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| The Government, in the Supplementary Budget, has approved $3.4 billion for the ailing Guyana Sugar Corporation (GuySuCo). The increase in spending comes even as GuySuCo is not only lowering production targets but also unable to meet the lowered targets.
During the 2020 Elections, the People’s Progressive Party/Civic (PPP/C) campaigned on a promise to reopen estates closed by the A Partnership for National Unity and Alliance For Change (APNU+AFC) government who said they were “rightsizing” GuySuCo to make it more viable. In Opposition that party accused the government of punishing sugar workers because they supported the PPP/C.
The two-year Irfaan Ali government is yet to open the estates as sugar workers and Guyanese await a strategy that would see the corporation turnaround. But Mr. Ramon ‘Rambo’ Gaskin, economist and activist, rubbished the PPP/C’s promise.
In conversations with Village Voice, Gaskin said the government never had any intention to reopen these estates because for several years these estates have been costing the Treasury billions of dollars. He said the reason why sugar is costing the country billions, not GuySuCo which continues to operate at a loss, essentially has to do with the European Union (EU) 36 per cent cut in price for sugar being sold to Guyana.
Mr. Manderson from the European Common Market came down here and met local officials and informed them about the new realities, said Gaskin. And whilst the “EU gave Guyana money to come out of sugar because Guyana cannot make it, Mr. Bharrat Jagdeo said we can make if Guyana moved to 450, 000 tonnes of sugar and at that time Guyana was producing 250,000 tonnes. ”
The Bharrat Jagdeo administration, in spite of the economic reality as presented by the EU and the new selling price for sugar, made the investment with the Chinese factory at Skeldon Estate, for the hefty sum of US$220 million. At that time the investment was larger than the National Budget. The Skeldon Factory was a failure which Gaskin feels is due to the “Chinese not knowing anything about producing a sugar factory,” hence couldn’t build a factory to so perform.
Seeking his opinion about the APNU+AFC government closure of estates, Gaskin said, whilst the David Granger-Moses Nagamootoo administration took the decision, however, the problem with the coalition was that they decided to implement the decision on the eve of elections. “On the eve of the elections you do not do things like, you have to do it after the elections,” said Rambo. It is his opinion the timeliness in the implementation of the decision cost the coalition government a lot of support and they lost the election.
“Sugar cannot make it; it hasn’t made it for the last 20-something years since the European Union cut the prices.” The activist feels all is not lost but GuySuCo must reconstruct itself to break even. In order to do that the government will have to reduce the sugar estates to four (4) and reorganise it to produce value-added-product, not just sugar that we are selling here in the supermarket, said Gaskin.
He is proposing the corporation makes molasses and rum because that is where the profit is in sugar. Citing the Demerara Distillery Limited (DDL) as a model example, Gaskin said DDL is making billions of dollars on the distilling of rum. He noted Guyana has only one rum manufacturer and there is no reason why GuySuCo cannot get into the rum business and make money. “That is the solution to the problem really.”
In the meanwhile, sugar is scarce in the local market as GuySuCo remains besieged by internal management and other competencies challenges. The corporation is headed by Chief Executive Officer (CEO), Mr. Sasenarine Singh, who had no prior experience managing any business of GuySuCo’s magnitude and complexities, nor professional experience in the sector.
Mr. Seepaul Narine, President Guyana Agricultural and General Workers Union (GAWU) in June called on President Irfaan Ali to fire Singh. Mr. Tony Vieira, recently resigned as Deputy Chairman of GuySuCo Board but not before clashing with Singh on financial and production management of the corporation.
Earlier this year President Ali held a meeting with managers and supervisors of the corporation on a way forward Noticeably absent from the meeting was the CEO. The President, a few days ago, in apparent effort to ward off criticism of the additional billions budgeted from the Treasury that will go to the corporation made another promise to revitalise sugar. The evidence, thus far, shows this is unlikely to happen following the present course of action.
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