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WEEKEND MIRROR 10-11 APRIL, 2021
Finance Minister outlines plan to develop Human Capital – during World Bank’s Ministerial Conclave S
enior Finance Minister Dr. Ashni K. Singh recently attended and addressed a Ministerial Conclave on Human Capital convened by the World Bank Group as part of the International Monetary Fund and World Bank Group’s 2021 Spring Meetings which are currently being held virtually. The Conclave was held under the theme ‘Investing in Human Capital for a Green, Resilient and Inclusive Recovery’. Minister Singh spoke on the topic of promoting economic opportunities while ensuring environmental and fiscal sustainability. His address focused on the country’s Low Carbon Development Strategy (LCDS) which is soon to be expanded and which will set out a comprehensive development agenda for the country along a low carbon trajectory. He also focused on the high priority being placed by the Government of Guyana on various
initiatives to promote human capital development. In his address, the Minister highlighted Guyana’s bright economic prospects as well as the country’s vulnerabilities and development challenges, emphasizing that Guyana is rich in natural resources, including oil, minerals, and forests that cover 85 percent of the country’s territory making its economic prospects currently very promising despite COVID-19 and domestic political issues which caused a sharp contraction in non-oil GDP in 2020. He reminded that even with the many challenges, Guyana is still the fastest growing economy in the world as a result of its production of oil, and will remain amongst the fastest growing economies in the next few years. “But we also face extreme vulnerabilities to climate change, as well as significant development challenges. We are well aware
of the magnitude of these challenges. They include avoiding the resource curse, promoting a strong and competitive non-oil economy, addressing our infrastructure gap, and improving human development outcomes,” Dr. Singh added. On the issue of environmental sustainability, Minister Singh highlighted the role of both the original LCDS as well as the soon to be expanded LCDS. He stated that “Guyana’s commitment to low carbon or green growth is longstanding. In 2008, we published what we believe was the first low carbon development strategy for a developing country. The LCDS reflected that Guyana is at the intersection of many different aspects of the climate challenge. On the one hand, our low-lying coast means we are heavily impacted by climate change.” The Senior Finance Minister then proceeded to high-
light examples of some of the impact on the country as a result of climate change. “In 2005, floods caused economic damage equivalent to 60 percent of GDP. On the other hand, our forests make a very substantial contribution in the global fight against climate change. The LCDS paved the way for us to join with Norway in 2009 in the world’s third largest international forest partnership under which the climate services provided by our forests were remunerated for the first time – making available US$250 million of performance-based payment for climate services to finance climate-friendly investments.” He posited further that Government is now preparing an expanded LCDS which will build on the original LCDS and outline a comprehensive low carbon development agenda for Guyana. Minister Singh assured the Officials that the Govern-
ment has placed the highest level of importance on investing in human capital development as he elaborated its emphasis on education. He explained that “despite the many competing calls on our finite fiscal resources, we are investing heavily in the social sector – education, health, etc. – as well as in facilitative infrastructure such as information and communications technology. For example, in education, we are investing heavily in early childhood education, universal primary and secondary education, improving access to and quality of tertiary education, strengthening technical and vocational education, improving learning outcomes at all levels, and ensuring lifelong learning – supported with the use of information and communication technology based on lessons learnt during COVID-19 – and all with the aim of improving production
and productivity as well as individual and household well-being.” He added that “on many of these initiatives we are collaborating with the Bank, and we expect the education sector to dominate our portfolio of projects with the Bank in the next programming cycle… this will be in keeping with our emphasis on human capital development both as an input to, and an outcome of, sustainable economic growth.” In concluding his presentation the Minister reiterated that his Government views human capital development “as both a critical prerequisite for and a critical objective of economic growth”. The Conclave on Human Capital saw participation from the World Bank Group President David Malpass, other senior executives of the Bank, as well as several Ministers of Finance from around the world.
Kwakwani residents urged to pursue opportunities beyond bauxite ‒ opportunities for training available
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wakwani residents have been urged by Labour Minister, Joseph Hamilton, to pursue livelihoods in other sectors to enhance their lives and develop their communities. The Minister was at the time addressing a small gathering at the Kwakwani Primary School during a recent outreach to several villages in the Upper Demer-
ara-Berbice (Region Ten). The residents were inquiring about the way forward for bauxite workers since the Russia-owned bauxite company RUSAL suspended its operations over a labour conflict back in January 2020. That impasse resulted in workers who had been laid-off, blocking the Berbice River, preventing the movement of the compa-
ny’s bauxite out of Guyana. “You cannot sit down and wait for RUSAL and bauxite. The information I received is that RUSAL might not be back here because RUSAL has been able to get a bauxite operation in Brazil that is more lucrative to them. They are able to produce bauxite three, four times cheaper than they were doing in Guyana…That’s why as leaders, we have to be careful about decision making,” he said.
Minister Hamilton also said Linden and Region Ten can no longer be regarded as bauxite areas, and that residents must now focus on the other sectors including agriculture, forestry, mining and tourism. At the same time, he noted that discussions are ongoing between local and international partners regarding taking over the company in the future. “I had a meeting with the Guyana Gold and Diamond
Miners about mining and they raised that they are engaging people at the level of UK as a conglomerate to put a proposal to the Government. I don’t know when, I don’t know how, I don’t know how soon,” he said. In the interim, the Labour Minister presented to the residents a range of opportunities for skills training through the Board of Industrial Training for youths, women and retirees. These include training in areas
such as small engine repairs, mechanics, plumbing, masonry, heavy-duty machinery operation, solar panel repairs, cosmetology, and garment construction. He also encouraged Friendly Society groups to regularise themselves so they can also benefit from training and access small loans and grants to undertake economic ventures. These groups can also bid for small government contracts.
Progress being made with finalizing Natural Resources Fund Act
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he Natural Resources Fund (NRF) Act, which is among several oil-related pieces of legislation, is at the Attorney General’s Chambers and will be subjected to a review by an expert who is currently being sourced through public tender. Attorney General and Senior Counsel, Anil Nandlall, in recent comments on the issue explained that the NRF Act is awaiting the procurement of an oil and gas expert or consultancy firm to scrutinise same. He noted that bids from both local and international consultants have already been received and are currently being examined by the National Procurement and Tender Administration Board (NPTAB).
It was previously disclosed in February of this year that over US$200 million earned in oil revenues is currently in Guyana’s Natural Resource Fund, with the latest payment made in January this year. Notably, Vice President Bharrat Jagdeo had made this disclosure during a press conference. He had explained that US$206.6 million (GY$43.1 billion) is currently in the NRF, including the latest royalty payment of US$8.3 million, which was received in January. “So far, US$21.2 million in royalty payments have been made into the fund. And there are four payments – US$4.9 million, US$3.6 million, US$4.3 million and US$8.3 million in royalty payments,
at different times – April 2020, August 2020, October 2020 and January 2021…and then from profit oil, we have March 11 (2020) – US$54.9 million; June (2020) – US$35 million, August (2020) – US$46 million and January 11 (2021) – US$49 million… so we now have US$206.6 million in the fund – US$185 million so far from profit oil and US$21.2 million from royalty,” he had said. All of Guyana’s oil revenues are being held in the NRF, which is banked at the Federal Reserve Bank of New York. However, this money has remained untouched, as the protracted political crisis that followed elections sabotaged any attempt to set up a system for withdrawing funds.
It is expected that once the Natural Resource Fund Act, which stipulates that various committees must be established to provide oversight for the fund, is reviewed, it will be brought to the National Assembly by the current Government. With Guyana emerging as an oil-and-gas-producing nation, this requires the building of human and institutional capacity; crafting and agreeing to some critical policies and legal measures; and pursuing strong support and coordination among a number of governmental and non-governmental agencies. President Dr Irfaan Ali has made it clear that monies garnered from Guyana’s oil and gas sector will remain untouched in the sovereign
wealth fund until a series of reforms are enacted to strengthen the Government’s regulatory infrastructure for the sector. “My Government is focused heavily on transparency and accountability. As you know, we have demonstrated this after the negotiations of the licence for the Payara. Not only did we make the agreement public, but we also made the environmental permit public, so nothing is done in secrecy…I’ve said before, there’ll be an arm’s length relationship with the politicians. We had international experts leading those negotiations and discussions… and, of course, the sovereign wealth fund is important, in terms of not only the securing and safeguarding [of] the
funds but also establishing the conditions and the circumstances, through legislation, on which resources will be used,” the President had said during an address to the Forecast on Latin America and the Caribbean Conference last year. In keeping with its manifesto commitments, the Government has pledged to implement a number of measures to ensure accountable and transparent management of the country’s natural resources including establishing an arm’s length sovereign wealth fund insulated from political interference and upholding the Santiago Principles of transparency and accountability, and the Extractive Industries Transparency Initiative (EITI).
