There is nothing wrong with the Government’s withdrawal from the Heritage and Stabilisation Fund, Prime Minister Dr Keith Rowley said yesterday. He made the comment yesterday on his return from Cuba in response to a media report which indicated that the Government had withdrawn $2.5 billion from the fund.
Rowley said there was adequate justification for the withdrawal given the fluctuating price of oil.
“It is nothing out of the ordinary, there is nothing to be upset about. It is something we had planned for, so when oil price fell to US$30 to US$27 that is what the fund is for. There is nothing to be upset about,” he said.
He added, “Thankfully, we had put aside money for that purpose. Of course, we are seeing some uptick in the oil price. We can’t influence it but we are hoping that it continues in that trend and we shouldn’t really make any bacchanal over the fact that we had used savings which were saved for that purpose.”
Rowley said the fund had two components—the heritage side and the stabilisation side—and that one part was set aside for a rainy day while the other was for savings for the future.
“Heritage, meaning that not withstanding what is happening to us now we are putting aside something for our children and grandchildren. Stabilisation, meaning if our economy collapses as a result of a drop in the oil price beyond a certain level that we will dip into the fund to stabilise the economy now,” he said.
The PM said Finance Minister Colm Imbert was justified in making the statement during the presentation of the budget last September that there would come a time when the need to withdraw from the fund would come.
“For the meantime it is still Heritage and Stabilisation—one fund. What we are really dipping into is the stabilisation aspect of it, you shouldn’t have to rely on the newspapers for that, because the Minister of Finance who is the authority of the Parliament and the Cabinet on that.
“When we did the budget and realising that to service the country, the collapse on the revenue side of the budget, was such that when you look at the expenditure side as against the revenue side there was a gap that had to be closed.” He insisted that the Government was justified in making the withdrawal.
“We were earning far less than we had to service the country. At that time and other times, the Minister of Finance (Colm Imbert) did indicate that to assist in closing that gap, we would on this occasion draw down on the fund that was established for that purpose.
He noted, however, that Government had agreed to separate the funds into a heritage fund and a stabilisation fund, “so it would not be seen, or put across, or become reality that we use the Heritage component of it.”