Ali tells BBC: Using oil resources as handouts is detrimental, not the route Guyana will go

Sep 13, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – During an interview with the British Broadcasting Corporation (BBC) recently, President Irfaan Ali underscored Guyana’s commitment to avoid using its oil wealth as handouts as he alluded to the detrimental consequences such an approach can have on the nation’s future.

On Monday, the BBC published Senior Journalist, Gideon Long’s interview with the Head of State. During the comprehensive interview, President Ali discussed various facets of Guyana’s oil and gas resources and he also outlined the nation’s forward-looking strategies.

When pressed on the crucial issues of accountability, transparency, and the notorious “resource curse,” President Ali was unequivocal in acknowledging the pitfalls that have befallen other oil-producing nations. He made it clear that Guyana is determined to learn from these past mistakes and that the country is striving to chart a different course.

He articulated how revenue generated from the oil and gas sector could be a game-changer for Guyana. It offers the opportunity to accomplish ambitious projects that were once beyond reach, he said. However, he also emphasized the inherent responsibility that comes with this newfound wealth – the responsibility of ensuring greater transparency and accountability in its management.

“To do this, though, we have to ensure that there is greater transparency and accountability in the management of the resources,” President Ali said. To this end, he stated that using the resources as handouts is popular in the short term, however in the long term; it is detrimental to the country and is not the route his administration will take.

He also mentioned that the government has taken measures to ensure greater accountability and transparency of the country’s oil resources. “First of all, we have set up the Natural Resources Fund, which is governed separately and apart from the executive. Secondly, we have set in the law a condition that if the Minister of Finance does not declare the revenue that has been paid into the fund within a stipulated time from receiving that revenue, he can face up to 10 years in prison; that is in the law. All the resources that are used from the fund to be invested in the country have to pass through the parliamentary system and get parliamentary approval,” the President said.

Kaieteur News has reported on the Natural Resources Fund Act (NRF Act) which the People’s Progressive Party/Civic (PPP/C) Government passed in the National Assembly in December 2021. The legislation gives the government total control over how the oil money is to be spent, instead of enacting an independent Petroleum Commission.

The key legislation was hurriedly passed in the National Assembly amid an in-house protest staged by the Opposition Members of Parliament, who were clamouring for the then proposed Bill to be sent to the Special Select Committee for consultations to be conducted before the key legislation was made into law. Other members of civil society had also echoed this call but the administration ignored these views and rushed to pass the Bill. Despite the public debate, President Ali, had, mere hours after the raucous session, formally assented to the Bill, thereby bringing it into law— with the final step being its publication in the Official Gazette.

Meanwhile, President Ali during the recent BBC interview stated that Guyana is looking at the experiences of several oil and gas countries. He noted that his administration will develop a model that is applicable to Guyana. “With the type of publicity that the country is getting, there are great expectations from the people themselves. We have to ensure that the expectation is aligned with reality because we are now producing 400,000 barrels of oil per day, and that will increase to 1.2 million barrels,” the president said. To this end, he explained that with the increase in oil production, there will be a significant difference in revenues for the country.

He continued, “We have these great expectations, so the model we want to develop is one that is carefully crafted, meeting our development needs, but also taking into consideration the best practices of countries out there.”

President Ali’s stance on the use of Guyana’s oil revenue contradicts recent comments made by Vice President Bharrat Jagdeo. Two weeks ago, Jagdeo indicated that oil money was benefiting indigenous communities and the people of Guyana through cash handout initiatives. The Vice President made the assertion during a presentation on the Low Carbon Development Strategy 2030 during the recent National Toshaos Council (NTC) 2023 conference which was held at the Arthur Chung Conference Center (ACCC) at Liliendaal.

On August 30, this publication reported that after advocating that money from the oil and gas sector cannot be used as cash handouts and that the oil revenues would focus on infrastructural development, Vice President Jagdeo told indigenous leaders at the conference that the oil money is benefiting them and their communities through the ‘Because We Care’ cash grant and other government initiatives.

During a ‘question and answer’ segment which followed Jagdeo’s presentation, a resident of Jawalla Village, Region Seven, raised a concern on behalf of one of his villagers who had asked how indigenous people are benefiting from the oil money. “People say Guyanese are not benefiting more…so let me address a couple of categories,” the Vice President responded. He said that the oil money is being used for the $40,000 per child ‘Because We Care’ cash grant, the $13,000 increase for pensioners who now receive $33,000 monthly, funds allocated to part-time government workers, and increased wages for public servants like teachers, policemen, soldiers, and others.

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• Bharrat Jagdeo, British Broadcasting Corporation (BBC), consequences, detrimental, President Irfaan Ali, Vice President

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