Gov’t should be happy NY Times report didn’t show turmoil in oil sector

-Jagdeo

Bharrat Jagdeo

Government should be embracing the recent divisive New York Times report, ‘The $20 billion question for Guyana’ for not showing “the turmoil” that exists in the fledgling oil sector and “its lack of direction,” Leader of the Opposition Bharrat Jagdeo says.

“They should be embracing this, apart from the criticism of the portrayal of Guyana,” he said at a press conference he hosted on Wednesday at his Queenstown, Georgetown office. Jagdeo said he disagreed with the first part of the article because he believes that “many journalists from the developed world come here with the sole purpose of making us look like backwater countries and that we are on the precipice of civil war and ethnic conflagration, when we have in our country greater stability than those countries from which many of them come from.”

He added, “We disagree with any unfair portrayal.”

However, Jagdeo said he agreed with the paragraph in the report that said foreign bank developers had told the government that legislation to create a sovereign wealth fund lacks sufficient regulatory controls to avert corruption and that the legislation is in limbo. The Ministry of Finance took offence to the claims in a statement it issued, while saying that it was not the case.

“Actually, it is the case. The legislation is in limbo,” Jagdeo said. “It was promised three years ago and until now we do not have it. It is an accurate portrayal of what is happening with the legislation.”

However, Jagdeo took issue with the portrayal of the government, saying it was very benign. “They should be praising this gentleman. What has happened is that he did not deal with all of the other things that we in Guyana know of,” he said, while noting the government’s secrecy over the revised contract with ExxonMobil for a year and a half, and in its handling of the US$18 million signing bonus it received.

Jagdeo said that the report did not deal with the model of the Petroleum Commission, which would give the minister all the powers. He said it also did not deal with elements of the contract which Guyana has problems with, and questions that have been raised about the pre-contract costs, among other things.

Jagdeo also noted that the reporter got “an assertion” from President David Granger “that they will auction the future [oil] blocks.”

The opposition had been calling for the auction of future blocks, Jagdeo said. “They refused to make a commitment to us in Guyana. They said they had to hire consultant to say whether they should auction the blocks but they can make that commitment to a reporter from the New York Times but not to Guyanese people.”

Jagdeo said he believes that “if we do not make the right decisions, oil will not really benefit our people.

From the model of the legislation mentioned in the same article on the Natural Resource Fund, which government proposes to create, Jagdeo said, it is to be managed by the Bank of Guyana and overseen by a committee that encompasses several independent interest groups, including a representative nominated by the Leader of the Opposition.

“We do not want politicians, that is ourselves, to manage this money. This fund has to be independently, technically managed, not by politicians and stored by the Central Bank. We have a problem with that model. It departs with best practices, like [in] Norway and the other countries, where they have an independent group that manages this. Even the model that they are talking about will present a lot of problems for us because Jordan can call the Central Bank and get some money anytime he wants it,” he said. “This response by the Ministry to the New York Times leaves us even more concerned about the kind of model they are working on,” he added.

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