IMF reinforces support for sugar reform

Sep 12, 2018 News

…but calls for safety net for affected workers

The International Monetary Fund (IMF) still thinks that the Government of Guyana has made a good move in its decision to restructure and down-scale the local sugar industry. However, IMF is concerned about the effect the downsizing can have on the social fabric of the country if not managed properly.
In its latest staff report, IMF said that the restructuring of the Guyana Sugar Corporation (GuySuCo) included a reduction in its workforce and the establishment of a Special Purposes Unit at the National Industrial and Commercial Investment Limited (NICIL), tasked with divesting some of its assets.
IMF noted that as part of that process, different revenue streams are being pursued, including co-generation of electricity with sugar cane bagasse, production of plantation white sugar, and investment in packaging facilities.
That process envisions the privatization of three out of six sugar estates. It involves significant upfront costs, but should strengthen the fiscal position in the medium-term by placing a downsized GuySuCo on sustainable financial footing.
The IMF said, “Staff emphasized the importance of providing a safety net to protect those affected by this process given the economic and social implications, geographic concentration of the displaced workers (which amplifies spillovers to the impacted regions’ economies) and the difficulties sugar workers may face transitioning to other occupations.”
A few days ago, the Guyana Agricultural and General Workers’ Union (GAWU) expressed concerns about the provisions being made for displaced workers.
GAWU said that the APNU+AFC Government has sent home 7000 sugar workers without any plan to address their welfare.
GAWU President, Komal Chand, said this has to be among the most callous of decisions ever made by any government in the country’s history.
He made these and other remarks at the recent Sugar Conference which was held at Grand Coastal Hotel, Le Ressouvenir, East Coast Demerara (ECD).
The conference was convened to reflect on whether the right decisions regarding the industry were made by the government; what can be done to overcome the difficulties the industry now faces, and how the unemployed can approach the future to ensure sustainability and viability.
Chand said that the Government by its very actions has seriously affected communities; shattered the hopes of the youth, and pushed thousands of Guyanese into misery-filled lives.
The GAWU President said, “In the three years of the Granger Administration, we have seen the Government closing estates despite its own Commission of Inquiry saying that it shouldn’t. We have seen plans to transform cane cultivations to other ventures failing miserably. We have seen the Government saying it would divest estates it previously decided to close without any explanation for the change of course.”
Chand continued, “We have seen the Sugar Corporation substantially stripped of its assets and its shares transferred. We also cannot forget the imbroglio regarding the Board of Directors. Neither can it escape our attention that the industry has borrowed $30 billion (a bond from Republic Bank) without a plan. This is akin to being up the river without a paddle. Is this the clear future the President claimed he had for the sugar industry?”
The Union President emphasized that GAWU will continue to hold steadfast to its position, which states that the sugar industry must be made to succeed as a large number of Guyanese depend on its operations.
He said, “We have seen the ramifications of the vacuum created by sugar. But, success must involve a collaborative and comprehensive approach. There is no singular magic bullet but hard work, commitment, knowledgeable personnel, and of course, a motivated workforce.”
Chand said that these factors are critical elements in overcoming the difficulties facing the industry.

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