Necessary or Discriminatory? Those $250, 000 Sugar Handouts

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The recent announcement by the government of a basket of goodies for the sugar workers who were terminated when the previous government closed some of GUYSUCO’s sugar estates should not surprise keen observers of the local political scene. After all, the PPP used the closure of the four estates and the attendant laying off of the workers as the cornerstone of its narrative that the Coalition government was racist. It grounded the closures not in economics but in an innate desire by the then Coalition parties to punish Indian Guyanese. It was a narrative that caused panic in the ranks of the Coalition government and drew sympathy from some prominent anti-PPP persons.

Given the history of sugar in Guyana and its location primarily in one segment of the ethnic divide, any attempt to sever it from continuous government subsidy was bound to be controversial. Either the Coalition did not understand this truism at all, or it underestimated its potential to cause trouble for the government. Looking back, one may conclude that while the economic calculations were correct, not enough thought was given to the political strategy needed to pilot such a sensitive undertaking through Guyana’s dangerous political waters. In the end the PPP seized the opportunity to control the narrative and the rest is history.

The promise to reopen the estates and reinstate the workers was a central plank of the PPP’s manifesto. In a sharpened political climate this was an emotional appeal to a section of the community which has come to tie its economic fortunes to sugar. Whether the party understood that its promises were not economically realistic and that like its predecessor it would have to bite the proverbial bullet is open for debate. The stark truth is that politics aside, the sugar industry in Guyana cannot be reformed without drastic interventions of the type the Coalition put in place.

So, it was not surprising that Vice President Jagdeo announced that in one year the government has pumped $14 billion into GUYSUCO’s operations. This is a staggering amount of money to pour into an industry that is not expected to bring revenues into the treasury. In effect, the government is using the country’s revenues to satisfy a campaign promise. It also confirms Professor Clive Thomas’ fear that the government would use the income from oil to boost its pet projects rather than to pursue a developmental thrust aimed at lifting the country out of poverty.


While not saying so in plain words, the Vice President also admitted to difficulties in reopening the estates. He further admitted that Skeldon estate remains a white elephant. These admissions are clear evidence that the Coalition’s moves to right-size the industry were on sound economic footing. For all its boasts, the PPP’s promise to reopen the estates reflect more politicking than serious economic thought and action.

How does the PPP intend to pacify the workers who it intentionally or unintentionally fooled? It has resorted to the old political approach of patronage. But this time it is laced with deep consequences for race relations in the country. Mr. Jagdeo announced a grant of $250, 000 for each severed worker—a bill that amounts to $1.7 billion dollars. Coming on the heels of a massive flood relief to mostly Indian Guyanese farmers, this latest move has already opened the government to renewed charges of ethnic bias or institutional racism. But the Vice President did not stop there. He announced the launch of a training school to retrain sugar workers in skills that are in demand in the oil and gas industry. He all but declared that these workers would be guaranteed preferential treatment in the new industry.

This publication believes that this is a retrograde step. The severed workers have already received their severance pay. We are sure that many of them have moved on to other forms of employment. So, the grants are less about propping them up economically and more about transferring revenues to supporters. We do not oppose government cash transfers to citizens in the face of the COVID induced difficulties. But we are opposed to the clearly discriminatory approach by the government. How do you justify giving those hefty grants to one section of the workforce while not giving a minimum pay raise to other sections?

To say the least we are appalled that the government can be so crass in its approach to governance. It shows little sensitivity or concern for our fragile ethnic dynamics. In fact, Mr. Jagdeo is reported to have brushed these concerns aside. According to him, it is “important and necessary spending.” For what it is worth, this publication lends its voice to the growing pressure on the government to change course. The very survival of our country as a plural space grounded in equity and unity is at stake. That we are entering a zone pregnant with uncertainty and instability is not an understatement.

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