Legislation to meet conditions of US$35M World Bank loan

first_imgFinancial bills tabled in ParliamentThe recent tabling of a range of financial bills by the A Partnership for National Unity (APNU)/the Alliance For Change (AFC) coalition Government is primarily aimed at meeting certain conditions for the US$35 million World Bank loan that Government has been granted.Opposition Leader Bharrat JagdeoThis is according to Opposition Leader Bharrat Jagdeo, who said that the five bills are: the Financial Institutions (Amendment) Bill 2018, Insurance (Amendment) Bill 2018, National Payments System Bill 2018, Bank of Guyana (Amendment) Bill 2018 and the Deposit Insurance Bill 2018.Jagdeo explained that the contents of these bills have direct relation to Guyana being able to access the World Bank loan. According to him, while some may want to believe that the World Bank is giving the Government some assistance, it is more aimed at steering the Finance Ministry in a certain direction.“The loan has several conditions. It will be helpful for Private Sector and all those who are interested in the legislation before Parliament now to look at this document,” he advised, while explaining that the World Proposed Programmatic Development Policy Credit lists several conditions that have to be met.But the Opposition Leader noted that many of the conditions set out by this institution did not apply to the local economy. In some cases, it requires a longer phase. In other words, Jagdeo said that focus should be placed on looking at the local circumstances before any change to legislation is made.“There are procedures for winding up a bank’s operations, deposit insurance, emergency short-term liquidity facilities, all licensed insurance companies, cashless transactions (the payment system) and they have targets of what has to be done in how many years,” he added.Another important observation made by the former Head of State is the fact that the Government can get the US$35 million if the Financial Intelligence Unit (FIU) works in a certain way.He pointed to the fact that the World Bank has set as a condition that the FIU must have 20 reports referred to the Police for investigation into money laundering and 10 updates to all of the 2017 cases. The World Bank is also demanding 25 cases between June 2019 and June 2020.Jagdeo has noted that the Government has not mentioned these facts, and he also believes that all of the financial bills have been drafted by external consultants as well.Only seven days ago, the US$35 million loan was approved by the World Bank to support Guyana’s efforts to strengthen the financial sector and fiscal management, and but more importantly, to better prepare the country to benefit from its newly-discovered oil and gas reserves.Finance Minister Winston Jordan has said that the financing would provide critical support to Guyana’s reform agenda and efforts to strengthen institutions and build a resilient economy that was capable of withstanding both external and domestic shocks. These reforms, he said, will be key to guide the management of oil revenues for the benefit of present and future generations.Meanwhile, following the disbursement of this loan, World Bank Country Director for the Caribbean, Tahseen Sayed said that Guyana was making important strides to promote financial resilience and improve fiscal management, and has embarked on a broad-based reform programme.“These reforms will be key to build a strong economy that is underpinned by a strategic management of public resources for the benefit of the Guyanese people,” Sayed said.The financing focuses on strengthening financial stability and enabling sound financial development to promote macroeconomic stability and long-term growth. In particular, it will support banking reforms and depositor protection, the establishment of a deposit insurance scheme, implementation of a new insurance law, and the country’s anti-money laundering efforts.This Development Policy Credit, the first of a series of two programmatic financial and fiscal development policy credits, is financed by the International Development Association (IDA).last_img read more