…says TT economist who helped design Guyana’s NRF

By Vishani Ragobeer

TRINIDADIAN Economist, Dr. Roger Hosein, has said that Guyana’s oil revenues, held within the Natural Resources Fund (NRF), can be tapped into to boost the country’s response to the emergency situation arising out of the COVID-19 pandemic.

In March, it was reported that the Ministry of Finance has sent a request for US$5M to the World Bank to assist with local efforts geared at mitigating the impact of the novel coronavirus (COVID-19). Finance Minister Winston Jordan noted that this request was being processed, but in the meantime he was proactively seeking out other avenues of garnering funds to help boost the health sector. The use of the oil revenues in the NRF, he said, were perhaps a “last resort” given the stringent rules guiding withdrawals. Jordan, however, mentioned that under Article 27 (1) of the NRF act, there is a provision for the Finance Minister to request a withdrawal from the fund for emergency financing, in the event of the occurrence of a natural disaster.

This act defines a natural disaster as “… an earthquake, flood or hurricane or other caused by natural processes of the earth that has such a severe impact on the environment and the living conditions of the population…”. COVID-19 does not necessarily fall into this category, but even so, Dr. Hosein underscored that this NRF is still a viable option for Guyana, given the projected devastation from COVID-19. “I don’t see why it is that the term “other disaster” cannot be used in this emergency situation in order to access these funds,” said the economist, who helped with the design of Guyana’s NRF. .

According to him, if the US$5M request from the World Bank does not materialise, or the country is not able to secure funds from other sources such as the Islamic Development Bank or the Inter-American Development Bank quickly, then by all means, the country should utilise the funds in the NRF. “I urge the Guyanese government to act quickly, in this regard,” the economist said, “It either accesses the US$5M from the World Bank, or it uses its own resources from its NRF, seeking the appropriate permission (to access that fund) if it can.”

IMMEDIATE ACTION NEEDED

The economist also highlighted that since Guyana has a low level of income, the government should capitalise quickly on the avenues presented in order to mitigate the effects of COVID-19. In light of the coronavirus pandemic, the Trinidadian government indicated that it will be amending its Heritage and Stabilisation Fund (HSF)– that country’s version of Guyana’s NRF, which also saves some of the profits from the hydrocarbon industry to cushion the impact of COVID-19.

Cognisant of the delays following the conclusion of Guyana’s Regional and General Elections last month, Dr. Hosein acknowledged that Guyana may not have the leeway or flexibility right now to amend its NRF legislation like Trinidad to cater for the health pandemic. However, he did suggest that an appeal be made through the court, or the government should pursue whatever means necessary to access the fund for emergency purposes, if Guyana is unable to access the funds from the World Bank or otherwise.

Globally, the spread of the coronavirus has been increasing exponentially. Last week, the Pan American Health Organisation/World Health Organisation (PAHO/WHO) and the Ministry of Public Health projected that there would be 1400 cases of persons infected with the virus. However, due to a new study conducted, the bodies have revised the total to a mammoth amount of 20,000 cases by May 5. Guyana has, so far, been tapping into its consolidated fund in order to boost the health sector, and President David Granger issued sweeping executive orders to tackle the disease locally. As of April 1, however, Guyana recorded 19 confirmed cases of COVID-19 and four deaths.