The begging bowl syndrome

May 24, 2011 Editorial

The image of the leaders of poor countries trotting around the world seeking alliances merely for economic reasons is never far from the mind of Third World people. They know the reality. They were exploited. Today, they are poor and their economies are never allowed to develop because as a people they are more of less forced to be producers of primary products.
They have been fashioned to believe that the less energy they spend converting their primary products to the finished products the better they will be simply because they would not need to make the necessary investments to pursue value added.
To compound the situation the large powers manipulate the prices. They would determine the price of products from Third World countries. Further, the economies of the big powers are better able to withstand the price shocks so they can manipulate prices simply to force out the competition that would come from the poorer countries.
From the time this was done about forty years ago when the oil crisis hit the people in the poorer countries, they have been left to beg.
And what is astonishing but not readily seen by the people in the country, is that when they beg they often end up spending much more than they borrow because they repay the loans at a terrific interest rate. The Skeldon Sugar Modernisation Plant is one case in point. The money borrowed is just over US$200 and already the interest payment according to the annual report produced by the sugar company, is US$5 million.
But whatever the cost, Guyana is pursuing development. It is reaching for value added. The Enmore Packaging Plant is just one. But this was constructed in a manner that seems to say that Guyana spent more than it should—a lot more.
The Enmore Packaging Plant was completed at a cost of US$12.5 million. It is reported to have the capacity to package up to 80,000 tonnes of sugar in one year. Is this money well spent? Recent investigations have revealed that a larger packaging plant with a larger capacity was constructed in Kenya for about a quarter the cost of the Guyana plant.
Kenya’s largest sugar miller, Mumias Sugar Company (MSC), recently built, at a cost of US$3 million, a new eleven-machine, state-of-the-art packaging plant with a daily capacity of 700 tonnes, enabling the company’s packaging production capacity to increase to 300,000 tonnes per annum. The packaging machines for Mumias Sugar Company were supplied by Brazilian companies Brazafric and Raumak. Guyana’s were procured from India.
Something must be wrong. Unless Guyana has far superior equipment that would outlast the cheaper facility, then Guyana has been shafted. We hate to think that inside the government circles someone actually fleeced the Guyana government.
If that is the case then the extent of the corruption has led to someone pocketing enough money to build more than four more packaging plants.
But the leaders keep going to international lending agencies. They are requested to present a plan and they must accept the terms of repayment. In the case of the Enmore facility the nation appears to have set itself the task of paying back money that it never got.
The international donors note these things and they report that Third World countries are among the most corrupt. In the case of the Enmore Packaging Plant the money came from the European Union.
Earlier this year, head of the European Union, Gert Heikens, when asked about monitoring money that is given to Guyana, said that once the money enters the national accounts it is lost to public scrutiny. In this case the money must have been disbursed through the national treasury because there would have been a query about the cost of the packaging plant.
At this time in Guyana there is much going on. The national leaders say that the country has a lot of catching up to do. For example, the government is pursuing information technology and is trying to make the nation computer literate. The government says that this is to make the people more equipped to deal with the challenges of the times and to cope with whatever is happening around them.

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The begging bowl syndrome

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