PetroCaribe, other accounts for forensic audit- Finance Minister

May 26, 2015 News

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– “Saddened” by the “secrecy” that existed before

Finance Minister, Winston Jordan, said that information on the PetroCaribe deal should have been in the public domain a long time ago. He said that the issue of reporters now questioning him about it saddens him.

The PetroCaribe account among others is managed by the Central Bank.
He said, “The fact that this newspaper wants to know how much money was drawn down from the PetroCaribe account over the last few years and for what purpose, speaks to the secrecy that existed in the previous administration.”
He wants to promise that the Ministry of Finance and the others, will be more transparent in their affairs.
He said that A Partnership for National Unity plus the Alliance For Change (APNU+AFC) is committed to being a government of accountability and transparency. He plans to demonstrate this in his own Ministry and others under his purview.
He said, too, that the PetroCaribe Fund and others would be subject to a “forensic” audit to determine what amounts were really extracted, when these withdrawals took place and for what purpose.
Jordan said that he has received a file from the Governor of the Bank of Guyana, Dr. Gobind Ganga, and he will review it and disclose in a systematic way, pertinent information in relation to the PetroCaribe fund.
He stated that he has been conducting meetings with various officials, particularly the former Minister of Finance, Dr. Ashni Singh.
Jordan said that so far, the state of the economy seems to be in “reasonable shape” and that he has been promised a summary of the economy. The Finance Minister said that discussions have focused on projections for the growth rate, inflation, the international reserves, exports, capital programmes, debt with international agencies and projects in the pipeline.
He said that for the time being, he has no reason to doubt the integrity of the data provided to him by Dr. Singh.
The Finance Minister said that the international reserves have plummeted just as the party had predicted when it was in opposition, from US$835M in 2012, to some US$600M.
Once again, the falling price of gold seems to be one of the main reasons why the reserves declined, according to Jordan. The state of affairs in the gold industry was also blamed for the Consolidated Funds being in heavy overdraft.
The Finance Minister said that the forensic audit will reveal what really went down. He said, “It is the only way to go.”
The PetroCaribe deal signifies an alliance of several Caribbean member states, including Guyana, which purchase oil on conditions of preferential payment from Venezuela. The deal was launched in June 2005.
The payment system allows for purchase of oil at market value for five percent to 50 percent up front, with a grace period of one to two years. The remainder can be paid through a 17-25 year financing agreement with one percent interest if oil prices are above US$40 per barrel.
Under the deal, Guyana is supplying rice and using some of the outstanding oil monies to pay local farmers, through the Ministry of Finance and the Guyana Rice Development Board. The account for these monies are held and managed by the Central Bank.
But its Governor Dr. Gobind Ganga had told Kaieteur News that he is unable to disclose the details of the withdrawals and the current status of it.
The PetroCaribe deal is renewed annually and officials at this point are currently in talks with Venezuela to iron out arrangements for Guyana to supply the country with more rice.
The deal is usually referred to through the budget speeches and speaks to how much Guyana has been able to write off in terms of debt.
Economist Dr. Clive Thomas says that the PetroCaribe deal between Guyana and Venezuela may be well intentioned but lacks enough transparency. This view is one that was shared by the APNU+AFC when it was in the opposition.
Dr. Thomas believes that despite criticisms, in his view, it remains one of the most generous inter-governmental efforts to promote regional integration among poor countries, especially small ones.
The renowned economist said that Caribbean members of the initiative benefitted so much between 2005 and mid-2014, that he believes someone ought to have cautioned Venezuela to be more prudent in dispensing largesse to them at a time of high oil prices, and for them to have behaved more in a spirit of regional solidarity.
Dr. Thomas asserted nonetheless that the greatest weakness of the initiative is its lack of transparency, particularly in its management operations and provision of timely public financial information and records for all of its transactions in all of its participating member states.

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