– among areas where oil revenues will be used

By Lisa Hamilton

THE People’s Progressive Party/Civic (PPP/C) has pledged that it will prudently use Guyana’s oil revenues to develop various sectors, advance access to quality services and create more opportunities for all citizens to make a living.

Some of the plans to which Guyanese can look forward are targeted cash transfers, contract renegotiation with oil companies, rapid infrastructural development and job creation.

This was the message of Minister of Public Works with responsibility for Finance, Juan Edghill, at the presentation of Guyana’s 2020 Budget in Parliament today. The Second sitting of the 12th Parliament is being held at the Arthur Chung Conference Centre (ACCC) under strict COVID-19 guidelines.

Minister Edghill said that while the pandemic has dampened the overall look for oil prices, Guyana, new to the industry, still stands to benefit from the sector which could eventually regain its footing with solid oil prices.

Already, Guyana has received over US$150M from its three completed million-barrel lifts and royalties received, while it expects its fourth lift by November.

Through a well-managed oil-and-gas sector, Minister Edghill said that the next generation of Guyanese will be guaranteed a brighter and better future. He assured the nation that the government will employ a strategy for the sector which deals with the critical areas of a framework for proper management of the resource, transparency and accountability and securing benefits for Guyanese.

Meanwhile, to ensure that the oil resources are managed well, the PPP/C will immediately engage the oil-and-gas companies in better contract administration/renegotiation; establish an arm’s-length Sovereign Wealth Fund (SWF) insulated from political interference and define, by legislation, how funds will flow from the SWF into the budget, and the purpose for which they will be used.

The government will also ensure that expenditures are transparently determined and go through the parliamentary process; establish a model Production Sharing Agreement (PSA) based on industry-wide standards and best practices and train thousands of Guyanese at every level to create a national core of managers and a skilled workforce.

To ensure transparency, the government intends to uphold the Santiago Principles of transparency and accountability and Extractive Industries Transparency Initiative (EITI); criminalise non-disclosure of receipt of funds from oil revenues; ensure annual reports from the government are laid in the National Assembly detailing oil revenues and expenditures; ensure there are regular audits and involve civil society in the monitoring of compliance and accountability.

When it comes to where Guyanese can expect to see the oil resources directed, the minister named these areas as education and health care; social and economic infrastructure, targeted cash transfers, particularly to the elderly, children, poor and other vulnerable groups; tax reductions for Guyanese business and individuals and job creation.

Minister Edghill said: “We will ensure that oil revenue works for all Guyanese, and is spent on improving people’s lives and in support of job creation.”
He noted too that the government will implement policies to strengthen and grow the workforce in the tourism sector to cater to the influx of visitors expected as a result of the oil-and-gas sector. The soon-to-be constructed Hospitality Training Institute, he added, will help to prepare Guyanese to secure the many new jobs which will spring up in the sector.

On the other hand, the non-oil economy contracted by 4.9 per cent with significant declines recorded across many major industries. This was in part due to the protracted General and Regional Elections, but was also a result of the significant reduction in economic activities after the introduction of several emergency measures in the second quarter to curb the spread of COVID-19.