GUARDING TT’S ENERGY FUND

The Government has announced a move to prevent any government now or in the future from squandering money deposited into the current Interim Revenue Stabilisation Fund describing the plan as one that would make the fund less vulnerable to predators. Given the way our money has been handled in the past and the extent of fraud and theft, not to mention squandermania many people would be sceptical about the plan. We hear however, that a special Heritage and Stabilisation Fund is to be established according to Junior Finance Minister, Senator Conrad Enill, and the proposed legislation which will effect this would “raise the standard of understanding, transparency and accountability on the use of our national petroleum wealth.”

There is a clear need not only to safeguard the Interim Revenue Stabilisation Fund against those who would prefer to see it as their private tills, but to generate economic development for down the road benefits for the country and its people. We are told that this will be effected through strategic investments “vital to economic diversification” and the creation of new financial assets to provide a stream of revenue when reserves of crude and natural gas have been exhausted.  Some 60 percent of the fund will be utilised for stabilisation purposes. As a guarantee that the monies from the fund will not be plundered and/or squandered there is to be a legislated provision for the assets of the fund to be managed by the Central Bank. 

All of this will be subject to parliamentary oversight with annual reports on the  management of the fund laid in the House of Representatives. It is anticipated that the fund which at September 30 of last year stood at US$441 million will amount to some US$688 million  by September 30 of this year, on the basis of current estimates, resources in the fund, including interest and earnings, an increase in excess of 56 percent. If the growth rate of the proposed Heritage and Stabilisation Fund is maintained at the same level as that of the Interim Revenue Stabilisation Fund then by September 30, 2006 it should be in excess of US$1 billion or more than TT$6 billion!

The fundamental difference between the Interim Revenue Stabilisation Fund and that of funds established in the first oil boom period of the 1970s is that while they were appropriations to funds for specific long term projects, the IRSF is designed to continue to take the country forward, economically, when crude and gas revenues become history. We must remember that the allocated monies were spent in the 1970s as though the so-called “oil boom” would have lasted forever. We can only hope that we have learned our lesson  and that every check and balance, plus responsibility, will ensure that the extra money now coming our way through a second oil windfall will not be squandered. By all means let us assist Caricom member states some of which, this time around, have been hard hit by last year’s Hurricane Ivan, but let us not fail to use our money to put in place here at home those programmes that our people, many of whom are living in poverty, urgently need.