consequences, ”he said adding that, to ensure transparency and avoid any political coercion, it is essential that ministries have a certain level of independence from the Cabinet.
When asked if Guyana needs to change its current regulatory framework model to remove the strong oversight of the Finance Minister, Deakin responded positively.
“I think there is room for improvement,” he said. “I wouldn’t say all the laws are bad. There are definitely some parts that are positive and there are definitely controls in place to ensure proper spending of that money. But at the moment, it’s too involved in politics and at the moment that’s not a good sign for future development. “
The US Analyst also considered that the Ministry of Finance (MoF) also appoints the critical committees of those members who, by law, are responsible for ensuring that the money spent is properly supervised. One of these bodies includes the Public Accountability and Oversight Committee. The absence of these committees is a red flag and does not go hand in hand with transparency and accountability, Deakin said.
While in Opposition, Vice President Dr. Bharrat Jagdeo has argued that the Granger administration has delayed passing the Natural Resources Fund Act so long as it was passed during a time when the People’s Progressive / Civic Party (PPP / C) considered the Government illegal.
The Act was passed after a December 21, 2018 confidence motion.
Jagdeo had said that the PPP / C would quickly repeal and replace the law when assuming office “with another model that reflects some of the principles we will outline in our manifesto, [namely] Santiago’s Principles of Transparency, and Norwegian-type control, set the fund’s control at a distance from the politicians. ”
But nearly five months since he swore, this has not yet been done.