Sovereign Wealth Fund closer to reality- Minister Trotman

DPI, Guyana, Thursday, December14, 2017

Details of the long-anticipated Sovereign Wealth Fund (SWF) could be released to the public as early as the first quarter of 2018, Minister of Natural Resources, Raphael Trotman said.

Guyana has been receiving economic advice from the Oceans and Natural Resources Division of the Commonwealth Secretariat on the drafting of laws and the establishment of the institutions and fiscal rules for the SWF.

Minister of Natural Resources Raphael Trotman with Economic Advisor, Oceans and Natural Resources Division of the Commonwealth Secretariat, Dr. Daniel Wilde and Minister of Finance Winston Jordan.

Speaking to the Department of Public Information (DPI) today Minister Trotman said the government was part of a workshop hosted by the Commonwealth Secretariat, where a framework of the SWF was settled upon. The next step he explained, is taking the Bill to the Cabinet and later to the public by the end of March of next year.

Minister Trotman said he is confident of the steps taken thus far, particularly because Guyana is ahead of many countries in this process.

“While Guyana has not yet produced, it has the beginnings of the framework so that when production comes, the country is ready. Every bit of legislation pertaining to the sector will be shared with the public before we attempt to pass. Even in parliament, there will be a provision for more scrutiny,” he said.

Economic Advisor, Oceans and Natural Resources Division of the Commonwealth Secretariat, Dr. Daniel Wilde said he is impressed that the government of Guyana is setting up a SWF so early in the process, even before there is any substantial production.

According to him, there are many countries in the world that have been substantially producing for many years and did not set up SWFs until they were well into the process.

“The fact that the government here has had the foresight to look at the long-term and put the law and institutions and fiscal rules in place well before commercial production should be commended,” the advisor said.

Dr. Wilde said the team now has a solid draft which will see the realisation of the three objectives of the fund, including short-term stabilisation, substantial intergenerational saving and having enough money for the long-term economic development and its ongoing spending commitment.

He said the workshop was well received and saw participants from the Bank of Guyana (BoG), Ministry of Finance, the Guyana Revenue Authority (GRA), Ministry of Natural Resources and the Auditor General.

A SWF is defined as pools of money derived from a country’s reserves, which are set aside for investment purposes that will benefit the country’s economy and citizens. The funding for a Sovereign Wealth Fund comes from Central Bank reserves that accumulate because of budget and trade surpluses, and even from revenue generated from the exports of natural resources.

 

By: Alexis Rodney

 

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