The Guyana Sugar Corporation (GuySuCo) has been failing for years yet there remains denial. Billions of dollars from the Consolidated Fund have been used to salvage what has become a company swimming in debt and producing a product (sugar) that will not break-even much less see profit. The reality continues to be ignored for pure political reason, even if this means money is being diverted from more pressing and worthwhile national projects.
Given the petty partisan politics surrounding sugar, some have been tiptoeing around speaking truth to power, and others use this ugly political reality to take greater financial advantage. Those who dare speak the truth about the loss-making GuySuCo, which has become an albatross around Guyanese neck, are sure to be countered with accusations of bias, hate and discriminating against sugar workers.
Thus it was most refreshing to hear none other than GuySuCo Chief Executive Officer (acting), Mr. Sasenarine Singh speak truth to power. He did just that on Monday in an interview with Globespan24X7. Probably it was the comfort of being interviewed by friend Dr. Asquith Rose and moderator Mr. Charles Sugrim. Mr. Singh spoke his mind and laid bare what many know and some want to deny.
He admitted GuySuCo is selling bulk sugar at half the price of production which does not make sense. He solidified the view that poor Guyana cannot afford to subsidise the taste of foreign countries that are financially better off. Even as admittance is made of this reality, the acting CEO hopes to pull wool over Guyanese eyes. It is his belief that should GuySuCo focus on value added manufacturing the company is likely to get a greater percentage of the business at a profitable level.
Sugar is being produced at approximately US 41cents and selling at US13 cents. To get to value added will incur more spending from the Consolidated Fund because if the primary product (raw sugar) is being produced at a loss, value added is not likely to do much better. In these political times people can get away with justifying wastage of taxpayers’ money, making the correct soundbites or having the correct political alignment. GuySuCo is an example.
GuySuCo has also lowered production targets, creating a false sense the company is producing at optimum and targets are being met. Even the acting CEO admitted to the downsizing which he euphemistically called setting “moderate targets.” This is a false sense of security and makes no financial sense. And even if one were to accept the acting CEO’s argument that the United States has been providing preferential price for 12,500 tonnes and hopes to do more, it is not sufficient. In order for GuySuCo to at least break-even much more has to be done.
The problem with GuySuCo is not that it is “too stuck in democracy” as per Mr. Singh. Neither is he being financially truthful, blaming the A Partnership for National Unity + Alliance for Change government for allegedly turning the three closed sugar estates into “junk yard,” in need to “rebuild from scratch.” Turning these around will not positively impact sugar’s financial fortune.
The problem is sugar is no longer profitable in the international market. It remains better to produce sugar for local not international consumption, even at minimal loss. No matter how much billions are taken from the Consolidated Fund to bailout GuySuCo the situation will not change. The truth of the problem is-GuySuCo is failing badly and has been for more than two decades. Politics will deny reality and politicians will continue to throw good money behind bad goods. It is the nature of Guyana’s petty partisan politics.
