For decades the PPP Govt. was bankrolling a dead industry

Jul 24, 2017 Letters

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Dear Editor,
GuySuCo is not indispensable. There has been much clamour about “sugar is what brought us here” and from the PPP/C’s perspective that sugar is too big to fail. What really brought our forefathers here were profits – the real driving force of any business. We live in a dynamic world, change is inevitable. What was good four decades ago is no longer good today. While we must be thankful to the sugar cane for giving birth to our nation, we must not condone its inability to make a profit. GuySuCo has failed to make a profit for over a decade incurring a debt of over 80 billion dollars in that while. It is of little wonder that what was a national asset in the seventies has now become our most accursed liability. GuySuCo has become a political football.
While the coalition seems interested in phasing it out, the opposition is crying foul. The PPP/C while in power poured billions into GuySuCo on a yearly basis at the expense of the entire nation and were unable to make it profitable; not once through those years did they attempt to give GuySuCo any ultimatum such as “produce or perish” as the late LFS Burnham would have done. It is criminal for any Government to tolerate failure of a state own company producing a commodity for so long and not do something drastic to arrest such a sad situation.
I can understand a Government making a loss on say the ferry service from Essequibo because sometime in the future every Guyanese might for business or pleasure travel on that ferry and benefit from a low fare. How does dumping billions in GuySuCo benefit a citizen from the Essequibo Coast or the North West district?
Most of our Caribbean neighbours had closed their factories a long time ago. This is testimony that cane sugar is no longer a lucrative crop. Yet the PPP/C remains adamant, saying that they would not have closed the industry. Imagine GuySuCo made a loss for almost two decades .This is unheard of in any commodity business on an international scale – the equilibrium for desperation of the most idiotic entrepreneur would have long been broken. Yet the PPP/C would have kept the industry. This is a testimony of the degree of betrayal Guyanese had to endure at the hands of the PPP/C and an acknowledgement that they had wanted to keep GuySuCo for political expediency. I have no problem with that. My point is, if you can’t make it profitable you shouldn’t be allowed to keep it.
At a rally in Whim on their election campaign in 2015, Ramotar promised that they were going to “to pump 20 billion dollars to mechanize the industry” and the crowd cheered. That was audacious! GuySuCo’s factories are mechanical- to mechanize the industry further means to get machines to plant, cut and manure cane. To do that would have made 12,000 jobs redundant. I guess no one at the rally saw it that way. They had no plans to extricate GuySuCo from its vampire mode. Internationally some private companies continue to plant sugar cane and are making profits while GuySuCo sinks deeper in the red zone.
Here the economist will tell you to look at the ownership and management of the industry. The answer would be the state and the government respectively. GuySuCo remains in the communist mode of production which has been tested and proven inefficient in the motherland of communism (Russia). There is a popular saying in business-”nothing beats the eyes of the master (owner)” meaning that no one can look over your business better then yourself. Ask the politicians who own GuySuCo and they will tell you – the people of Guyana. What nonsense! The PPP/C was running our GuySuCo at a loss for two decades and not once had they tried to get our opinion on what to do. Now the coalition wants to close or sell out without consultation too.
The Coalition having spent some 80 million on a COI on GuySuCo that has failed to reveal the findings and recommendations for the way forward for the entity. The opposition is of the belief that their present action-closing of Wales and others to follow is not what the COI recommended. It should be considered a criminal act; for any government to spend 80 million dollars of tax payers monies to garner advice to salvage an ailing state owned company that is so intricate to the lives of almost half of a Country’s population; to subvert that information and proceed with an agenda that is contrary to what it had promised that segment of the electorate in its election campaign.
If this is not deceit-what is? It might be prudent to install a clause in our constitution, where the manifesto of a presidential candidate should be a signed legal contract to society. Failure to comply after acceding to the presidency could result in impeachment. Obviously we would not want one for something as vague as “the good life beckons.” We’ll take one for something as concrete as- “I will not close the sugar industry.” Something needs to be done to hold the politicians to their promises.
We may have been better off if the PPP/C had the wisdom to recognize failure and close the industry a long time ago and put it up for divestment using the monies spent to keep it afloat and the US 200 million spent to build the Skeldon factory to continue paying workers half their salary for a five year period to offset the social consequences of unemployment. I was heartened to learn that labour cost constitutes 55 to 60% of GuySuCo’s cost of production. This is huge. This is evidence that GuySuCo could only be profitable with slave like or cheap labour. The PPP/C should have acted on this information.
The ball is in the coalition’s court to consider this option. Desperate situation requires desperate solutions! There is also a case for diversification. Hemp has the potential to rescue GuySuCo but the Government doesn’t seem interested. It seems as if they are being held at ransom by the US drug enforcement agency on this issue; the Minister telling the Hemp Association to find out how the law could be changed to facilitate the growing of Hemp is ludicrous. Can’t the Ministry of Foreign Affairs get that information?
Given the bureaucratic controls and the attitude of workers, I would recommend divestment ahead of diversification. I do not believe a state own managed company producing any commodity -even one deemed to be as profitable as hemp – can turn a profit-except there is a preferential market for that product Governments should keep in the business of providing services and facilitating progress and not in the production of commodities.
Rudolph Singh

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