USAID report highlights need for comprehensive plan to manage oil funds

Feb 18, 2022 News

Kaieteur News – The United States Agency for International Development’s (USAID) Democracy, Human Rights, and Governance (DRG) assessment for Guyana has highlighted among other things, the need for a comprehensive plan to effectively manage its oil wealth.
The report which was published mid-2021 also points to the need for cooperation between the two main political parties, the ruling People Progressive Party /Civic (PPP/C) and the main Opposition, A Partnership for National Unity and Alliance For Change (APNU+AFC) for proper management of the sector. The information based on USAID’s DRG Strategic Assessment Framework sought to identify key DRG opportunities and challenges in Guyana.
The report also provided a political economy analysis of reform supporters and opponents (both actors and institutions) within the DRG sector, and offered strategic recommendations that account for mission priorities, available resources, and the initiatives of other donors and stakeholders. The main conclusion of the exercise was that the broader context of consensus and inclusion are the underlying challenges for Guyanese citizens and impede the framing of a common vision of the country’s future.
Among the challenges which were identified was the absence of a National Development Strategy that accelerates democratisation of public institutions and spending. According to the report, the government and opposition parties must find non-partisan areas of cooperation reaching far beyond political parties to include technical experts and advocates for public spending on health, education, job creation and climate change risks.
The document noted that a participatory effort involving the public and private sectors for public input can build consensus and public confidence in the equitability of the plan. “Guyana is becoming a more important partner in the region for the US and other countries while at the same time Guyana’s political instability raises concerns that the country is unprepared for its newfound wealth without a plan to manage the new revenue and equitably disburse the financial benefits,” the report added.
It continued, “International experience shows that transparent oversight by national authorities is crucial to manage the risks that the oil and gas sector generates while maximizing the economic benefits. Effective governance of the country’s vast new wealth will be dependent upon prioritizing institutional reforms, strengthening the civil service and ensuring inclusive oversight of the country’s national development strategy.”
According to the DRG, the key challenges are improving the government’s accountability and transparency across the public sector and designing appropriate national development policies that deliver equitable services to all its citizens. As such, the assessment pointed out that “Inequitable distribution of oil wealth will exacerbate the deep disparities between regions and ethnic groups so social protection and cash transfers will become important for the country’s poorest and most vulnerable. The country can afford to provide the most basic social services to every citizen of the country.”
Moreover, the report added that the ruling PPP/C party and the APNU+AFC opposition coalition need to find a way to form a functioning democracy based on power-sharing rather than a “winner takes all” mentality. The DRG noted that this would ensure that the unprecedented wealth in oil reserves can be transparently and equitably managed for the benefit of all Guyanese. The assessment team conducted a robust desk review of articles and documents that reflect the most significant political and economic changes, donor priorities, and external drivers of change that have impacted Guyana in the period 2016-2021.
The DRG assessment report which calls for inclusion and cooperation between the nation’s leaders is being highlighted weeks after the government rushed to pass the legislation governing the oil account is in breach of transparency standards and an international agreement Guyana adopted since 2018 that speaks to the inclusion of the public, and access to information on the oil wealth.

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