MANAGEMENT IS ALSO IMPORTANT TO THE FUTURE OF THE SUGAR INDUSTRY

Dec 20, 2009 Features / Columnists, Peeping Tom

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The PNC government of Forbes Burnham paid generously for the sugar industry from its former masters. The takeover by the government of this commanding height of the local economy can hardly be described as a socialist nationalization. It was more a buyout.
Despite accusing the sugar barons of not capitalizing the industry since Independence, Burnham whose initial period of political consolidation saw him oppose nationalization, capitulated to foreign pressure and paid a fortune to the foreign owners of the sugar industry.
It is not surprising though that Burnham would spin his usual web and indicate to the people of Guyana that his government would pay a discount rate for the industry and that the takeover would form part of the repayment of the debt for slavery.
There was no repayment of any debt. Burnham buckled under pressure and offered to Booker handsome terms. The nation must be reminded that Guyana paid far more than the figure of US$70M that Burnham said he would pay, and paid it at interest of 6%.
The nation must also not believe that there were no super salaries during the PNC regime. And they further must be reminded of Desmond Hoyte recruiting persons from overseas – including teachers from Sri Lanka – and compensating them far more than locals. It was also the Desmond Hoyte regime which brought Booker Tate back to Guyana and which paid to that firm hundreds of millions of dollars for a small band of managers.
This does not excuse some of the things which have happened under the PPP. The payments to Booker Tate were generous. But it must also be said that Cheddi Jagan had a misguided conception of what was a super salary. That is why his dollar-per-year proposition never got off the ground. No one is going to come here and work for a dollar a year, when they have families to look after and their future to think of. A lot of persons came knocking on Cheddi’s doors when he was President. But quite a lot of them did not come to work for free.
Skilled persons should be paid salaries that are commensurate and competitive, and thus the managers of GuySuCo deserve to be paid for their services, but must be held accountable for their performance. Right now there is an attempt to make the management of the Guyana Sugar Corporation a scapegoat for the present financial misfortune of the sugar industry.
If it is true that GuySuCo has reportedly had to defer payment to its creditors and has had to seek advances from overseas purchasers of its sugar to meet the arbitration award, this suggests that we have a deep-rooted financial crisis in the industry. And what therefore is needed rather than blaming super salaries for the state of the industry, is for a study to be commissioned specifically about the state of finances of the corporation.
This is what is needed, not all this talk about not paying the management the three per cent award. The award of the Arbitration Tribunal was an across-the-board three per cent award. Obviously the Tribunal did not feel that management should be denied the award. It made the award across-the-board and the award is supposed to be binding on all parties.
The unions or the politicians should not deviate from what was agreed to by the Tribunal. To do so will be in violation of the award, and while the managers can voluntarily take a wage freeze, there is so far no indication that management has consented to this. In fact what we are hearing is that the government is saying that the top management would not be paid the 3% and also that the sugar workers should be paid for Christmas.
The Arbitration Tribunal had given GuySuCo the liberty of up to March of 2010 to pay the increased award. Now we are told that GuySuCo will pay the award before Christmas. This is not in contradiction to the award. What is in contradiction of the award is for a wage freeze to be placed on senior management. Those affected would have a legitimate grouse because they have a legally binding award which gives them a 3% increase and this cannot be arbitrarily taken away without their consent.
What the sugar company can do is to review the salaries of its top managers when their contracts come up for renewal. It should also look at ways of reducing some of the benefits that are given to managers and their families such as transportation of their children to school by company bus. But managers are just as critical to the industry as the cane cutters and while the latter deserves to be paid a greater increase, management also needs compensation to cater for the effects of inflation.
It is commendable that the sugar corporation took the initiative to find ways to pay the workers their increase before the holidays. And this also shows the value of quality management in a corporation which now needs to seriously look at costs.
However, one cannot expect that management would be the best group to examine serious cost-cutting, given the present circumstances in the industry. This is why it is crucial that a strong group of financial experts be assembled to examine how to put the corporation on a sure footing because unless there is financial stability, the turnaround plan is not going to be very helpful.
There is a great deal of public mistrust of the government at the moment and therefore the government must see some interest in being vindicated by an independent panel of financial experts.

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