GUYSUCO’S CLOSURE WILL BE A RECIPE FOR ECONOMIC DIASTER

Nov 24, 2016 Letters

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Dear Editor,
Please permit me space to comment on a shocking development. I am still in disbelief at the recent statement of the government regarding the condition of Skeldon Sugar Estate. Mr. Editor, it is nigh improbable that the state of the art processing facility is falling apart as we are led to believe. GUYSUCO’s annual reports show clearly that the estate is functioning and while not performing to full capacity is producing a significant percentage of GUYSUCO’s total output. It is baffling that a factory that produces such a large portion of the company’s output is on the brink of collapse.
Mr. Editor, I am of the inflexible opinion that the estate may not be perfect but in very good condition. I also believe that the statement is part of a long-term con on the Guyanese people to perpetuate the stereotype that Guyana would be better off if GUYSUCO is dead. The gradual closure of GUYSUCO started immediately after the 2015 elections with Wales and LBI estates already ticked off. Not so long ago the Government had also announced plans to close Canje estate. The reason the Skeldon estate was not closed immediately was because it remains the centre-piece of GUYSUCO and to date, remains the company’s most productive plant. When the government succeeds in closing Skeldon, we will see the final nail in GUYSUCO’s coffin.
For this very reason, the Skeldon estate is as monumental a piece as it is symbolic. There is no evidence to suggest that the Skeldon estate itself is running at a loss. The overall profitability of the estate should be considered rather than just the inefficiencies highlighted. Additionally, Skeldon remains integral to the entire production process; the technology available at Skeldon is unavailable at other estates and would most certainly hinder not only the other estates but the total production overall.
Mr. Editor, selling GUYSUCO’s estate to campaign donors was the plan from the very beginning. This is lucidly demonstrated by a gentleman who donated generously to the coalition’s campaign coffers; he is tipped to obtain Wales estate for pennies on the dollar. All the while another campaign donor has eyes set on Skeldon; incidentally, one who gained billions of taxpayers’ money in a settlement immediately after the government came to power.
If my above statement is speculative, the appointment of Clive Thomas as the head of GUYSUCO is proof that the incumbent had intentions of closing the industry from the very beginning. Why else would someone of sane mind appoint a man who has spent the latter half of his life lobbying to close the industry, to save it? The only logical explanation is that the government had every intention of closing the industry with Clive Thomas as the architect of the operation. One of the biggest issue that GUYSUCO faces is that the industry is not being analysed by critical, objective minds. Instead, many of those making decisions on the industry’s future are viewing the issue through ethnic lens.
The economic effects of even a partial closure of GUYSUCO would be colossal. Fundamental macroeconomic logic could be used in observing the ‘negative multiplier effect’ that such a closure would have. The complete closure of the sugar industry would result in an economic slowdown with an impending collapse. Mr. Editor, 28,000 jobs are impossible to create for an economy under the direction, or lack thereof, from the APNU+AFC led-coalition. Apart from a call/service centre, an investment resulting in a few hundred jobs, what significant investment has this government garnered since coming to office? The answer Mr. Editor is clear for the public to see. Cognizant of this gross incompetence by the coalition, and their misguided economic logic, how would one create 28,000 jobs for the GUYSUCO workers upon closure? This task is highly improbably and, certainly impossible, under this government.
In the new era of Globalization, with increased international capital flows, labour-intensive production is harder to create in nations like Guyana where our labour cost is considerably higher and much scarcer than countries like China and other Asian giants with an abundance of labour. It is now common knowledge that many of the jobs created in those nations in the contemporary post-structural adjustment era were labour intensive and sought to utilise cheap labour. Given relative labour scarcity, Guyana has no cheap labour for international capital to utilise.
Significant advances in technology since the ICT revolution in the last three decades means that production now uses less human labour in what is becoming an increasingly capital-intensive world. The capital to labour ratio as is evident has dynamically changed/transformed. This knowledge makes the 28,000 jobs that GUYSUCO maintains gold dust!
The importance of GUYSUCO is compounded by the fact that Guyana’s unemployment rate is estimated to be upwards of 20% and youth employment significantly higher at approximately 40%. If Guyana’s labour force is an estimated 350,000 then GUYSUCO easily accounts for nearly 10% direct employment of the labour force and possibly another 5% or more indirect employment through spill over effects. It thus becomes imperative that GUYSUCO be rescued from the clutches of this government who, in their haste to affect any change, seem to not comprehend the magnitude of GUYSUCO to the sustenance of the Guyanese economy in a multi-dimensional structure. Mr Editor, I reiterate, any change in GUYSUCO’s employment would be nothing short of catastrophic.
Stephen Kissoon
Editor’s note; because of its length, we will have to continue Mr. Kissoon’s discussion in our Friday edition

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