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Guyana risks losing oil revenues of the the Sovereign Wealth Fund  held in NY Bank without legislation in force —Ram

 

 

 

 


By  Kaieteur News

GEORGETOWN
Petroleumworld 09 24 2021

Some 31 months after the passage of Guyana’s Natural Resources Fund Act and its subsequent assent by then President David Granger in January 2019, the only thing active about the Fund, commonly referred to as the Sovereign Wealth Fund (SWF), is that it continues to generate controversy.

At least, this is according to eminent chartered accountant and attorney-at-law, Christopher Ram, who in his most recent writings under the rubric, ‘Every Man, Woman and Child Must Become Oil-Minded’—published on his chrisram.net outlet—contends “The Natural Resource Fund Act is not in operation.”

Qualifying his arguments, the prolific civil rights activist noted that more than a year after the PPP/C regained power on August 2, 2020, and more than two years after its assent by then President Granger, the Natural Resource Fund Act is not in operation, since no commencement order has been issued to bring it into force.

To this end, Ram contends, “there is, therefore, no effective or legal requirement that the oil money or any part of it should go into the account being held in the Federal Reserve Bank of New York.”

The Attorney said, “such a vacuum is dangerous, irresponsible, and raises some grave questions.”

Ram has since posited, Government is now left with three principal options when it comes to the Act – appoint a date bringing it into operation, repealing it with no immediate replacement, or, to give effect to its own preference, repealing and replacing it.

He suggested, “having not brought the Act into operation for an entire year, it is difficult to see the Government doing so now…And in any case, doing so has implications and consequences: not only to acknowledge and validate an “unlawful Act”, but agreeing to its restrictions on expenditure, which governments generally regard with disfavour.”

Ram further posited that the government’s second option is not only not practical but is likely to cause some concern among the international community.

He explained saying “if the Act is repealed with no replacement, the proceeds of royalty and profit oil would go straight into the Consolidated Fund, ready to be spent” and as such “that would defeat the whole purpose of inter-generation equity, a foundation principle of Sovereign Wealth Fund.”

By process of elimination, he observes, “that leaves us with the third option. But that can prove to be a political minefield. There is little in the country that passes for an opposition, but Guyanese take their patrimony seriously, and for a sizable part of the population, oil has now replaced the Kaieteur Falls as our iconic national symbol – for better or worse.”

As such, Ram contends the situation now places the Government in a quandary since “it cannot for much longer delay action on the Natural Resource Fund Act, which it may want to think is really unlawful, having been passed by a lame-duck Parliament, which it felt compelled to boycott.”

The Natural Resources Fund Act was passed in the National Assembly during the “lame duck” post No Confidence motion administration—“a session boycotted by the PPP/C which had successfully brought the No Confidence motion.”

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