Call by WPA to suspend IDB loan ‘economic sabotage’ – Finance Minister

Finance Minister Dr Ashni Singh has described a Working People’s Alliance (WPA) call to suspend disbursal of an IDB loan as “economic sabotage”.

Following the February 11 approval of a US$17.2M Inter-American Devel-opment Bank (IDB) environment loan, the WPA on Sunday expressed concern about it being done in the absence of the National Assembly and the party is seeking a meeting with the local IDB office on it.

On Monday, Singh said he was extremely disappointed with the WPA stance. He said, according to GINA, that the loan granted by the Bank is in support of policy reforms.

“It’s attached to a number of institutional strengthening initiatives aimed at improving environmental governance and the discharge of our environmental responsibilities”, he said.

He argued that Guyana has “established credentials at the forefront of environmental leadership” and that the approval by the IDB signals that institution’s confidence in the work that Guyana is doing in the environmental sector.

Singh did not address the concern about Parliament being prorogued.

In its statement on Sunday, the WPA said it “views this loan with suspicion and disfavour given the recent High Court decision by the acting Chief Justice Ian Chang that the Minister of Finance Dr Ashni Singh has been unlawfully and unconstitutionally spending money that the country’s National Assembly had expressly disapproved,” the party said.

It pointed out that Guyana’s Governor to the IDB is Singh and questioned the timing of the loan and the motive and judgment of the Board in approving the loan on February 11. “The WPA is asking the (IDB) to publicly declare whether the loan has been disbursed and if not, to suspend its disbursement while the National Assembly is prorogued and in the consequential absence of any parliamentary oversight over public finances,” the WPA asserted.

The statement said that all moneys payable to Guyana, whether by loan or otherwise, have to be paid into the Consolidated Fund and can only be taken out from the Fund and spent by way of an Appropriation Act. “Obviously, no such Act can be passed while the National Assembly is prorogued or dissolved and any spending would therefore be further illegalities by the Minister and Governor of the IADB Dr. Ashni Singh,” the party said.

“The WPA reiterates our call to international and multilateral institutions to reconsider their relationships and financial dealings with the Government of Guyana during a period of prorogation and scheduled dissolution of the Parliament immediately prior to general elections,” the statement declared.

Meanwhile, WPA executive and economist Dr Clive Thomas says that Finance Minister Singh’s role on the Board of Governors of the Inter-American Development Bank creates a conflict of interest in the approval of the US$17.2M environmental loan.

Thomas told Stabroek News that while the WPA welcomes the loan to the country by the IDB there are some underlying concerns that need to be addressed. He said that it was a conflict of interest for Singh to be making decisions on loan approvals and disbursements when the minister would be well aware that Parliament has been prorogued by his government.

Thomas added that the timing of the loan approval was also suspicious. He pointed out that the loan was approved on February 11 and while the election date proclamations were gazetted on January 24, 2015 it was not until February 10 that the Official Gazette was delivered to the Office of the President, the Law Library, the Registry of the Supreme Court and the Parliament Library.

The Government Information Agency had said on January 26 that President Donald Ramotar had signed the proclamation declaring May 11, 2015 as the date for the elections and that they would be soon gazetted as stipulated by the Constitution.

The announced date is not official until it is published in the Official Gazette.

Given the local political climate, Thomas said that the IDB has a responsibility to not act in a way that would allow for possible irregularities in spending. He said that the recent High Court ruling which found the government’s spending of $4.5B violated the Constitution should showcase to the IDB that loans needed to be put on hold as there is currently no parliamentary oversight.

Thomas said that the fact remains that all loans will be the burden of the taxpayer and the timing of the loan approval and possible disbursements was odd. He said that the WPA was confident that given the circumstances locally the party’s concerns will be seen by the IDB as a formal complaint.

Thomas told Stabroek News that the party wishes to make it very clear that international assistance is welcome in the form of project and policy-based funding, but there has to be financial accountability.

The economist stated that there will be no excuse for financial lawlessness and it is imperative that spending of public funds be done under the constitutional framework and regulations.

Chartered Accountant and WPA member Christopher Ram told Stabroek News that the government should not be engaging in any borrowing arrangements while the National Assembly remains prorogued. He emphasised that the government is yet to dissolve Parliament and the opposition is yet to press the issue.

Ram stated that given the political climate the IDB is paying lip service to accountability and transparency. He said that now is the appropriate time for the IDB to put themselves to the test and their commitment to transparent and accountable transactions but they have now approved a US$17.2M loan in the absence of parliamentary oversight.

The loan was approved on February 11, 2015 and is the second of a two-part Programmatic Policy Based Loan (PBP) directed at strengthening the environmental sector in Guyana. The first part in the PBP series was approved on December 4th, 2013 for US$16.92 million.

According to IDB documents for the new loan, it will enhance the regulatory, institutional and monitoring structures to support the implementation of the Low Carbon Development Strategy (LCDS).

The objective of Component 1 – macro-economic stability – is to maintain a sustainable macroeconomic policy framework consistent with the objectives of the programme and the Policy Matrix. Component 2 aims at strengthening the implementation of the LCDS as the main regulatory instrument to establish an environmentally and economically sustainable development model for Guyana.

To support progress in the implementation of the LCDS, the second PBP requires that the Amerindian Development Fund be established with initial Guyana REDD+ Investment Fund (GRIF) funding, and that at least two new GRIF projects be approved and start execution, focusing on two sectors: public participation in general, and support to indigenous communities’ participation in particular.

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