NO SANCTIONS AGAINST GUYANA

January 21, 2015 | By KNews | Filed Under Features / Columnists, Peeping Tom, Source - Kaieteur News

The non-release of funds by the European Union to Guyana is not an unexpected development. It is related to the prorogation of parliament, but does not constitute sanctions against the government.

This money that is being withheld is not funds that are being provided by the European Union out of a sense of generosity. No, it ismoney that the European Union is obligated under agreements to provide to the country.

Their failure to provide this money is due to practical difficulties that have been caused by the prorogation of parliament. Over the past ten years, the EU’s assistance to Guyana has been mainly channeled in the form of budgetary support.

One of the forms of support provided by the European Union is funds to assist sugar producers because of the unilateral decision to abolish the preferential markets that were afforded to sugar.

In an effort to allow sugar-producing countries to mitigate the downside to this decision by the EU, funds have been provided to support reforms in the affected sector.

These funds are therefore funds which legitimately should be given to GuySuCo. However, the European Union has also had a shift in terms of how they grant assistance.

The assistance is increasingly being channeled through what is known as budgetary support. That is, the EU would not give the money directly to GuySuCo, even though this may be the intended beneficiary. They will give it in the form of budgetary support because they favour parliamentary scrutiny of the funds they provide.

This is why when people claim that the government is providing subsidies to GuySuCo, they are missing the fact that financial transfers by the treasury to the sugar company would place the sugar corporation in a stronger position to meet the conditionalities necessary for it to receive budgetary support which is no aid, but an entitlement, because of the unilateral decision of the EU to abandon the Sugar Protocol.

Without support from the treasury, GuySuCo would be unable to qualify for the funds which it is entitled to, but which have to be challenged through budgetary support, that is, through the treasury, rather than being paid directly to the sugar corporation.

This policy has been controversial and subject to criticism, as was observed five years ago by the EU when it began a review of budgetary support.

There were concerns about the efficacy of such support and thus the EU initiated a worldwide consultation on this process.

The EU favours this support because budgetary spending is subject to greater parliamentary scrutiny. But it also allows for political conditionalities to form part of the aid process.

This is the principal objection to EU aid being channeled through budgetary support. A whole series of benchmarks and conditionalities must be met, and these can be used in an imperial manner to dictate government policy.

The EU in fact is a frustrating developmental partner, and it is only because they are not doing Guyana any favours by providing assistance that they should not be told where to stick their developmental aid.

This money that they are giving us is money that they owe us, because of their deviousness in revoking the Sugar Protocol.

But they want to make it seem as if the general assistance is divorced from the overall developmental assistance that they are obligated to provide because of the impact their cuts have had on regional economies.

The fact that they are not transferring the money is because parliament is prorogued and therefore they cannot transfer budgetary support to the government if this support is not likely, in their estimation, to be subjected to parliamentary scrutiny.

It has nothing to do with sanctions. The European Union is not withholding funds because they have decided to punish the government. They cannot provide the funds until there is a sitting parliament.

That will not happen, as we now know, until June.