Guyana Focus
Part 1 of 2
While Guyana’s proposed Sovereign Wealth Fund (SWF) can potentially minimize the chances of the country’s sudden oil wealth bring squandered, there are no guarantees that the fund will be immune from mismanagement and corruption.
Arguably, the temptation for corruption could run high when oil cash begins to flow. In similar vein, the temptation to spend excessively can also over-ride rational decision making if transparent, objective based processes are not established ahead of the flood of oil revenues.
Success of the SWF will depend on the level of control the government has over the fund; how the fund is managed and who manages it; the policies and mandate of the fund; and the expertise and experience of the managers of the fund.
Incidentally, ever since Guyana discovered oil some three years ago, calls to establish a SWF have come from a myriad of local and foreign sources with two primary objectives - one, either to get a piece of the management contract to run the fund; or two, as a result of concerns that corruption, mismanagement, and politically motivated decisions will lead to the oil wealth being squandered or misappropriated.
Heeding to calls for the SWF, the APNU-AFC coalition government announced at the end of June that draft legislation to establish the fund has been prepared with the assistance of the Commonwealth Secretariat and through consultations with various experts.
According to Minister of Finance, Winston Jordan, he was mandated by cabinet to submit the draft legislation to the Attorney General with the goal of converting it into legal language. Once completed, the legislation will be presented to cabinet for discussion and for potential amendments before being made available to the public for consultation.
Incidentally, there is no mystery surrounding SWFs. These funds are commonly established by commodity-based economies which have accumulated excess foreign earnings from exports; in the case Guyana, from future oil revenues. However, two countries, Singapore and China have established SWFs from steady fiscal surpluses and foreign reserves accumulation, instead of commodity revenues.
Currently, oil producing countries such as Kuwait, Abu Dhabi, Norway, Saudi Arabia, Russia, Chile, and Oman, and Uganda are among the nations that channel funds from commodity royalties into SWF’s. According to the Sovereign Wealth Fund Institute, SWFs held US$7.4 trillion in assets under management as of September 2017. Of this amount, US$4.2 trillion were held by oi and gas related funds.
Though they have a common purpose, SWFs can have many different definitions and objectives. According to the International Monetary Fund (IMF), “SWFs are a heterogeneous group and may serve various purposes.” They are basically a pool of capital that is controlled by the government or government related entity. The assets may be managed by the government or an unrelated entity with the goal of generating a reasonable rate of return that is greater than the risk-free rate.
While they might appear to be complicated, other than being sizeable in terms of assets, SWFs are no different from an individual investment account where savings are invested for use on a rainy day, for emergencies, to acquire other big ticket items such as a home, car or other property, or to meet the objectives of long-term goals such as retirement.
Depending on the amount of wealth the individual has, he/she may choose to manage it on their own or employ one or more financial advisor or other investment professional to do so. These professionals typically establish an investment policy on how the individual’s money will be managed to achieve their investment goals.
If the individual chooses to squander his/her excess income on luxury or other unnecessary goods and services rather than save it, then the individual could very well not have enough money for emergencies or other necessities; or if he/she loses his/her job or becomes ill and does not have a regular income, they can find themselves in dire financial straits.
The same analogy can be applied to Guyana’s SWF. The country is expected to earn more revenues than it needs from oil. Therefore, the excess revenues will be invested by the SWF to meet current and future needs.
Given that the price of oil is volatile, the fund can also be used to buffer revenue shortfalls when prices are low, without disrupting the economy – in a similar manner to a stabilization fund. Trinidad & Tobago’s SWF, the Heritage and Stabilization Fund, is a classic case of an SWF which could not prevent the country’s economy from declining dramatically when oil prices slumped almost two years ago.
Regardless of the stated goal of a SWF, it will not be unusual for the government to use the funds to meet its political rather than the country’s economic agenda. Guyana’s history of corruption or perceived corruption raises numerous questions about how excess oil revenues will be used – prior to being put in an SWF.
One major weakness in Guyana is the non-existence of a development plan, which leaves the door open for spurious projects whose contribution to the economy could end up being infinitesimal. Again, Guyana has a history of failed projects which have not materialized due to inadequate planning.
Therefore, it would be prudent to establish an economic development plan which prioritizes the development agenda of the country based on a comprehensive analysis of its needs and capabilities. This way, there can be an approved laundry list of projects which could be funded by proceeds from the SWF – if the funds are to be used for development purposes.
While hopes are high for an SWF, it could be many years after 2020, when the first barrel of oil begins flowing, before Guyana’s SWF grows to a material size. The country currently has almost US$1.7 billion in combined domestic and foreign debt and has been running current account deficits financed by borrowing over at least the past five years. At a minimum, the current account must be in a surplus position before the SWF is funded, followed by the repayment of outstanding loans.
Oil revenues might also be used to fund current development initiatives, instead of loans, which means that much of the excess revenues will be used in the normal course of business and will not be added to the SWF.
Therefore, while Guyana’s SWF would eventually come on stream, the optimism about being rich, with the ability to self-fund its capital needs and establish a sizeable SWF, is still some time away. The noise surrounding the establishment of the SWF is therefore somewhat premature. Incidentally, the noise stems from a lack of confidence in the government’s ability to prudently manage and operate the SWF.
In the meantime, setting up the structure and mandate of the fund, along with its governing and/or oversight entities – if done in a transparent manner - would set the stage for a successful SWF.
At the end of the day, although the government will own the assets of the SWF, it should remain at arms-length to the fund itself and leave its management and operation to an independent entity.
If done properly, the SWF would ensure that the expectations of the masses are met from the country’s new found wealth. This, will turn be a huge boost to the government.
Incidentally, ever since Guyana discovered oil some three years ago, calls to establish a SWF have come from a myriad of local and foreign sources with two primary objectives - one, either to get a piece of the management contract to run the fund; or two, as a result of concerns that corruption, mismanagement, and politically motivated decisions will lead to the oil wealth being squandered or misappropriated.
Heeding to calls for the SWF, the APNU-AFC coalition government announced at the end of June that draft legislation to establish the fund has been prepared with the assistance of the Commonwealth Secretariat and through consultations with various experts.
According to Minister of Finance, Winston Jordan, he was mandated by cabinet to submit the draft legislation to the Attorney General with the goal of converting it into legal language. Once completed, the legislation will be presented to cabinet for discussion and for potential amendments before being made available to the public for consultation.
Incidentally, there is no mystery surrounding SWFs. These funds are commonly established by commodity-based economies which have accumulated excess foreign earnings from exports; in the case Guyana, from future oil revenues. However, two countries, Singapore and China have established SWFs from steady fiscal surpluses and foreign reserves accumulation, instead of commodity revenues.
Currently, oil producing countries such as Kuwait, Abu Dhabi, Norway, Saudi Arabia, Russia, Chile, and Oman, and Uganda are among the nations that channel funds from commodity royalties into SWF’s. According to the Sovereign Wealth Fund Institute, SWFs held US$7.4 trillion in assets under management as of September 2017. Of this amount, US$4.2 trillion were held by oi and gas related funds.
Though they have a common purpose, SWFs can have many different definitions and objectives. According to the International Monetary Fund (IMF), “SWFs are a heterogeneous group and may serve various purposes.” They are basically a pool of capital that is controlled by the government or government related entity. The assets may be managed by the government or an unrelated entity with the goal of generating a reasonable rate of return that is greater than the risk-free rate.
While they might appear to be complicated, other than being sizeable in terms of assets, SWFs are no different from an individual investment account where savings are invested for use on a rainy day, for emergencies, to acquire other big ticket items such as a home, car or other property, or to meet the objectives of long-term goals such as retirement.
Depending on the amount of wealth the individual has, he/she may choose to manage it on their own or employ one or more financial advisor or other investment professional to do so. These professionals typically establish an investment policy on how the individual’s money will be managed to achieve their investment goals.
If the individual chooses to squander his/her excess income on luxury or other unnecessary goods and services rather than save it, then the individual could very well not have enough money for emergencies or other necessities; or if he/she loses his/her job or becomes ill and does not have a regular income, they can find themselves in dire financial straits.
The same analogy can be applied to Guyana’s SWF. The country is expected to earn more revenues than it needs from oil. Therefore, the excess revenues will be invested by the SWF to meet current and future needs.
Given that the price of oil is volatile, the fund can also be used to buffer revenue shortfalls when prices are low, without disrupting the economy – in a similar manner to a stabilization fund. Trinidad & Tobago’s SWF, the Heritage and Stabilization Fund, is a classic case of an SWF which could not prevent the country’s economy from declining dramatically when oil prices slumped almost two years ago.
Regardless of the stated goal of a SWF, it will not be unusual for the government to use the funds to meet its political rather than the country’s economic agenda. Guyana’s history of corruption or perceived corruption raises numerous questions about how excess oil revenues will be used – prior to being put in an SWF.
One major weakness in Guyana is the non-existence of a development plan, which leaves the door open for spurious projects whose contribution to the economy could end up being infinitesimal. Again, Guyana has a history of failed projects which have not materialized due to inadequate planning.
Therefore, it would be prudent to establish an economic development plan which prioritizes the development agenda of the country based on a comprehensive analysis of its needs and capabilities. This way, there can be an approved laundry list of projects which could be funded by proceeds from the SWF – if the funds are to be used for development purposes.
While hopes are high for an SWF, it could be many years after 2020, when the first barrel of oil begins flowing, before Guyana’s SWF grows to a material size. The country currently has almost US$1.7 billion in combined domestic and foreign debt and has been running current account deficits financed by borrowing over at least the past five years. At a minimum, the current account must be in a surplus position before the SWF is funded, followed by the repayment of outstanding loans.
Oil revenues might also be used to fund current development initiatives, instead of loans, which means that much of the excess revenues will be used in the normal course of business and will not be added to the SWF.
Therefore, while Guyana’s SWF would eventually come on stream, the optimism about being rich, with the ability to self-fund its capital needs and establish a sizeable SWF, is still some time away. The noise surrounding the establishment of the SWF is therefore somewhat premature. Incidentally, the noise stems from a lack of confidence in the government’s ability to prudently manage and operate the SWF.
In the meantime, setting up the structure and mandate of the fund, along with its governing and/or oversight entities – if done in a transparent manner - would set the stage for a successful SWF.
At the end of the day, although the government will own the assets of the SWF, it should remain at arms-length to the fund itself and leave its management and operation to an independent entity.
If done properly, the SWF would ensure that the expectations of the masses are met from the country’s new found wealth. This, will turn be a huge boost to the government.
Georgetown – Former House Speaker, Ralph Ramkarran believes that now is the time for Guyanese to be offered a different kind of political party. In his most recent writings, Ramkarran argued that the need for a third political force has become necessary since the major ones have failed the nation in several ways.
Speaking to the current dilemmas of the major forces, he pointed out that the People’s Progressive Party/Civic (PPP/C) has suffered a major electoral blow where its most popular and experienced leader, Bharrat Jagdeo, would not be able to lead as the PPP’s Presidential Candidate at the 2020 elections. It must now look for a fresh face.
He said that Guyana is also faced with deteriorating economic conditions and the one seat majority of the APNU+AFC Coalition.
Compounding this he said, is the fact that both parties have failed to establish inclusive governance, even though they were staunch advocates for the concept when in opposition.
Speaking to the current dilemmas of the major forces, he pointed out that the People’s Progressive Party/Civic (PPP/C) has suffered a major electoral blow where its most popular and experienced leader, Bharrat Jagdeo, would not be able to lead as the PPP’s Presidential Candidate at the 2020 elections. It must now look for a fresh face.
He said that Guyana is also faced with deteriorating economic conditions and the one seat majority of the APNU+AFC Coalition.
Compounding this he said, is the fact that both parties have failed to establish inclusive governance, even though they were staunch advocates for the concept when in opposition.
Taking these and other factors into consideration, Ramkarran said that Guyana needs a new party with a programme of unity as a way out of the debilitating, ethno-political controversies and insecurities, which have dominated its politics and have bred only suspicion, antagonism and political unilateralism.
The commentator opined that this third party can do so by recognizing the existence of the two major parties, the support they receive and seek as its fundamental goal to encourage these two parties to work together for the future of Guyana. Ramkarran contended that decades of political effort, including the mandate of the electorate in 2011, have all failed.
The popular columnist reasoned that the third party, if it wins a majority or plurality, will accept the task of government in order to prevent a constitutional crisis. Under the constitution, he said that the party obtaining a majority or plurality must hold the presidency. Until the constitution is amended, Ramkarran said that the party will be obliged to fulfill its constitutional mandate but, not being wedded to power, would propose a re-examination of this and other provisions. He said the difference is that, in accordance with its primary purpose, it will invite the other major parties to share in the government in accordance with their percentage of support.
“If a majority or plurality is not achieved, the third party will remain in opposition but will strongly advocate and agitate for the establishment of a unity government of the major parties. If the major parties recalcitrantly resist the call for unity, the third party will support the party that agrees to implement its policies of constitutional reform, leading to inclusive governance and for economic and social reform, including strong measures against poverty, crime and corruption.”
For decades, Ramkarran said that experts have concluded that the divisions created by ethno-political rivalries are major reasons for Guyana’s underdevelopment.
He said that the third party would not seek to replace the two major parties but rather, seek to make them winners, with both serving in government.
“The supporters of these parties will remain supporters and should not see it as a betrayal to support the third party, whose objective would be to ensure that there are no losers in elections. The third party must never fall victim to the lure of political office. It must have a higher purpose that resonates with the Guyanese people – unity.”
Ramkarran argued that the unity that will be created is now a vital necessity. He stressed that statesmanship has failed Guyana so far. The former House Speaker believes that electoral pressure must be brought to bear.
The commentator opined that this third party can do so by recognizing the existence of the two major parties, the support they receive and seek as its fundamental goal to encourage these two parties to work together for the future of Guyana. Ramkarran contended that decades of political effort, including the mandate of the electorate in 2011, have all failed.
The popular columnist reasoned that the third party, if it wins a majority or plurality, will accept the task of government in order to prevent a constitutional crisis. Under the constitution, he said that the party obtaining a majority or plurality must hold the presidency. Until the constitution is amended, Ramkarran said that the party will be obliged to fulfill its constitutional mandate but, not being wedded to power, would propose a re-examination of this and other provisions. He said the difference is that, in accordance with its primary purpose, it will invite the other major parties to share in the government in accordance with their percentage of support.
“If a majority or plurality is not achieved, the third party will remain in opposition but will strongly advocate and agitate for the establishment of a unity government of the major parties. If the major parties recalcitrantly resist the call for unity, the third party will support the party that agrees to implement its policies of constitutional reform, leading to inclusive governance and for economic and social reform, including strong measures against poverty, crime and corruption.”
For decades, Ramkarran said that experts have concluded that the divisions created by ethno-political rivalries are major reasons for Guyana’s underdevelopment.
He said that the third party would not seek to replace the two major parties but rather, seek to make them winners, with both serving in government.
“The supporters of these parties will remain supporters and should not see it as a betrayal to support the third party, whose objective would be to ensure that there are no losers in elections. The third party must never fall victim to the lure of political office. It must have a higher purpose that resonates with the Guyanese people – unity.”
Ramkarran argued that the unity that will be created is now a vital necessity. He stressed that statesmanship has failed Guyana so far. The former House Speaker believes that electoral pressure must be brought to bear.
The Pranav Hindu Heritage Cultural Centre will hold its 12th Annual Walkathon and Picnic at the Rowntree Mills Park (Finch & Islington) on Saturday July 7th, 2018 from 9.30am. This event is to support the Heritage programs and Cultural activities of the children in addition to promoting radiant health and fitness and a clean environment. The Pranav Ashram will provide all refreshments, snacks and drinks so everyone can freely enjoy a great day of outdoor fun and games. For more info, call Ashram 416-741-4335 or Mohini 416-219-6692.
Canal #2, Wales and Patentia annual picnic will be held on August 12th from 10 am to 8.30 pm at Milliken Park , Area B , 5555 Steeles Ave E, Scarborough. Bring your picnic basket and enjoy a fun day with friends and family. Contact Jason @ 416-498-8506; Townie @ 416-283-7639 or Nevil @ 416-755-5652.
Imdadul Islamic Centre will hold its annual picnic on Saturday July 21 at Ross Lord Park, Dufferin St entrance, area #2 (between Finch & Steeles). Sack race, tug-o-war, egg in spoon, three-legged race, cricket, hop in the sack. Prizes will be awarded. Bring your games, cameras, smiles. Call: 416-910-8954; 416-674-9516; 647-290-3371; 416-452-4437 or 416-636-0044.
Georgetown – With over ten women murdered at the hands of their partners, Berbice has recorded the highest number of domestic violence reports for 2017.
This is according to statistics revealed by the Guyana Police Force (GPF).
During 2017, 482 reports were recorded in ‘B’ Division, 306 in ‘A’ Division, ‘C’ Division had 457 reports, and ‘D’ Division 298, while 75 reports were recorded in ‘E’ Division and 60 and 109 reports respectively in ‘F’ and ‘G’ Divisions. These reports were predominantly made by women.
The Domestic Violence Prevention Centre (DVPC) says that most women will on average attempt to leave an abusive relationship between five and seven times, before successfully and permanently doing so.
It was highlighted by DVPC that many women make complaints to the police, but do not follow through with prosecution of the perpetrator.
In most instances, abused women would attend court and testify that they no longer wish to proceed with the matter; hence the case is dismissed against the defendant.
Just recently, police charged a man with unlawful assault after he allegedly stabbed his spouse several times with a knife and cuffed her about the body.
It was revealed to the court by the police prosecutor that the man is in the habit of abusing the woman. As such, the prosecutor requested that the man be remanded to prison.
That request was upheld by Magistrate Leron Daly who cited the victim’s safety as ground for remanding the man.
However, when the man made another court appearance two weeks later, the victim expressed her desire of not proceeding with the matter.
With a look of dismay, the Magistrate perused the case docket and asked the woman if she was sure she wanted to end the criminal proceedings.
The woman replied in the affirmative and told the Magistrate that she was unaware of the story making the news headlines.
Turning her attention to counsel for the defendant, the Magistrate inquired of the defendant’s plans regarding the welfare of the woman. The lawyer told the court that his client was willing to move from the house that he shared with his partner.
In a similar case, a taxi driver went before another City Magistrate, this time for assaulting the mother of his two children. The man denied the charge and was placed on bail.
A few minutes after being escorted to the prisoner’s lock-up, the woman was seen paying the man’s bail after which they walked out of the court compound holding hands.
These are just few of the domestic violence cases that are dismissed daily in the Georgetown Magistrates’ Courts, due to the victim’s unwillingness to prosecute.
In some instances, the victims, mostly women, would signal their intention of not continuing with the matter before the charge is even read to the defendant.
Last week, a fisherman from Cornelia Ida, West Coast Demerara, who allegedly dealt the mother of his son several stabs was charged with attempted murder and was remanded to prison.
According to reports, the woman who is still hospitalized had taken out a protection order against the man. On the day of the stabbing, the man is alleged to have approached the woman and requested to kiss their son.
With the woman not complying, and after an altercation, the man allegedly stabbed the woman repeatedly.
It is the seventh month of the year, and so far, a dozen women have lost their lives from domestic violence related incidents.
A Berbice woman and her daughter are the latest murder victims. The two were killed after a man, their husband and father respectively, went berserk and hammered them to death.
This is according to statistics revealed by the Guyana Police Force (GPF).
During 2017, 482 reports were recorded in ‘B’ Division, 306 in ‘A’ Division, ‘C’ Division had 457 reports, and ‘D’ Division 298, while 75 reports were recorded in ‘E’ Division and 60 and 109 reports respectively in ‘F’ and ‘G’ Divisions. These reports were predominantly made by women.
The Domestic Violence Prevention Centre (DVPC) says that most women will on average attempt to leave an abusive relationship between five and seven times, before successfully and permanently doing so.
It was highlighted by DVPC that many women make complaints to the police, but do not follow through with prosecution of the perpetrator.
In most instances, abused women would attend court and testify that they no longer wish to proceed with the matter; hence the case is dismissed against the defendant.
Just recently, police charged a man with unlawful assault after he allegedly stabbed his spouse several times with a knife and cuffed her about the body.
It was revealed to the court by the police prosecutor that the man is in the habit of abusing the woman. As such, the prosecutor requested that the man be remanded to prison.
That request was upheld by Magistrate Leron Daly who cited the victim’s safety as ground for remanding the man.
However, when the man made another court appearance two weeks later, the victim expressed her desire of not proceeding with the matter.
With a look of dismay, the Magistrate perused the case docket and asked the woman if she was sure she wanted to end the criminal proceedings.
The woman replied in the affirmative and told the Magistrate that she was unaware of the story making the news headlines.
Turning her attention to counsel for the defendant, the Magistrate inquired of the defendant’s plans regarding the welfare of the woman. The lawyer told the court that his client was willing to move from the house that he shared with his partner.
In a similar case, a taxi driver went before another City Magistrate, this time for assaulting the mother of his two children. The man denied the charge and was placed on bail.
A few minutes after being escorted to the prisoner’s lock-up, the woman was seen paying the man’s bail after which they walked out of the court compound holding hands.
These are just few of the domestic violence cases that are dismissed daily in the Georgetown Magistrates’ Courts, due to the victim’s unwillingness to prosecute.
In some instances, the victims, mostly women, would signal their intention of not continuing with the matter before the charge is even read to the defendant.
Last week, a fisherman from Cornelia Ida, West Coast Demerara, who allegedly dealt the mother of his son several stabs was charged with attempted murder and was remanded to prison.
According to reports, the woman who is still hospitalized had taken out a protection order against the man. On the day of the stabbing, the man is alleged to have approached the woman and requested to kiss their son.
With the woman not complying, and after an altercation, the man allegedly stabbed the woman repeatedly.
It is the seventh month of the year, and so far, a dozen women have lost their lives from domestic violence related incidents.
A Berbice woman and her daughter are the latest murder victims. The two were killed after a man, their husband and father respectively, went berserk and hammered them to death.
Georgetown – Bandits broke into the well-known Guyanese jewellery store, L. Seepersaud Maraj in the Stabroek Market, and carted off a large quantity of jewellery, leaving the proprietors baffled.
Mr. Maraj told the news media that he could not immediately estimate his losses until he goes through his stock records, but they are certainly not less than GY$100 million.
“Sometime last (Monday) night or so they came into the safe. I am surprised because it took them a very long time – five hours minimum – because they broke into multiple security doors in the vault,” Maraj said.
Crime Chief, Assistant Commissioner of Police, Paul Williams said that no one has been arrested, but investigators were seeking to ascertain who have access to the market after business hours. There were no signs of a break-in at the Stabroek market itself. Police have so far learnt that the southern gate is accessible by the City Constabulary.
Williams, who visited the scene with a team of investigators from the Major Crimes Unit, said no one has been arrested or detained for questioning. No surveillance video recordings have been obtained.
The Crime Chief said the thieves might have gained entry to the stall by cutting a padlock before blow-torching the locks om the vault. Police have not yet obtained results from fingerprints captured from the scene.
Mr. Maraj told the news media that he could not immediately estimate his losses until he goes through his stock records, but they are certainly not less than GY$100 million.
“Sometime last (Monday) night or so they came into the safe. I am surprised because it took them a very long time – five hours minimum – because they broke into multiple security doors in the vault,” Maraj said.
Crime Chief, Assistant Commissioner of Police, Paul Williams said that no one has been arrested, but investigators were seeking to ascertain who have access to the market after business hours. There were no signs of a break-in at the Stabroek market itself. Police have so far learnt that the southern gate is accessible by the City Constabulary.
Williams, who visited the scene with a team of investigators from the Major Crimes Unit, said no one has been arrested or detained for questioning. No surveillance video recordings have been obtained.
The Crime Chief said the thieves might have gained entry to the stall by cutting a padlock before blow-torching the locks om the vault. Police have not yet obtained results from fingerprints captured from the scene.
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