The cash flow reality of the Norway money

May 13, 2012 AFC Column, Features / Columnists

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By Dr. Asquith Rose and Sasenarine Singh

In life, time and tide wait for no one and the poor, elderly, youths and the working class in particular are always anxious to know when President Ramotar and his Team will end their propaganda stunt over the budget cuts and get on with running the country. The AFC stands ready to work with the PPP Government to progress the nation’s development agenda, but on terms and conditions that encourage accountability, transparency and value for money.
The AFC has a genuine interest in sitting down in the tripartite committee to deal with the burning issues for the people – jobs, their economic well-being, ensuring that food is on the table of every family, strengthening the institutions of Guyana to deliver more for the people among the other basic needs of the neediest. The AFC believes that it is a complete waste of taxpayers’ money for Mr. Ramotar and his twenty (20) plus ministers to be traversing the country to spread their propaganda rather than progress the people’s agenda.
Contrary to the PPP’s blatant propaganda, the AFC has categorically stated that over 90% of the 2012 budget reduction relates to the Norway money and should not be budgeted until the probability of collection improves.  Our Guyanese-based technical advisors suggested conditional budgeting which is the prudent policy to take when you are unsure about the collectability of revenue.  In response, like a typical school bully, the PPP chooses to play politics with sound advice.
In this regard, after studying that technical advice, we would like to add some value by explaining this entire LCDS cash flow reality.
Norway has committed to release US$250 million over five years into our Consolidated Funds if two things are done:
1.    Guyana can meet forest preservation benchmarks;
2.    The Government of Guyana can secure approval for projects from the Multi-stakeholder Steering Committee ( the Steering Committee);

 

The Facts
•    So far Guyana has met Step 1 for 2011 and will qualify for 2012, so we can say with high certainty that we have partially met the conditions on US$110 million (G$22 billion) from Norway.  But where is this money?
•    This money sits in an escrow account in Washington DC, administered by the World Bank.  The World Bank can only release funds to Guyana if, and only if, Step 2 is concluded on these funds. Can any rational person justify that we have this money in Guyana?
•    This money is beyond any measure of control from the PPP.  At this point in time, the PPP does not have the instrument of authority to instruct how and when these funds can be distributed. Why operate like a “cake shop” and plan for something you have zero control over?
•    How can these funds be released?  The PPP must submit feasible and bankable proposals to the Steering Committee.  So if the PPP want to go on a propaganda parade, then they must explain to the people how many proposals were submitted to the Steering Committee and when and at what stage of review are these proposals?
•    In the final analysis, the PPP has zero control over the disbursement of these funds.  Budgeting 101 clearly tells us that “if you do not have control over the funds, you cannot budget for the funds”.
As a patriotic political force, the AFC stands ready to help the PPP draw down these funds, especially for the Amaila Hydro Project, and there is solid justification for this project.  Our main concern with this Project is the ballooning cost.
However, if a Public Procurement Commission is established, it will go a far way in softening up the Norwegians to vote for the release of these funds into the Consolidated Fund.  The AFC is even prepared to lobby for the release of these funds for the Hydro Power Plant if the procurement system can stand up to scrutiny.  All Guyanese want a reliably electricity system that is not dependent on fossil fuel and the AFC stands ready to work positively for such a reality.
But progress comes with responsible and dependable leadership. It is time Mr. Ramotar and the PPP leadership act fairly and reasonably in how they follow and apply the law and the power that comes with the office they occupy. It is time for the Government to be serious about achieving good governance, serious about transparency, and serious about empowering institutions such as the Office of the Ombudsman and the Auditor General Department, among others.
The AFC contends that this is the least the PPP can do to restore the trust of the people, bring some semblance of respect to government and win the hearts of the Norwegian decision-makers to help us all mould this nation. To do otherwise will continue the mistrust and lack of confidence in the minority PPP administration.

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