Steep devaluation is coming for sure

Apr 08, 2017 Letters

Dear Editor,
I couldn’t believe what I was reading when I got the COMBAT newspaper in my inbox? For the record, the COMBAT newspaper is printed by the GAWU, the largest workers union in Guyana. In the COMBAT newspaper, it clearly stated that as at the week ending March 25, 2017, Guysuco produced 20,037 tonnes of sugar from a target of 74,172 (or 27%). I was advised only 6 weeks was left before the 2017 first crop terminates. As expected Skeldon produced ZERO tonnes to date because it was prematurely shut in this 2017 first crop under the pretext of another lame excuse from Hanoman and friends.
But what this exposed is that there was no proper project-planning at that estate in the second crop of 2016. This is shocking because even in the hard days in the 1980’s, Guysuco always prepped its factories and machinery at the end of the previous year’s second crop in preparation for the next first crop. So how come the management of Skeldon did not know they had a problem on the co-generation plant before the first crop started?
I immediately called my contact in Guysuco to find out the prospect for the next 6 weeks and when I thought that GAWU was being pessimistic, the Guysuco insider dropped an even bigger bombshell on the table. I was advised that Guysuco is not expecting to produce more than 45,000 tonnes for the 2017 first crop (60% performance). This will result in an immediate loss to the nation of some US$16 million in real foreign currency inflow. So how can the Minister tell me and the rest of the public that there is enough foreign currency in the system for the first half of 2017? It is either he is being economical with the truth or does not know elementary economics. I can now concur with who said that Guyana will be importing sugar for domestic consumption in under 2 years time. At this rate, his prediction will come true before its due date.
This Granger administration is its own worst enemy. By choosing to play hard-ball on this sugar issue, they are putting an entire nation at risk. As the Granger administration continue to play politics with the economy, my humble advice to the workers is simple; do not become a collateral damage for a second time as the “elephants in the room mash the grass”; DE-RISK and FAST. By de-risking, I am humbly advising the workers with savings to withdraw all unnecessary cash from your savings accounts and invest it in something that can store real value like gold or silver or polished diamonds.
Guyana is heading swiftly into a season of devaluation and I will not be surprised if by Christmas the exchange rate will be G$250 to US$1. In layman’s language, if you have G$100,000 in your savings account – at the beginning of 2017, it could have bought US$485. By the end of 2017, it will more likely buy around US$400, which mean the poor man with a savings account of G$100,000 would have lost US$85 in value or almost 1/5th of its 2016 value over a 12 month period. That is steep.
The teachers and nurses who lost lots of money during the 1988-1990 period will tell you how their life-savings vanished into thin air within 2 years. The ordinary people should not make the same mistake again. My humble advice this time – around invest in gold, silver and polished diamonds. Based on the commodity markets, all three of these precious metals are expected to increase in value in the next 3 years. But this also means you have to beef up your personal security. Man why does the working class always have to get the wrong end of the stick every time?
Sase Singh

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