Investment Committee’s mandate is financial not political

Dec 11, 2024 Features / Columnists, Peeping Tom

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Peeping Tom…

Kaieteur News- There’s nothing quite as uniquely absurd as when someone misinterprets their job description. Imagine hiring a chef for a fine-dining restaurant, only for them to march into the dining room, wagging a spatula, demanding to know why you dared to order your steak medium rare instead of medium well.

Now, transpose that image to the Investment Committee of Guyana’s Natural Resource Fund (NRF), and you’ve got yourself problems. Problems of overreach!

The NRF Investment Committee has an unambiguously defined mandate. They are the guardians of the leftovers, tasked with the noble responsibility of ensuring that the portion of the Fund not withdrawn by the government is invested wisely and in line with international best practices.

Their job? Maximize returns and minimize risk.  Nowhere in their Investment Mandate — or even in the fine print — does it say that they have the authority to question how the government spends the revenues withdrawn. But, as with any good committee, there’s always those that may not agree. But that does not mean that they are in the right.

Suppose a member of the Investment Committee, decides that it is the duty of the committee to demand an account of the government’s spending or at least to demand that the Board of the Fund asks the government to justify its requests for withdrawals. They might pound the table, perhaps invoking terms like “fiscal prudence” or “moral oversight,” but the reality remains as plain as daylight. They’re out of their jurisdiction.

The Act doesn’t provide the Investment Committee with a whistle, let alone the authority to blow it. Withdrawals from the NRF are determined by a formula—yes, a mathematical equation, not unlike the ones most of us forgot after high school algebra. This formula ensures that the money withdrawn is predictable and perhaps, even sustainable.

Once the funds are withdrawn, the National Assembly becomes the proverbial referee, ensuring that the government doesn’t splurge on golden toilet seats or midnight partying flights to Dubai. If any oversight is required, the Assembly handles it with parliamentary gusto.

What makes this situation so delightfully absurd is that the Investment Committee has, arguably, one of the cushiest gigs in government. Their remit is straightforward: manage what’s left, keep it safe, and aim for a decent return. Yet, for some unexplained reason, some might believe their role extends into the realm of monitoring public expenditure.

The natural question arises: what should well-meaning Committee members do if they harbour strong opinions about government spending? The answer is simple—choose another line of work. Perhaps they’d find fulfillment as a member of Parliament, where they can pontificate on budgets to their heart’s content. Or, better yet, they could launch a blog. And herein lies the brilliance of Guyana’s NRF framework. The roles are neatly delineated, like lines in a colouring book. The government handles the crayons and decides how to spend the withdrawals. The National Assembly scrutinizes and holds the government accountable. And the Investment Committee? Their job is to keep their focus on colouring within the lines of risk-adjusted financial returns. Simple. Elegant. Foolproof!

If there’s a member of the Investment Committee who still feels compelled to “pronounce upon the remit of the government,” they’d do well to remember that stepping beyond their mandate isn’t just unhelpful—it’s also a bit awkward. Imagine being the person in a meeting who earnestly raises their hand to ask how the withdrawn funds are being spent, only to be met with a room full of confused stares and the gentle shuffle of papers. The silence that follows would be deafening.

Ultimately, the Investment Committee’s mandate is a financial one, not a political one. Their job is to ensure that the Fund’s investments are sound, diversified, and lucrative enough to meet Guyana’s long-term development goals. It is not their place to hover over the government’s shoulder like a nosy neighbour peering through the blinds, nor is it their job to act as a fiscal moral compass. That’s the domain of the National Assembly—a body elected, not appointed, and therefore accountable to the people.

The Investment Committee of the NRF should stick to their knitting—or, in this case, their investing. Their role is vital but circumscribed, like a well-written sonnet. To any would-be over-reacher, the advice is simple: read the Act, reread your mandate, and, if all else fails, try Sudoku. It’s less stressful and, most importantly, doesn’t involve meddling in things that are none of your business.

So let the government spend as it sees fit, within the parameters set by law and under the watchful eyes of the National Assembly. Let the Investment Committee stick to its spreadsheets and asset allocation charts. And if any Committee member finds this unsatisfying, they might consider enrolling in a course on “Staying in Your Lane 101.” Whatever they choose, one thing is certain: the line between investing and policymaking exists for a reason, and it’s not meant to be crossed, no matter how good the intentions.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)   

 

(Investment Committee’s mandate is financial not political)

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• investment committee, Investment Mandate, National Assembly, Natural Resource Fund, Peeping Tom

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