Subsidising Failure, Protecting Politics

Dear Editor,

The sugar-rum narrative is not economic policy—it is electoral strategy at the taxpayer’s expense

There is a dangerous and intellectually dishonest narrative taking root in Guyana—one that seeks to chain the survival of a failing, state-subsidised sugar industry to the success of a highly profitable private rum company.

Prime Minister Mark Phillips’ claim that Guyana “cannot produce world-class rum without sustaining sugar production” is not only misleading—it is a calculated deflection from the real issue: decades of unchecked public spending on an industry that has consistently failed to justify its cost.

Let us deal in facts, not sentiment.

GuySuCo has absorbed tens of billions of dollars in taxpayer subsidies over the past three decades. Year after year, it has failed to produce sugar at a cost competitive with global prices. It remains structurally inefficient, operationally challenged, and financially dependent on the Treasury for survival.

In stark contrast stands Demerara Distillers Limited (DDL)—a private, profit-making corporation that has successfully repositioned itself in the global premium rum market. It has done what efficient enterprises do: adapt, innovate, and grow.

But here is the contradiction the Prime Minister refuses to confront.

If DDL’s success truly depends on sugar, then why is the Guyanese taxpayer being asked to subsidize that dependency? Why is a private company’s supply chain risk being transferred onto the public balance sheet?

Serious businesses do not operate this way. They secure their inputs. They invest in their supply chains. They acquire or partner where necessary to ensure stability and control. If molasses is as indispensable as the government claims, then DDL should be at the forefront of acquiring, restructuring, or directly investing in sugar production.

That is what vertical integration looks like. That is what responsibility looks like.

Anything less is a quiet but deliberate socialization of cost and privatization of profit.

And the question that exposes the fragility of the Prime Minister’s argument is this: what happens when the subsidies stop?

If a future administration—faced with mounting fiscal pressures or shifting priorities—decides it can no longer justify injecting billions into GuySuCo, does DDL cease operations? Or does it simply source molasses from the international market, as any rational business would?

The answer is obvious—and it dismantles the entire premise.

Which brings us to the uncomfortable truth at the heart of this policy posture: this is not economics. This is politics.

The continued subsidisation of sugar has long functioned as an electoral instrument—preserving jobs in key constituencies, sustaining rural economic dependencies, and maintaining a support base that is politically valuable. In that context, the invocation of rum is not an economic argument; it is a convenient narrative, designed to make an unsustainable policy appear strategically necessary.

A political necessity is being dressed up as an economic imperative.

Yes, sugar is part of Guyana’s history. Yes, rum is part of its identity. But history cannot be financed indefinitely by taxpayers, and identity cannot be used to obscure fiscal irresponsibility.

If the government believes sugar has a future, it must present a transparent, time-bound plan for viability, with measurable outcomes and accountability. If it does not, then it must stop constructing artificial linkages to justify its continued existence.

Guyanese are not blind to this contradiction. They are being asked, year after year, to fund losses they do not control, for benefits that are politically distributed but economically unsound.

Guyana cannot build a modern economy on this foundation.

It is not strategy. It is subsidy without end, sustained by political convenience and disguised as national pride—and it is time that fiction is called out for what it is.

Yours truly,
Hemdutt Kumar