Vice President reiterates commitment to transparent use of oil funds

Vice President, Hon. Dr. Bharrat Jagdeo says the Government is committed to ensuring the transparent use of its resources in the Natural Resource Fund (NRF) – the investment account into which all of Guyana’s oil revenues would be deposited.

The Vice President made this statement during the During the Inaugural Virtual Diaspora Conference on Saturday.

Dr. Jagdeo said the Government intends to embrace accountability in the use of fund, in response to a question about whether it intends to replicate the Norwegian model of the NRF here.

“We have always been in favour of one principle in the Norwegian Fund, and that is that the Fund must be managed in a professional manner; in an arm’s length way from political interference. We are committed to that principle,” he said.

Notwithstanding this commitment, the Vice President also observed nuances in the Government’s position about the management of the fund.

“There is a level- the United States has a per-capita of US$67,000, say in Europe and UK, $40,000; our per capita GDP is $5,000. How do we get to $25,000 or $30,000 in the next ten years?” 

Against this, Dr. Jagdeo explained that the only way this goal can be achieved is through investing oil revenues in Guyana’s education, health and infrastructure sectors. He was keen to note that this investment is key to ensuring that the other traditional sectors are not impacted by Dutch disease.  In economics, ‘Dutch disease’ is the relationship between the increase in the economic development of a specific sector and a decline in other sectors.

“When you look at the magnitude of what we are receiving so far, and we’ll receive up to 2025, we’re receiving about US$300 million annually. That is a drop in the bucket.

Our infrastructure needs now, just to build a single bridge, the DHB, may cost us US$200 million. These resources, right at the beginning, have to be used in transparent manner to get us to a standard,” Dr. Jagdeo said.

The VP also reminded participants that while in Opposition, the People’s Progressive Party/Civic had been critical of the NRF, since it was passed after the December 21, 2018 no-confidence motion. He also pointed out that the former model promoted more of an arm-in-arm engagement with politicians.

Notably, Guyana’s NRF currently holds $43.1billion (US$206.6 million) including January’s royalty payment of US$8.3 million.