Historical explanation why sugar failed

Sep 26, 2016 Features / Columnists, Letters

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Dear Editor;
Sugar has always been the mainstay of the economy of this country except for a few years in the 1970s when the contribution of bauxite to the GDP exceeded that of sugar, and in later years down the road, when other economic activities (both underground and above ground) appeared more significant.
Because sugar has played such an important political, economic and social role in the culture of Guyana, going as far back as the time of plantocracy, slavery and indentureship, and continuing to this very day, and because sugar directly and indirectly impacts on more than half the population of Guyana, it cannot be summarily dismantled without serious aberrations, perhaps not economic, but definitely social and political. It must be restructured. The continual subsidization by past and present governments is attestation to this fact.
In seeking a way forward for Guysuco, I would like for us to philosophically examine how we came to be in this position of insolvency. For, herein lies, not just the cause of the demise of sugar, but also the answer for returning it to viability. Indeed, too many people have interpreted and analyzed the demise of cane sugar from an economic or accounting perspective; few have done so from a philosophical/sociological one. It is not surprising therefore, that none of the corrective measures, suggested or applied so far, seems to be working.
In my philosophic examination, I would like to start with the premise that the history of sugar has never been associated with the development of Guyana, development being defined as a sustained increase in the economic standard of living of the country’s population, normally accomplished by increasing and improving the quality of its physical and human capital, and by improving and increasing its technology and general industrialization of the country.
Rather, the history of sugar has been, and still is, characterized by two major forms of alienation.(1) The alienation of labor from the production or any decision-making process, and (2) The alienation of the industry from the, that is,international pricing mechanism.
These two forms of alienation, and the implications associated with each of them, are, in my analysis, the main causes for the demise of sugar. And, like I have earlier mentioned, returning the industry to economic viability lies in the correction of these two variables, each of which I would like to briefly comment on, before proceeding to explain my proposal for correcting them.
Alienation of labor. In the first place, the sugar industry has historically employed a mode of production totally different from any other agricultural industry. First, it was slavery when labor was a property, like capital, owned by the industry, to be used and abused at the whims of the industry.
Later, from indentureship to present, labor became a commodity to be purchased at a price determined solely by the industry through a fundamentally asymmetric power relationship between the poor workers and the powerful owners. This asymmetric relationship between labor and owners gave rise to strong labor unions and nationalist political parties trying to bargain for a livable price for labor. Conflicts ensued – sometimes violent, sometimes deadly.
The history books are rife with countless incidents of bitter confrontations, uprisings, riots, strikes, sabotage, tear-gassing, widespread arson, seizure of strike relief etc.
This antagonistic relationship between the laboring class and the ownership class became even more confrontational after nationalization when the laboring class began to perceive themselves to be racially and politically marginalized. Strikes, arson, sabotage, stealing and mediocre labor and managerial performance increased.
In addition to a decreasing labor supply with its concomitant higher labor price, these all contributed to a rising cost of production and at the same time decreasing productivity at all levels of the production process, a trend which continues to this day. Labor in Guyana is alienated from the means of production, and thus is able to hold the industry at ransom.
I now come to alienation of the industry from international pricing mechanism. The sugar industry is alienated from a market system that dictates not only price and quotas for its product, but specifically limits the industry to the production and export of raw or semi-processed sugar. In addition, not only the price for exported sugar is exogenously controlled, but also the price for much needed machinery and agro-chemicals for the production of sugar.
These dictated prices for both exports and imports seldom or never change in favor of the industry. Thus, the industry is at the mercy of a progressively worsening terms of trade which, like the rising cost of labor, adds to the per unit production cost.
The terms of trade have been deteriorating for decades, and there are no signs that the situation will improve or reverse for years to come. Besides, for Guysuco to stay in the highly competitive world market, while remaining a state-owned entity there is grave danger of the state directing scarce resources to sugar for purely political reasons, particularly as this burden can be passed on (through taxation) to the citizenry at large.
Gokarran David Sukhdeo

Editor’s note; Mr. Sukhdeo’s letter is very lengthy and will be continued in tomorrow’ edition

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