Sovereign Wealth Fund Consultation commences – Proposed legislation for Parliament by end of 2016

Georgetown, Guyana – (November 25, 2015) The Government of Guyana, in collaboration with the Canadian High Commission and the University of Calgary’s School of Public Policy, today commenced a two days’ workshop on the establishment of a Sovereign Wealth Fund (SWF) for the country.

During the two days’ workshop, it is expected that the facilitating team will undertake a study of the legislative policies in place to see how best they can be improved to suit the Oil and Natural resources sectors.

Sovereign Wealth Fund Consultation commences

A Sovereign Wealth Fund (SWF) which is a state-owned investment fund, investing in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund are mostly funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank.

 President David Granger has always signaled Guyana’s intentions to create a Sovereign Wealth Fund from the revenues gained within its Extractive Industries. These fiscal structures are to be built taking the lessons learnt by other countries, and Guyana’s own unique context into consideration to form a strong framework.

Addressing the gathering of stakeholders at the event, which was held at the Arthur Chung Convention Centre (ACCC) this morning, Minister of Governance, Raphael Trotman said that for too long Guyana’s wealth has not been realized due to lack of enabling economies or human failing.

As such, he noted that the workshop will help to develop a framework which can not only develop Guyana’s potential but will ensure that the future generations of Guyana are able to benefit.

“In our infancy, we are told of Guyana’s vast potential yet most have passed on and moved away not experiencing the power of that potential. We are the inheritors of the patrimony of Guyana and it is our sacred duties to not only preserve it but to develop it so that when we bequeath it, we pass something that has progressed from potential to reality; from hope to substance. This workshop is part of that process that will prepare us for the heavy responsibility of managing the resource. It is part of a triune of initial engagements that introduces policymakers and beneficiaries, our citizens, to a better understanding of the nature of the resource, measuring its value, and utilizing it responsibly for this and future generations,” he said.

However, Minister Trotman stressed that it was important that Guyana take it one step at a time since if the country get this wrong, Guyana will be condemned to eternal poverty but if it is done right, then Guyana will last in perpetuity.

The Minister related that the new Government was cognizant of the things which must be done to protect the country’s resources and as such, has embarked on a process of resource management; one which seeks to recalibrate the country’s current performance and trajectory.

To this end, he said that it is expected that new fiscal and legal structures which can guide the sustainable exploitation of the extractive industries, will be among the measures being actively examined.

“Government envisions that before the end of 2016, model legislation will be laid in the National Assembly for scrutiny and debate and those nationwide consultations will ensure before, and during, the process of finalizing this policy through necessary legislation,” Minister Trotman said.

It was outlined that the framework will ensure that earnings from all of the country’s natural resources will be housed within resource wealth management funds to the benefit of all Guyanese in three key areas; savings for the future generations; budget support in times of economic downturns; and infrastructure development – such as roads to create better access and improve ease  of  trade  and  development  within  hinterland  communities  and  across Guyana, and schools that ensure meaningful investment in the country’s children.

In the meantime, Canadian High Commissioner to Guyana, Pierre Giroux, said that the Canadian government was pleased to have been involved in facilitating the team’s visit to Guyana. He noted that Guyana has always shared a strong relationship with the country and as such, it was pleased that the country has decided to take such a leap.

“I would like to congratulate the Government of Guyana for recognizing the timely and important workshop to discuss the possibilities of establishing a SWF for Guyana.  The Government of Canada is pleased to partner with Guyana on this great initiative. I am very confident that the very knowledgable team that we have from the School of Public Policy from the University of Calgary will be able to lend their knowledge and experience to the Government of Guyana to form a mutually beneficial extractive government policy,” the diplomat said.

He noted that Government has a central role as guardians of their country’s financial assets and creating wealth funds are a very appropriate way to uphold their responsibility.

“These funds have now become an important factor in economic development. We are pleased to see Guyana is being proactive in exploring the possibilities of establishing the SWF. The Government of Canada remains committed to working with this country in this initiative,” he added.

The facilitating team comprises three members namely Shantel Jordison, Bev Dahlby and Niloo Hojjati.

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