Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia, is of the firm view that several important conditions must be fulfilled if Guyana is to truly reap the intended benefits of a Natural Resource Fund.
In an interview with the Guyana Standard today, Statia said that the appropriate budget and monetary policies need to be in place to support the establishment of such a Fund. He said that these budget policies would be needed to ensure that the operations of the Fund are well integrated into the overall public spending for the nation. Failing this, Statia said that a Natural Resource Fund could produce potential policy pitfalls, such as ill-timed withdrawals which have often been an avenue or loophole for corruption in many countries.
The Commissioner General said, “These Funds have to be underpinned by well-framed, governance arrangements too. These include the government as its owner setting the Fund’s objectives, Bank of Guyana as its operations manager and then the appointment of a committee to over look the assets and their investments. This structure is good and even used by others, but what is absent is a clear and effective accountability framework. That is what you need to get from the government.”
Statia added, “Governance structures are also supposed to have policies by now which typically articulate clear roles, responsibilities, and interrelationships between the different bodies involved in the Natural Resource Fund’s administration and management. You are also supposed to have by now, before the public, clear accountability procedures among the different levels of governance structures…”
Statia said that accountability frameworks and policies are important in order to prevent misuse of public resources and to gain public support for the Fund and its objectives. He opined that these arrangements can generate public support for saving resources rather than spending them, inform the public about the accumulated revenue, and provide the economic rationale for the buildup of the Fund.
The Chartered Accountant said, too, that transparency arrangements, in this regard, entail regular public disclosure of the investment objectives of the Fund, its funding, the withdrawals and spending on behalf of the government, the governance framework, and the Fund’s asset size and its allocation, and return.
The Commissioner General also stated that the success of any Natural Resource Fund is contingent upon responsible investment policies that are consistent with its policy purpose. He said these include care, skill, and prudence in investment practices, and a robust framework to identify, assess, and manage the risks of its operation.
