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The Ministry of Finance notes with interest an Op-ed by US Ambassador Perry Holloway, which appeared in the local dailies on Tuesday, March 13, 2018, captioned ‘Prioritising a Sovereign Wealth Fund, Preparing for Prosperity Now.’
The Ministry of Finance appreciates the spirit of the Op-ed, but wishes to make clear that the establishment of a Sovereign Wealth Fund (SWF) is already designated priority for the Government of the Co-operative Republic of Guyana (GCRG). We would also like to emphasise that it is the government and people of Guyana who will decide on the tenets of the SWF.
The suggestions contained in the Op-ed may give the impression that the GCRG and, by extension, the Ministry of Finance, under whose remit the drafting of the legislation for the SWF falls, has not made significant progress on this important piece of legislation. That impression is misinformed.
Consequently, the Ministry wishes to use this opportunity to remind the citizens and other stakeholders that the foundation for the establishment of the SWF began since 2016. This was announced more than a year ago at the opening of Guyana’s National Seminar on Preparing for First Oil, which was facilitated by Chatham House.
At that forum, the Minister of Finance made clear the Government’s intention to develop a Fund to govern the use of petroleum resources as a key legislative priority. He also highlighted the objectives of such a Fund as:
- to advance critical development and investment needs within the country (via the national budget);
- to address issues of stabilisation of the economy, and
- to ensure savings were made to guarantee inter-generational benefits from the extraction of this finite natural resource.
Those objectives reflect a comprehensive framework that will guide the prudent management of future oil revenues for the benefit of current and future generations, in keeping with the government’s agenda.
Therefore, government’s investment expenditure will be driven by the Green State Development Strategy (GSDS) – our national development plan – and, by the development priorities articulated and implemented through the National Budget, which has an established consultation cycle of its own.
In developing the draft SWF legislation, the Ministry of Finance is receiving support from the Commonwealth Secretariat. A green paper on the subject will be published in 2018, and consultations will occur subsequently. The legislation is intended to be laid in Parliament by the end of 2018.
It is important to note that as a new oil producing nation, Guyana is ahead of many countries, having already taken the initiative to establish a Fund of this kind. Even Norway, which today is promoted as a model country in petroleum resource management, did not create a Sovereign Wealth Fund until several years after its first oil.
This of course does not mean that the establishment of such a Fund is not immediately necessary, but rather, it demonstrates the government’s commitment to good governance, transparency and accountability, by ensuring that a legislative framework is in place to safeguard our national patrimony, prior to the commencement of oil production.
The Ministry of Finance values the comments from our bilateral and multilateral partners on the draft content of the SWF, and welcomes further engagement and support. However, we would like to recommend that our partners exercise restraint when pronouncing on Guyana’s national priorities, and to refrain from making premature statements on its petroleum resource management, given the existing challenges of managing expectations and avoiding the Dutch disease.
The Ministry of Finance welcomes direct engagement with our partners as we navigate these pivotal moments in the history of our country’s development.
Feature Address: The Opening Ceremony of the Public Policy Analysis Management and Project Cycle Management Training Programme
February 26th, 2018 Grand Coastal Hotel, ECD
Hon. Joseph Harmon MSM, M.P.
Minister of State
Mr. Tarachand Balgobin, Director of the Project Cycle Management Division, Ministry of Finance- Chairman, Mr. Reginald Graham; Consultant Coordinator, Caribbean Development Bank; Dr. Modeste- Chief Planning Officer, Permanent Secretaries, Regional Executive Officers and Heads of Agencies, Members of the Media, Ladies and Gentlemen. I wish to welcome you all on behalf of the Hon. Minister of Finance who was scheduled to this presentation, but is out of the jurisdiction at this time, to this opening ceremony of The Public Policy Analysis Management and Project Cycle Management Training Programme that is being conducted by the Ministry of Finance in collaboration with the Caribbean Development Bank. I am also pleased to be associated with this activity since the Ministry of the Presidency has responsibility for the Public Service including the training of Public Servants.
I must also congratulate the participants in this programme for having been selected; for having completed the online aspects of the course work, and for now being involved in the face to face workshops to complete training.
Your participation as the decision makers and senior technicians within the Public Sector in this programme that has been designed to suit our local circumstances will no doubt buttress our Government’s continuous efforts to effectively disburse and expend Government funds and execute programmes and Projects through the Public Sector Improvement Programme (PSIP), the management of which you will be expected to improve. Additionally, your new skills will be acquired at a time when Government is set to “Roll Out” several innovative projects through its Green State Development Strategy (GSDS) that are crucial for the sustainable development of Guyana.
I also wish to express gratitude, on behalf of the Government of Guyana to the Caribbean Development Bank for choosing Guyana as one of the three Caribbean countries to participate in this pilot training programme. Guyana’s Public Sector Improvement Programme (PSIP) is largely funded by international donor agencies like the Caribbean Development Bank, an institution with which Guyana has enjoyed productive and progressive relationship since becoming a member in 1970. This developmental partnership has seen Guyana benefitting from many loans and grants, administered through the Ministry of Finance. These funds are usually aimed at Social and Economic Infrastructural Projects such as Schools, Public Buildings, Roads and Water Projects; Providing Community Skills Training; and Support for Small and Medium sized Enterprises. The facilitation of training programmes such as these is a further form of much needed assistance to our developmental efforts.
Mr. Chairman, this activity is most welcomed because it is in keeping with our Government’s commitment to the creation of a highly skilled, professional public service and to build the capacity of our human capital. We believe that the Political Administration should set the Policy framework by conceptualizing policies for development and allowing the professional administrators and technicians to analyze, design and implement those policies to ensure maximum benefits to our citizenry and value for money.
Guided by this philosophy, President David Granger on August 17th, 2015 appointed a Commission of Inquiry into the Public Service, “To examine, advise and report on the Salaries, Conditions of Service, Training and other matters pertaining to the improvement of the efficiency of the performance of the Public service and the well-being of the public servants in the Public Service”. In the Commission’s report the entire Chapter 3 was dedicated to “Training and Staff Development”. This Chapter embodies a comprehensive analysis of the training needs of the Public Service. It is now public knowledge that the Commission has completed its work and the Government has embarked upon several initiatives to institutes the recommendations made in the report. That process is benefitting from the input of many of the participants here today.
Mr. Chairman, I wish to iterate that this training initiative is of significant importance to the Government of Guyana Public Service Reform Agenda, given the important role that the Public Service plays in implementing Government policies and delivering Government services to our people. However, we have inherited several challenges as it relates to the implementation of Government Polices, Programmes and Projects. Some of these challenges include monies being allocated under the Public Sector Improvement Programme (PSIP), which is the Government’s main mechanism for capital spending. In 2015 and 2016 significant sums allocated for developmental projects were not efficiently disbursed. Several contracts were poorly administered and some have had to be “Rolled-Over” or put on hold. There was also evidence that some of the Heads of Budget agencies within the Ministries were unfamiliar with the new procurement system.
This has prompted cabinet to initiative regular statutory meetings with Permanent Secretaries and Technical Officers from the Ministry of Finance to ensure efficient disbursement of Public Sector Improvement Programme (PSIP) funds and effective Monitoring and Evaluation of Projects.
At the most recent meeting with the Permanent Secretaries and Technical Officers held in January 2018, a review of spending for 2017, and discussions about work plans for 2018 was conducted. The review included an overall analysis of the Public Sector Improvement Programme spending for 2017; and project execution rates in 2017.
The review revealed that……..also coming out of that meeting was a work plan for 2018 which included: Preparation of Procurement plans for all agencies; a format for Public Sector Investment Programme (PSIP) monitoring reports; and a format for performance analyses. In addition, it was decided to provide compulsory training for relevant staff; and promote institutional strengthening. This included the establishment of Planning Units in all Ministries of Government
Mr. Chairman, this training initiative is yet another tangible indication of our Government’s commitment to: Improved Management of Public Finances; Timely implementation of Programmes and Projects; Greater Transparency and Accountability; Effective delivery of Public goods and services; Obtaining value for money; and efficient and effective allocation of our resources. Governments can have the most modern of Bureaucratic structures and the most advanced information and communications technology but without skilled human resources the delivery of Public Services will be ineffective.
In conclusion, I would like to once again thank the Caribbean Development Bank for partnering with us in support of this training programme, and to challenge each participant with the responsibility of giving his/her best to the information disseminated during the workshops.
It is now my distinct pleasure to declare this training programme on Public Policy Analysis Management and Project Cycle Management Training Programme officially opened.
Opening of Caribbean Development Bank (CDB) Public Policy Analysis Management and Project Cycle Management – Face-to-Face Training Programme
The Ministry of Finance in collaboration with the CDB is hosting a 5 week training programme to improve Public Sector Project Implementation and build capacity. More than 50 technical officers, Permanent Secretaries and REO’s are targeted.