All over the world, Sovereign Wealth Funds (SWF) are built on the foundation of a National Development Strategy specifically tailored based on the needs of the country. But, Guyana is looking to establish its SWF even before completing its development strategy.
Attorney at Law, Charles Ramson has pointed this out as a big mistake. He said that that is probably the reason government is so confused about the form the fund should take.
Ramson, who has a master’s degree in Oil and Gas Management, spoke extensively about the Green Paper at a recent press conference he hosted at Cara Lodge.
The Green Paper that Ramson spoke about is the APNU+AFC Government’s draft framework for the establishment of Guyana’s SWF which is being called the Natural Resource Fund.
Government intends to deposit proceeds from oil, gold and timber into that fund. Ramson said that this is a mistake and will create structural imbalances in the economy.
But he said that that is not the only major flaw of the Green paper. Speaking about the fact that there is no development plan, Ramson said, “The Green Paper constantly references the Green State Development Strategy which has not even been completed yet.”
He continued, “The fundamental and basic truth is your development strategy should be the first thing a government aggressively pursues. The moment it gets into power, any serious and competent government outlines its vision.”
Ramson noted that the APNU+AFC government has been in office more than three years and there is still no development strategy “so we are essentially marking time.”
Ramson told the media, “The strategy should be completed first so we can know what our development priorities are and based on that we can know what type of SWF we should have and establish a fiscal rule is adjusted over time as you complete those priorities.”