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July 26 ,2021

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Tarron Khemraj

Tarron Khemraj

Economist Tarron Khemraj has flayed the government for suggesting it may follow the Kazakh model for the still-to-be-created Natural Resource Fund (NRF) and he lamented the continued absence of oil production data in official statistical reports.

In his column in yesterday’s Sunday Stabroek, Khemraj said that it has been pointed out by several observers that the money from Guyana’s share of the oil profits in the Federal Reserve Bank of New York does not constitute a NRF but the account is merely holding the oil revenues at almost zero percent yield.

“Operationalisation of the Fund means, among other things, at minimum, the government hires qualified individuals to manage the monies and release funds consistent with its budget priorities subject to parliamentary approval. It also involves employing and housing at the Bank of Guyana (BoG) a skilled fund manager, macroeconomist and international corporate lawyer. Of course, there will also have to be a supporting team of individuals.

“For its part, the BoG has started to produce monthly statements and quarterly reports on the Fund. The central bank notes that by producing the reports it is fulfilling section 38 (2) of the Natural Resource Fund Act of 2019. Furthermore, the Bank notes that the reports are on the Natural Resource Fund even though the government is yet to formally establish it”, Khemraj asserted.

Nearly a year in office, the PPP/C government is yet to activate the NRF or to bring amended legislation as analysts say it doesn’t want to be constrained by the annual spending limits that such funds impose. The government has argued that it has not spent a dollar of the oil money but analysts say its actual and projected spending far outstrips what would have been expended from the monies in normal circumstances and is likely to rise even higher.

Khemraj cited a Stabroek News report where both President Irfaan Ali and Vice President Bharrat Jagdeo said they do not like the present NRF Act and favoured the model now in use in the Central Asian, former Soviet Republic of Kazakhstan. Jagdeo, he noted, went on to say that it would “be unconscionable to have children in the present day unable to attend school while the country saves for the future”.

Khemraj noted that the Kazakh model allows for greater discretion in drawing down monies for the national budget.

“The discretion is completely within the remit of a powerful President and Prime Minister, and not the technocrats employed to manage the Kazakh fund. On the other hand, the model used by Norway is more rule-based. The rule essentially draws from a theoretical model that was published in 1957 and authored by the celebrated economist, Milton Friedman”, Khemraj said.

In the same news SN article, Khemraj said that Jagdeo assures the public that whatever model the PPP/C government settles on, it will involve transparency and “input from local sectors”.

Khemraj however contended “It is not so clear what ‘input from local sectors’ means. However, mentioning the term transparency has to be supported by a credible commitment to transparency. It has to be backed up by supplying information and data to the society. Up to this date, the PPP/C government has not made any credible commitment regarding the operationalisation of the Fund”.

The economist also voiced deep concern over the absence of data on oil production.

“… I believe the biggest hidden piece of information that shows no credible commitment is the lack of production data. I find this shocking given how much the supposed GDP growth rate is thrown around by the government, the IMF and IDB. Are they just making up the numbers? How do they know that GDP grew by 26% in 2020 if oil production data are not reported to the Bureau of Statistics?

“The law requires that the Bureau – not the IMF, IDB or BoG – calculate Guyana’s GDP. This means that ExxonMobil, by law, must report the production data to the Bureau of Statistics. Several observers have reported great frustration when trying to obtain the production numbers. Mr. Alfred Bhulai of the Transparency Inter-national Guyana Institute (TIGI) and the folks from the Oil and Gas Governance Network (OGGN) have been asking for said numbers for some time. They have been stonewalled by various government officials, with the head of EPA being most skilful at evading”, Khemraj stated.

He added that surprisingly, the BoG reports – as useful as they currently are – are completely silent on oil production. The reports, he said, document, among other variables, the inflows and the closing balance of the account, which stood at US$344.16 million at the end of June 2021. He also noted that it presents a chart of the price of oil, but no production number, adding that it should not be difficult for the Bureau of Statistics and the BoG to upload monthly production data on their websites.

“When the NRF is up and running, the economist will obviously have to figure out whether the right amount of money is getting to the government. There is no way of accurately knowing the right amount without the production quantity and the prevailing market price. Another factor is the price at which (Guyana’s oil) is sold…Is it at the spot market price or at a premium over market price? Secrecy on these key variables means there is much room for mischief”, Khemraj asserted.

He contended that the Bureau of Statistics is “woefully understaffed” and that the government appears not too interested in changing this given that there is no immediate political return for strengthening data collection that ultimately leads to greater transparency.

“Under these circumstances a model allowing wide discretion like the Kazakh one is a recipe for much trickery and mischief. To be fair, I am sympathetic to Mr. Jagdeo’s idea that there should be a bigger upfront drawdown of funds given the grave infrastructure deficit at the moment. However, there is no reason for sacrificing transparency. Both can coexist”, Khemraj argued.

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@Prashad posted:

Where was this guy when APNU was in power.

@Former Member posted:

Tell dem deh...look how TK pulling down we mattie.

Look, look look Kapadulla Wood and Prashad ...

Look whey eee deh ...

Eee lookin' fuh soup but eee ah get lats ah poop an' wood.

From left are Rab Mukraj, Dr Asquith Rose, Dr Tarron Khemraj, APNU Leader David Granger and APNU MP Joseph Harmon

From left are Rab Mukraj, Dr Asquith Rose, Dr Tarron Khemraj, APNU Leader David Granger and APNU MP Joseph Harmon

Key NY backers leave AFC for APNU

Look, look look Kapadulla Wood and Prashad ...

Look whey eee deh ...

Eee lookin' fuh soup but eee ah get lats ah poop an' wood.



From left are Rab Mukraj, Dr Asquith Rose, Dr Tarron Khemraj, APNU Leader David Granger and APNU MP Joseph Harmon

Key NY backers leave AFC for APNU

Is true. Dem chaps looking for barley soup.

@Django posted:

Kazakh model for oil monies would be recipe for mischief -Tarron Khemraj

July 26 ,2021  --  Source

Economist Tarron Khemraj has flayed the government for suggesting it may follow the Kazakh model for the still-to-be-created Natural Resource Fund (NRF) and he lamented the continued absence of oil production data in official statistical reports.

In the same news SN article, Khemraj said that Jagdeo assures the public that whatever model the PPP/C government settles on, it will involve transparency and “input from local sectors”.

Khemraj however contended “It is not so clear what ‘input from local sectors’ means.

Perhaps, Tarron Khemraj does not know what he does not know.

Guyana’s share of the oil profits in the Federal Reserve Bank of New York does not constitute a NRF but the account is merely holding the oil revenues at almost zero percent yield.

"Zero percent yield"  does not make economic sense. How will the funds grow? Inflation will erode its real value.

Could the GNI economic guru, Dr. K Wood explain the economic sense of having this money sitting without growing it?

@Mitwah posted:

Guyana’s share of the oil profits in the Federal Reserve Bank of New York does not constitute a NRF but the account is merely holding the oil revenues at almost zero percent yield.

"Zero percent yield"  does not make economic sense. How will the funds grow? Inflation will erode its real value.

Could the GNI economic guru, Dr. K Wood explain the economic sense of having this money sitting without growing it?

Kapa is no doctor bai. The rationale is badmindedness. That is it. Dem could easily work with the law that APNU+AFC set up and even make small changes. There is nothing that they will do that will be very different. They just don't want to do it.

@Former Member posted:

Kapa is no doctor bai. The rationale is badmindedness. That is it. Dem could easily work with the law that APNU+AFC set up and even make small changes. There is nothing that they will do that will be very different. They just don't want to do it.

That dem can't change the law is bullshit.

Dr. Woody,“The discretion is completely within the remit of a powerful President and Prime Minister, and not the technocrats employed to manage the Kazakh fund. On the other hand, the model used by Norway is more rule-based. The rule essentially draws from a theoretical model that was published in 1957 and authored by the celebrated economist, Milton Friedman”, Khemraj said.

Hear nuh Dr. Woody, Jagdeo,  went on to say that it would “be unconscionable to have children in the present day unable to attend school while the country saves for the future”.

And hear nuh:

Dr. Khemraj noted that the Kazakh model allows for greater discretion in drawing down monies for the national budget.

“The discretion is completely within the remit of a powerful President and Prime Minister, and not the technocrats employed to manage the Kazakh fund.

Kazakhstan is confirmation


Kaieteur News – Not a day passes without citizens of this country being presented by this paper of how bent our leaders are in doing wrong with the nation’s oil wealth. One story revealed by us may have slipped under the radar of attention, but we retrieve it and place it right before the eyes of our readers. The title of the news article was “Current structure of Guyana’s NRF likely to encourage political meddling and limit independent accountability” (KN July 23). It has to do with this government’s thinking and leaning, even still unannounced, but settled, determination, on adopting the Kazakhstan model for our own National Resource Fund (NRF). Any such thinking that may be stirring and choice, should it come about, is wrong once, wrong twice, wrong each and on every occasion harboured.
Guyana should not go anywhere near the Kazakhstan model for its NRF. It is one of those nation-states that finally came to independence in 1991 following the breakup of the old Soviet Union. Guyana could be considered its ‘big brother’ by a quarter century. More importantly, the states that came to be conveniently grouped under the more easily enunciated label of ‘stans’ have much going for them, compliments of their Caspian Basin. Some of those new societies, if not almost all of them, have been noteworthy for being controlled, virtually owned, by powerful oil and political oligarchs, with little to separate the two sets of dominant players. Corruption and cronyism, and endless leadership criminality and political skullduggeries, have all come to feature highly in the oversight and operation of those countries (‘stans’) oil and Natural gas resources, among other riches.
So why would Guyana, through powerful leaders in the present PPP government, would want to have any model from such a country for its own NRF? Why would any political leader with clean visions and clean hands even want to think of, then go anywhere near to, the NRF model of a country like Kazakhstan? That is, if they desire to do right by this oil that Guyana keeps finding?
We ask these sharp, relevant questions, because according to the position taken by Mr. Arthur Deakin, Co-Director at America’s Market Intelligence Practice, “Guyana’s current government should change direction and should steer towards adopting an NRF that mirrors Norway, and not Kazakhstan” (KN July 23). It should be so because the “Scandinavian model would be the ideal to serve as the basis for the [local] fund.” And because it facilitates “modifying allowances for a greater percentage of revenues to be transferred to the budget for…infrastructural development.” And because, “regardless of the political party in power, having the “right fiscal and regulatory framework” embedded in the nation’s NRF could lead to the right results in every area for all peoples of this rich, but hopelessly misled, society.
It is enlightening that during what may be insisted to be one of the biggest storms in this country’s history, an existential one at times, Guyana did not look for any aid, any guiding hand or any overarching guiding principles from a place like Kazakhstan. To cut to the sharpest point, PPP leaders then in opposition reached to the A and B and C and E countries for help and wisdom. As any Guyanese knows, those were American and Canadian in North America and British and those other countries that have been mainly capitalist oriented in Western Europe. For emphasis, PPP leaders did not even think of seeking a helping hand from the likes of Kazakhstan. Come to think of it, they did not have much to do even with Mother Russia. So why are they thinking of having an all-important NRF based on that of Kazakhstan?
To answer our own questions, we share our hard misgivings about where such thinking of PPP leaders is based upon, and leads. Kazakhstan’s NRF does not foster transparency. Kazakhstan’s Management Council that drives spending includes its top political leaders. Oil means money, which means much spending, which means Guyanese should not want crooked politicians around such money and spending, without transparency and accountability. It should be clear now why Kazakhstan comes up in PPP leaders’ conversations, and not Norway. It is because skullduggeries are in motion.

Source:

Current structure of Guyana’s NRF likely to encourage political meddling and limit independent accountability


…Govt. should steer towards Norway model – Co-Director at Americas Market Intelligence Energy Practice.

By Carlos Gonsalves

Kaieteur News – Guyana, which recently discovered nine billion barrels of proven oil reserves, is following the same path as countries that discovered large amounts of natural resources, such as oil, by creating a Sovereign Wealth Fund to manage their newfound wealth. This is according to Arthur Deakin, Co-Director at Americas Market Intelligence Energy Practice. Mr. Deakin posits that the structure of the Natural Resources Fund (NRF), fundamentally impacts how effectively the country spends and saves its oil monies. At the end of May, at the 2021 Diaspora Conference, President, Irfaan Ali, and Vice President, Bharrat Jagdeo, suggested that Guyana’s NRF would be similar to the Kazakhstan model in the coming years. Due to Guyana’s low development levels, they explained that the famed Norwegian SWF model did not fit the country’s current needs.




That being said, Mr. Deakin’s position is that Guyana’s current government should change direction and should steer towards adopting an NRF that mirrors Norway, not Kazakhstan, because the overlying framework of the Scandinavian model would be ideal to serve as the basis of the fund. With that backbone, Guyana would be in a position to adjust incrementally wherever deemed relevant, such as modifying allowances for a greater percentage of revenues to be transferred to the budget for the facilitation of infrastructural development.
Mr. Deakin further opines that regardless of the political party in power, it is clear that implementing the right fiscal and regulatory framework for its NRF will determine the future trajectory of Guyana’s society. Consequently, he notes that Guyana should also rely to an extent on financing from both the private sector and multi-lateral institutions, such as the IMF and IDB, while interest rates are still low. It is also fundamental for Guyana to prepare for a world in which fossil fuel demand starts declining. Although the International Energy Agency does not expect that to happen before 2030, Guyana’s peak oil production will likely coincide with the beginning of the oil decline. Thus, it should ensure that it implements emission-reducing strategies for its energy production, such as improving leak detection programs, eliminating routine flaring and installing carbon capture technologies. These policies should also be accompanied by a diversification of Guyana’s economy, focused in areas such as infrastructure, mining, manufacturing and agriculture. By capitalising on the near-term influx of private and public investment, Guyana can become an industrial CARICOM hub.
However, Guyana’s government has opted to utilise a model that is more in accordance with the Natural Resource Fund for Kazakhstan. Oil-rich Kazakhstan ranks 94 out of 190 in Transparency International’s corruption index, tied with countries such as Brazil, Ethiopia and Suriname. Following massive oil discoveries in the late 20th century, the country’s U$63 billion Kazakhstan National Fund. Known locally as Samruk-Kazyna, it was created in 2000 to manage oil funds more effectively but was structured in a way that gave key politicians large influence over its spending. Kazakhstan established a Management Council to assist with its spending, that bears a number of similarities with Guyana’s proposed Macroeconomic Committee – responsible for advising the Minister of Finance on the amount that should be spent by the fund. The Kazakhstan fund has been noted to lack the necessary transparency that is required from an NRF. Although Kazakhstan requires fund deposits and withdrawal amounts to be made public, there has been limited public reporting on specific assets. In 2021, a financial analyst was sued by the fund for publishing a report on one of its holding companies and calling it an “ineffective investor.”
Kazakhstan’s Management Council is led by the President, Prime Minister, and other key political allies. This is again similar to Guyana, where the current structure of the fund gives the Minister of Finance significant influence. This consequently has been noted by Mr. Deakin to encourage political meddling and limit independent accountability within the fund. It also pressures fund managers to make decisions based on political affiliations, rather than what is best for the country. Up until 2016, the Kazakhstan fund guaranteed transfers of up to U$8 billion to the State’s budget. This was subsequently reduced to U$6 billion after the adoption of a new framework. In 2000, when the fund was first created, this transfer ceiling amounted to nearly 50% of the country’s U$18 billion GDP. From 2010 to 2020, transfers from Kazakhstan’s fund to the state budget averaged roughly 30%, a significant portion of the country’s revenues. It is pertinent to note that the current Guyanese administration has recognised this dangerous integration and is rewriting the NRF to fix this issue.
In Guyana, the projected transfer amounts are slightly larger than Kazakhstan and will be able to cover any pressing financial needs the country may have. Guyana’s NRF transfers to the budget are expected to start at 33% through 2024, lowering to 30% of non-oil GDP after that. A percentage much larger than that would jeopardise necessary intergenerational savings that accumulate interest over time, limiting the fund’s exponential growth potential. As seen in Norway’s $1 trillion NRF, the ability to keep transfers at a 25% average of the country’s national budget, allowed it to accumulate wealth and grow its balance.

Source:

At the end of May, at the 2021 Diaspora Conference, President, Irfaan Ali, and Vice President, Bharrat Jagdeo, suggested that Guyana’s NRF would be similar to the Kazakhstan model in the coming years. Due to Guyana’s low development levels, they explained that the famed Norwegian SWF model did not fit the country’s current needs.




That being said, Mr. Deakin’s position is that Guyana’s current government should change direction and should steer towards adopting an NRF that mirrors Norway, not Kazakhstan, because the overlying framework of the Scandinavian model would be ideal to serve as the basis of the fund. With that backbone, Guyana would be in a position to adjust incrementally wherever deemed relevant, such as modifying allowances for a greater percentage of revenues to be transferred to the budget for the facilitation of infrastructural development.

@Former Member posted:

We bai Spugum peeping and waiting foh a chance to defend he mattie. I see PPP shared out houselots to all kinds of people

That is good. But where is the infrastructure to support the development?

@Mitwah posted:

That is good. But where is the infrastructure to support the development?

Dem PPP bais playing the game well. Just hand out house lots and doan worry bout infrastructure. When flood come simple people goh not blame gov who give dem house lots. Now, there is an opening for credible opposition to educate people about these things.

@Former Member posted:

Dem PPP bais playing the game well. Just hand out house lots and doan worry bout infrastructure. When flood come simple people goh not blame gov who give dem house lots. Now, there is an opening for credible opposition to educate people about these things.

When did you come up with this nonsense idea?

"simple people"? You're the one that's simple....lol

Perhaps, Tarron Khemraj does not know what he does not know.

“Under these circumstances a model allowing wide discretion like the Kazakh one is a recipe for much trickery and mischief. To be fair, I am sympathetic to Mr. Jagdeo’s idea that there should be a bigger upfront drawdown of funds given the grave infrastructure deficit at the moment. However, there is no reason for sacrificing transparency. Both can coexist”, Khemraj argued.

@Mitwah posted:

“Under these circumstances a model allowing wide discretion like the Kazakh one is a recipe for much trickery and mischief. To be fair, I am sympathetic to Mr. Jagdeo’s idea that there should be a bigger upfront drawdown of funds given the grave infrastructure deficit at the moment. However, there is no reason for sacrificing transparency. Both can coexist”, Khemraj argued.

Khemraj has been very good at pointing out the differences in the models and showing how dem tiefman trying fuh hustle we

For the haters - Khemraj is a true Champion - haul alyuh ass

That is Ramjattan btw...lol

Last edited by Spugum
@Spugum posted:

Khemraj has been very good at pointing out the differences in the models and showing how dem tiefman trying fuh hustle we

For the haters - Khemraj is a true Champion - haul alyuh ass

That is Ramjattan btw...lol

Dem PPP bais seh how the man want Minista wuk

@Django posted:

July 26 ,2021

Source


Khemraj cited a Stabroek News report where both President Irfaan Ali and Vice President Bharrat Jagdeo said they do not like the present NRF Act and favoured the model now in use in the Central Asian, former Soviet Republic of Kazakhstan. Jagdeo, he noted, went on to say that it would “be unconscionable to have children in the present day unable to attend school while the country saves for the future”.

Khemraj noted that the Kazakh model allows for greater discretion in drawing down monies for the national budget.

“The discretion is completely within the remit of a powerful President and Prime Minister, and not the technocrats employed to manage the Kazakh fund. On the other hand, the model used by Norway is more rule-based. The rule essentially draws from a theoretical model that was published in 1957 and authored by the celebrated economist, Milton Friedman”, Khemraj said.

And to think the average PPP supporter like de gutter Pandit supports shit like dis. Ratman gon tell dem...."bais, ah we gon invess in de yutes. Abie gon tek aile money and bill school. Yuh kno how abie people smaaaat".

The Indo KKK brigade led by Pandit cheer loudly amid mighty screams of "progress, progress". Likka flowing.

Then the announcement by Ratman: "bais...Moti and Doti gon bill de school". Neva mind dat Moti and Doti Ltd never even build a dolly house in their lives. And that's how the teefing will be conducted.

Rinse repeat. And all the while, the DUMB PPP supporters keep cheering these miscreants on.

@Former Member posted:

And to think the average PPP supporter like de gutter Pandit supports shit like dis. Ratman gon tell dem...."bais, ah we gon invess in de yutes. Abie gon tek aile money and bill school. Yuh kno how abie people smaaaat".

The Indo KKK brigade led by Pandit cheer loudly amid mighty screams of "progress, progress". Likka flowing.

Then the announcement by Ratman: "bais...Moti and Doti gon bill de school". Neva mind dat Moti and Doti Ltd never even build a dolly house in their lives. And that's how the teefing will be conducted.

Rinse repeat. And all the while, the DUMB PPP supporters keep cheering these miscreants on.

That's not what he said. De man said sweeter dan sumatoo, sweeter than buxton spice...we going to de moon...all de way to de moon! Pandit bandit man has access to the visa cyard!

@Former Member posted:

That's not what he said. De man said sweeter dan sumatoo, sweeter than buxton spice...we going to de moon...all de way to de moon! Pandit bandit man has access to the visa cyard!

Yuh odda fren Balaloo bramin suh bored ova deh dat he now posting as ASS WIND to "stir things up" like he seh. Cussing down black man nasty nasty. Balls less as he is, he kyant do it unda he own name.

Can spot these fkkers a mile away. Don't ask me how.

@Former Member posted:

Yuh odda fren Balaloo bramin suh bored ova deh dat he now posting as ASS WIND to "stir things up" like he seh. Cussing down black man nasty nasty. Balls less as he is, he kyant do it unda he own name.

Can spot these fkkers a mile away. Don't ask me how.

There was a banna named Labba posting here who called Balahoo a brown bai KKK .