Acclaimed int’l NRF expert lauds transparency of Guyana’s oil fund law
Guyana’s Natural Resource Fund (NRF) law which was recently passed by the PPP/C Government, has been lauded by internationally acclaimed NRF expert Andrew Bauer for its “very high level of transparency”.
During an interview on Guyana’s Oil and You with Senior Journalist Kiana Wilburg Thursday, the NRF expert highlighted that the new oil fund is “even more detailed” than the Act that was illegally passed under the APNU+AFC Government.
How is the current oil fund more detailed? Bauer outlined a few elements, including what the fund is allowed to invest in, as well as the limitations on the amount of asset managers can withdraw. This fiscal rule is a significant improvement to what once stood under the previous Act. In his perspective, Bauer said that the complicated fiscal rules governing the former government’s Act were “haphazard” and as such, posed a challenge.
He was, however, quick to praise the Act in its current state for that he labels as “really great elements”. The expert stated further, that there are aspects in the new oil law that he has never seen in other countries, thereby lending to its superiority.
“It is so detailed and innovative and it will really help Guyana not invest in some of the crazy derivative instruments or art or commodities or whatever that a lot of the funds around the world speculate in. The Guyanese fund will not be allowed to do that,” the NRF expert outlined.
He continued, “There is also a very, very high degree of transparency in the fund. All of the assets in the fund will be made publicly available through the annual reports and financial statements.”
Notably, Bauer related that Guyana is one of the few countries in the world where an NRF makes sense. He referred to countries such as Kenya and Lebanon that have either created funds or are considering creating funds, although they were not necessary since the oil or mineral revenues are excessive.
“Guyana is already a resource rich country, but it will be even more resource rich and the huge amount of foreign currency that is going to come into the economy and is already starting coming into the economy will have some important economic impact.
Clearly Guyana needed a fund. It made sense to create a fund to stabilise fiscal expenditures, and to smooth spending over a longer period of time just than when the oil money is collected.”
More about Andrew Bauer
Bauer focuses on economic technical assistance and research to improve natural resource revenue management. His work includes advising governments and civil society on macroeconomic management, governance and accountability mechanisms and local content in the extractives and has worked in countries such as Lebanon, Libya, Ghana, Mexico, Mongolia, Uganda, Vietnam and Senegal.
Prior to joining the Natural Resource Governance Institute (NRGI) as a consultant, he served on Canada’s G7/8 and G-20 teams as an international economist at the Department of Finance, where he provided economic policy advice and participated in the planning and execution of the G8 and G-20 Summits, as well as preparatory finance ministerials during Canada’s host year.
He has held positions in government, nonprofits and the private sector. He has worked for Debt Relief International, UNICEF Canada, Transparency International – Kenya and the Commission on Human Rights and Administrative Justice (CHRAJ) in Ghana, among others. Bauer holds a M.S. in economics for development from Oxford University, where he won a thesis distinction for his work on the monetary transmission mechanism in Tanzania. He also received a B.A. in economics and international development studies from McGill University.