Minister Jordan sparked an ailing sugar industry

Oct 11, 2018 Letters

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Dear Editor,
The Honourable Minister of Finance, Winston Jordan, in a letter appearing on the October 09, Stabroek News, took time from his duties to respond to Stabroek’s editorial of October 07 regarding his stewardship of the economy.
The Minister, in his letter, addressed several matters and sought ignominiously to cast blame on others for his Government’s carelessness in managing the affairs of the state. Minister Jordan in his letter, apparently using a basket to fetch water, among other things, referred to the sugar industry.
The Minister says “…our government has provided a bailout for GuySuCo – a whopping $37 billion to date”. But what the Finance Minister didn’t say is that the Government, of which he is a leading member, installed the Hanoman-led IMC, which collected the billions he referred to, but which oversaw the diminution of the industry.
In Minister Jordan’s stint, so far, as Finance Minister, sugar production fell by over 40 per cent; sugar foreign exchange earnings fell by a whopping 38 per cent, and the sugar labour force contracted by some 7,000 employees in the period.
Interestingly, prior to the Minister taking up the helm of the Finance Ministry and having direct responsibility for our nation’s economic state of affairs, the sugar industry, with smaller allocations was able to sustain seven estates and 17,000 workers.
In the three years prior to Minister Jordan’s leadership as Finance Minister, the sugar industry received from the Treasury aggregately $15.36B. In that period, the Corporation was able to approve pay rises for its hard working workers and it respected workers benefits and conditions.
Interestingly, under Minister Jordan’s Government the only increases went to what is deemed “Key Management Personnel” with expenditure to this group of a handful of the industry’s echelon rising by 43 per cent between 2013 and 2016.
But while the Minister carps about the state support provided to the industry, which we must add is not unusual globally, he ignores what those sums meant to the wider economy. Employment costs associated at now closed Skeldon, Rose Hall, East Demerara and Wales Estates totalled G$11.941B in 2014, according to the Sugar CoI report.
It is estimated that workers, conservatively, utilized about 85 per cent of their earnings on the purchase of goods and services. In other words, directly shop keepers, market vendors, fisher folk, transportation providers, etc. have lost $10.15B.
Indirectly, using the income multiplier formula, a further $70B has been removed from the economy. This is a massive and substantial hit and one which many, especially in rural Guyana, may not be able to recover from.
Looking at the industry as a whole, using the 2014 data, we have estimated that the sugar industry generated G$118.3B in economic activity. Without a doubt, the Government, through tax receipts, was recouping the support it was providing.
The Minister then says, unbelievably, the Government has to find “…$5.7 billion severance payment for workers”. But it was the Government in the first place that decided to send the workers home. It, therefore, follows that the Administration has an obligation to meet the workers entitlements which we must reiterate are being paid contrary to our nation’s laws.
For the Minister to seemingly complain about the repercussion of a decision he would have had a hand in is simply disbelieving and seems to give even more credence to the Stabroek News editorial.
We saw, too, the Minister, seemingly, lamenting “…the transfer to central government of expenditure previously borne by GuySuCo, including D&I and community centres…” This is a most incredulous statement by the Minister. The admission by the Minister nevertheless is revealing and seems to demonstrate that the Government hadn’t fully considered the ramifications of its mis-guided adventure in the sugar industry.
Certainly had a thorough examination been done, as was suggested, then Minister Jordan and his colleagues would have known about what he is now seemingly decrying.
From the Minister’s reflection on sugar, he has served, no doubt, to demonstrate how important the industry was not only to its workers and their dependents but to the wider economy. It also glaringly illustrates how nonchalantly the Administration approached the sugar industry in spite of several warnings not to proceed in the direction it ultimately went.
So while Minister Jordan is upset by the licks he is getting from several quarters, they are not unjustified and it clearly tells us that given the current trajectory the future could be one filled with great difficulty and upset.
Yours faithfully,
Seepaul Narine
General Secretary
GAWU

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