Latest update October 17th, 2026 10:00 AM
A question of viable enterprises
The recent budget announcement that GuySuCo will be the beneficiary of a $6B subvention, raises a very troubling issue regarding the viability of certain public enterprises. One would think that as an agency outside the regular bureaucracy of government the corporation has a board capable of providing the management with the necessary guidance for efficient and effective performance of its mandate.
This – it is assumed— would include having the authority to make independent financial, personnel, and administrative decisions in discharging their managerial responsibilities. After all the success or failure of GuySuCo or any public enterprise must be judged by the purpose(s) it was created to serve, and whether it is achieving its purpose in light of the stipulated special privileges and/or obligations.
The legitimate question to be asked is whether a public enterprise is making a profit or operating at a loss, especially when a comparison is being made with private enterprises in the delivery of goods and services.
This aspect is of signal importance in a free and competitive market economy where public enterprises face no advantages or constraints that are not experienced by the private sector. The question of accountability is raised even though the public enterprise enjoys relative autonomy so as to achieve a public purpose.
The public enterprise must be accountable, subject to rigorous monitoring, and an appreciable degree of control since it is established to produce goods and/or services in the execution of government policies and programmes.
However, it is not unknown that the evaluation of some public enterprises on the basis of overall profit and loss even with stipulations of purpose and method of operation, are difficult, misleading and at times may even be irrelevant. A typical example may be the public utility or transport service provider which is conceived as a public service first and a money-making operation second.
A public bus company may be required to operate routes on schedules to serve some special social or development purpose even though it is anticipated that the company will lose money. The argument has been made locally that public road transport did not rematerialize as a public enterprise in Guyana because of considerations of prospective private profit by influential public figures.
This effectively ruled out any serious consideration of a transport subsidy in the face of losses which would have had to be borne by government. The point is that citizens have a right to enjoy a subsidised public transport system similar to the privilege accorded the sugar industry in principle.
There has been talk about establishing a development bank but based upon our past experiences of constituent politics, this could end up serving the needs of a particular sector of the economy e.g. agriculture or a selected segment of the population which is important for electoral advantages, but may not be the best investment of money from the limited view of profit and loss. The appropriate avenue in a country where there is equitable distribution of the national good would be to address the needs of depressed areas where the opportunities for large economic returns are low, but where the need to alleviate poverty is high.
These are issues of purpose which should be decided by policy makers for each of its public enterprises and which then become the basis of evaluation. However intervention in policy issues should be limited to conditions and methods of operation aimed at influencing performance and modification of standards by which they can be judged.
In other words there should be no bureaucratic and political involvement in the affairs of public enterprises like GuySuCo which extend beyond the major intervention issues relative to the conduct of authorized program activities under already sanctioned policy in the area of management.
However, the framework still requires formal approval from the monitoring body for certain kinds of financial decisions involving new investments for expansion and recapitalisation, but not for regular continuing operations and maintenance.
In the extant GuySuCo loss-making and low productivity scenario government should provide complete reports to parliament to aid in determining the costs of peripheral and uneconomic functions in order to arrive at a fair assessment of the values and justification of the proposed subsidy.
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