An adumbration on the origins of GuySuCo’s troubles

Nov 07, 2016 Letters

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Dear Editor;
These notes are taken from the National Development Strategy which we have mostly forgotten and disregarded as obsolete, but it is not, since whilst a few numbers and situations have evolved because of the non-implementation of the strategy, the concepts contained therein are still very valid.  We should update it and like the original, the private sector must do it.
But there are things regarding sugar which are contained in the pages of the strategy which must remind us of sugar’s importance to us in the past.  For example the strategy tells us that the sugar levy which was put into effect since 1975-76, was still being paid by the industry as late as 1996 when US$51 per ton sugar produced by GuySuCo was to be paid. If one used that low figure and the twenty years from 1975 to 1996, and we use a very low average annual production of 230,000 tons for all of those years the industry would have paid to the government of Guyana 234.6 million US dollars or 47 billion G dollars. Then there is the local subsidy of sugar, Guyana was selling sugar, to its local consumers, at a price which was lower than the cost of production, for example the local subsidy of sugar in 1997 was, according to John Gafar, 250 million Guyana dollars for that year and that was also going on since Independence.
In addition since 2006 the EU’s developmental funds began to flow to this country, and is now somewhere close to 250-300 million Euros, which in 2011 was 1.4 to 1 US or 280-1 G = 84 billion G dollars of which  GuySuCo saw nothing. It was used, among other things to spend 800 million to divert the Georgetown sewage system to build a Marriott hotel, to spend a similar amount to change the Pleasance GBC Short Wave radio transmitting installation into Paradoville 2, a very underutilized and expensive stadium, a road to Amelia, a telecommunications cable to Brazil both projects which are now considered national disasters, the hopeless Canal and other similar uneconomical activities but was never given to the industry to which the EU expected the funds to flow, to “position it to be better equipped to cope with the loss of the preferential EU price, including diversification and mechanization.” The levy, the subsidy of the local selling price for sugar and the EU developmental funds which contributed to the economy of Guyana are more than all the billons of G dollars given to the industry in bailout money thus far, and which we are so wont to criticize now.
Nowhere in the strategy, does it say that there is any evidence that any of the levy and local subsidy money was ploughed back into the industry to make it more competitive. In fact the strategy tells us the opposite; that many major GuySuCo capital projects factory and field were abandoned because there was no money. The sugar business in Guyana was getting more difficult to operate, due to the competition from beet and other cane producing countries which had mechanized, but also weighed down by a massive local levy, subsiding the local selling price, and direct taxation. Most of the levy and the local subsidy money over several decades was used to bolster the failing economy of Guyana in general and none was given to the sugar industry. And quite incredibly some of us still want to know how GuySuCo finds itself in this situation today!
We were living here and we remember that we had to line up for cooking oil and gasoline and had empty grocery stores. I am going to leave the acts of sabotage, unnecessary striking and arson of cane against this industry as it continued to be a political football which even today is evident everywhere. The workers are well advised to examine the agenda of people who are telling them that the way forward is to disrupt GuySuCo’s activities more, and all will be well, that there is profit in disruption!
There is now no question that GuySuCo has to diversify especially its non-profitable parts to some other more productive farming activities. But it takes money to diversify. The government has to make a choice. They have to understand that diversification cannot proceed without massive investment, and by not diversifying now it is sentencing itself to more decades of bailing GuySuCo out of the deadly downward economic spiral in which it finds itself.
Recently Mr. Jagdeo announced that he will shoulder the blame for the downward spiral of sugar, and we are on record in opposition as saying that there is neglect of the industry and it will come home to roost in time. The strategy predicted it, and we, in the opposition at the time, predicted it; so now it has happened according to the famous words of Winston Churchill “owing to past neglect, in the face of the plainest warnings, we have entered upon a period of danger. The era of procrastination, of half measures, of soothing and baffling expedience of delays, is coming to its close. In its place we are entering a period of consequences”
It is good to have this responsibility sorted out by Mr. Jagdeo’s announcement that his government is responsible of the woes of the sugar industry today, but now we must face reality; the sugar workers are our people and sugar has carried us too long as an industry to abandon them now. We have to see what we can do to help them to make the changes to profitability through whatever means we can. As of today’s date the full amount of money we have bailed out GuySuCo with cannot be equated or calculated with what sugar has given to us over centuries, and we must never forget the foreign exchange which sugar earns per annum for this country. All of the pundits who say abandon it, can’t possibly be serious, the loss of the foreign exchange alone from our Sugar would ruin Guyana even now.
Tony Vieira
Editor’s note; Mr. Vieira submitted a huge letter which will be continued in our  edition tomorrow. 

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