Jordan and the NRF

Sep 08, 2019 Letters

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Dear Editor,
The reply by Caretaker Minister Winston Jordon to my concerns about the management structure of the Natural Resource Fund has not diminished my fears, indeed, they have grown tenfold.
Jordan states “However, many of the most highly regarded SWFs, including those of Chile and Norway, follow a “Manager Model,” whereby the Ministry of Finance is responsible for overall management, and the Central Bank is responsible for the operational management, of the SWF” let me be blunt so as to leave no room for doubt, Mr. Jordon’s words and deeds as Minister of Finance, with regard to the $18 Million USD signing bonus make this the worst possible model Guyanese could accept. When asked if Guyana had received a signing bonus, Jordan stated that such a claim is ‘a figment of the imagination’ and that there is ‘no agreement for any bonus’. Further, he noted that the Government did not request such a bonus. All three of these statements are bald-faced lies. I maintain that any fund that has a ‘Manager’ such as Jordan, who cannot be trusted, has to be structured differently.
Jordan states “in preparing the legislation for the NRF, the Government considered best practices, which included ensuring that the NRF would comply with the Santiago Principles” this coming from a member of the Granger administration that refuses to comply with the basic principle of Rule of Law is laughable. I have no confidence that any ‘principle’ would ever be complied with by Granger and his ‘Cabinet’. Guyana’s Chief Justice ruled “Cabinet stood resigned immediately upon passage of the No-confidence motion” for a short time Jordan et al. shamefacedly called themselves a ‘plenary’ but soon returned to the title of ‘Cabinet’. The best principles in the world are useless without integrity. No one who sits in Granger’s ‘cabinet’ can lay claim to public trust ever again.

Jordan says “the Government is pursuing membership of the International Forum of Sovereign Wealth Funds, in 2019, and will be attending its upcoming Annual Meeting in Alaska, USA, in October. These actions send strong signals of our commitment to ensure that we hold ourselves to the highest internationally recognized standards for SWFs.” Again, Mr. Jordan is talking about standards while ironically talking about attending a meeting in October, which is well past even the most generous date when he or any member of the Granger administration could claim to represent Guyana at any forum. Mr. Jordan will not be recognized by any country, person or forum as a representative of Guyana after 18th September 2019, He (Jordan) and his ilk may hide behind GECOM’s skirts locally, however, there is no such institution to give you succor internationally.

Editor, I believe I have provided enough reasons above to dismiss the claim that the “manager model’ will serve the people of Guyana, however, even the other provisions such as “the inclusion of a Public Accountability and Oversight Committee which comprises representatives from a broad cross-section of society” gives no comfort, for who chooses what sections of society are represented? Will it be the ‘Manager’? Will Caretaker President Granger weigh in with a few unilateral appointments? Will we have a situation such as has emerged at GECOM where a single illegal unilateral appointment rendered a constitutional body impotent and dysfunctional? Given the track record of Granger, I have no confidence in any committee he or Jordan set up now or in the future.
Jordan goes to great lengths to point out that “withdrawals from the NRF, Section 28 of the NRF Act states that the National Assembly, and not the Minister of Finance, shall be responsible for approving the withdrawal from the NRF that shall be included in the annual budget…The maximum withdrawal is known as the Economically and Fiscally Sustainable Amount, which is bound by the smaller of an Economically Sustainable Amount (ESA) and a Fiscally Sustainable Amount (FSA)” and that “A Macroeconomic Committee, comprising representatives of the Government, Bank of Guyana, Private Sector Commission and Opposition, is responsible for providing the Minister with a recommendation on the ESA, taking into account the effects of additional spending on Guyana’s economic competitiveness.”
As with the signing bonus, Winston Jordan is engaging in sophistry, here is the section of the act that says “in the opinion of the Minister”
25. (1) The Economically Sustainable Amount is the maximum amount that can, in the opinion of the Minister after taking into account the recommendations of the Macroeconomic Committee established under section 20, be withdrawn from the Fund for the next ensuing fiscal year without diminishing the competitiveness of Guyana’s economy.
The FSA and the ESA are essentially determined by the Minister of Finance and taken to a National Assembly of which the Minister’s government would enjoy a majority of 33 or more of the votes. I suspect that Jordan can and will pack the committee with pliant cronies a la James Patterson and run roughshod over the other representatives. The NRF is littered with mathematical formulas and loopholes that can easily be exploited by an unscrupulous administration, was it not Jordan and his colleagues who attempted to hoodwink a nation that 34 votes were needed for a majority of 65? Jordan did not correct his colleagues on such simple math but expects the nation to trust him with complicated formulas and/or respect for rules and laws? I prefer to err on the side of caution where our nation’s future is concerned.
Editor, let me close by saying that even after elections I will not be in favor of any Sovereign Wealth Fund model that concentrates the decision-making power in one hand. An SWF must be set up to withstand the vagaries of democracy, which we know can lead to periods of poor stewardship and even dictatorship. The Granger NRF is designed to be the opposite of a good SWF, which essentially, must be free of political control. I can assure you that when (not if) the administration changes hands, Jordan will be among those making profuse denouncements of the structural flaw and loopholes in the Natural Resource Fund. The NRF as legislated relies on the integrity of actors, the CCJ also did in its consequential orders of July 12th and yet ‘cabinet’ sits every Tuesday since.
Respectfully
Robin Singh

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