By Clyde W Thierens
In 1914 the sugar industry was still the dominant sector in British Guiana’s economy. Major changes in this sector therefore greatly impacted upon the country’s economic and social structure. This was evident during World War 1 when the industry profited from high prices as a result of the destruction of European beet-sugar factories. Profits were used to expand the industry so that, by the end of 1920, sugar earnings accounted for 78% of the country’s total export earnings of $26.3 million. However, this was not sustained and, with the onset of decline from 1921, the 1930s world economic crisis saw the country’s earnings decrease to $8.9 million, with sugar contributing $5.3 million.
Coupled with the cessation of East Indian indentureship in 1920, this decline led to drastic changes in the industry. These included efforts to improve productivity and reduce costs through the introduction of new technology. Additionally, there was the amalgamation of resources which gave rise to the emergence of limited liability companies which began to assume greater control of the industry.
Further, traditional sugar concerns expanded operations into other economic arenas like shipping, engineering, drug manufacturing, warehousing, retail sales and insurance, inter alia. The 1939 merger of Bookers-Mc Connell Ltd and Curtis Campbell Co exemplified this.
Sugar production increased despite declining prices in the 1920s. This resulted from improved technology, the introduction of new cane varieties and improved fertilization techniques. Technological innovations enabled Bookers, the emerging industrial giant, to increase its dominance of the industry.
Increasing monopolization of the sugar industry led to it acquiring greater capacity to stifle alternative economic activities. Concentration of ownership created economic monoliths which wielded heavy political clout that enabled them to access capital and other resources to the detriment of other economic pursuits.
The diversification of sugar companies into other areas cushioned the impacts of the economic crisis and helped prevent economic collapse. However, by expanding their activities, sugar companies contributed more to the enlargement of the economy, than to its development, since all of the ‘new’ areas of expansion remained subservient to the sugar interest.
Both World Wars seriously impacted upon the country’s economy by stimulating significant internal developments. The disruption of shipping during World War II seriously curtailed imports and exports. The resulting increased demands for locally grown food posed a threat to sugar dominance. Shortages of spares and fertilizers, plus shifting labour, contributed to sugar production declining by 22% between 1938 and 1945. However, the industry was rescued by the British government’s decision to purchase the country’s sugar on the spot.
After 1945, the industry reorganized with more technological innovations and increasing concentration of factory operations. By 1950, there were indications of recovery, with expectations that the industry stood to benefit from discussions under the Commonwealth Sugar Agreement that promised favourable terms of export. All of these changes impacted on the rest of the economy.
The rice sector was one area that was seriously impacted upon by developments in the sugar industry. By World War 1, the rapid expansion of the industry from the late 19th century had begun to wane. Early in the war rice was exported to the West Indies and the Guianas but, in 1919, this trade was lost as exports were banned to protect domestic needs.
The emergence of rice was a significant economic development since it provided a source of employment outside of the sugar industry, in addition to creating avenues for local investment. This industry attracted labour away from the sugar estates and thus contributed to increased wages for the depleted estate labour force. This was however countered by increased mechanization in the sugar industry. Rice development was seriously hindered by the sugar barons’ use of their political clout as they only allowed rice to flourish when it was in sugar’s best interest to do so.
However, a number of positive developments served to boost the rice industry. These included the establishment of the Rice Marketing Board in 1932 along with guarantees for good markets. Additionally, the cessation of rice imports, and the Grow More Food campaign of World War II, served to stimulate production to satisfy the local and regional markets. This latter development benefitted other peasant activities as well, as did the creation of the Drainage and Irrigation board, the construction of new local markets, along with the provision of assistance to farmers and the guarantee of good prices.
Also, during World War II, the sugar industry released some 6,000 acres of land to the peasantry. This promoted the idea that the Grow More Food campaign could have provided the basis for the diversification of the economy. This optimism was temporary as, with the end of the war, and the eventual revival of sugar, the programme was abandoned on the grounds that it was too costly. These economic changes, while only posing limited challenges to sugar’s dominance, are still noteworthy since they served to lessen the perception, and also challenged the notion, that the economy had no viable alternatives to sugar.
In relation to mining, the development of the bauxite industry was a major economic change that had significant immediate and long term impact. From its modest beginnings in the export of 2,037 tonnes in 1916, to its peak of more than 1.9 million tonnes (with royalties in excess of $10 million) in 1943, the industry emerged as the most dominant mining activity between 1914 and 1950. While the industry was boosted by increasing demands for aluminium during World War II, and for calcine bauxite from 1949, its success has been credited to the industry being controlled by powerful transnational companies that could effectively oppose the plantocracy.
The development of bauxite seriously impacted on the country’s economy. The bridging of the Demerara River, the construction of roads and railroads, and the establishment of major settlements away from the coastland had significant economic impact. The relatively higher wages in the industry attracted numerous coastal workers away from traditional areas of employment, thus contributing to changing demographic patterns. By 1950, the industry employed 2,500 local workers and was described as “the single largest contributor to the revenue of the colony”.
During this period both the gold and diamond industries attracted workers away from the coast. However, while still being viable economic alternatives, these industries were no match for the bauxite industry. From its prosperity in the 1890s, by 1928 gold production was only 6,083 ounces until, after World War II, production fluctuated between 20,500 and 26,389 ounces. The diamond industry employed nearly 6,000 workers by 1923, with a production of 214,474 carats and earnings of nearly $5 million.
While in both industries there was the formation of local and overseas business partnerships such as the Bartica Mining Company in 1931, development was severely curtailed due to lack of adequate capital investment, communication and transportation difficulties, lack of adequate health facilities and hostility from the plantocracy, among other factors. By 1935, gold had declined as a major export.
Many of the problems that plagued the gold and diamond industries also affected the development of forest industries such as logging. Local production was boosted during the First World War but, by the 1920s this declined as imported lumber could be cheaply acquired due to the world economic crisis. The timber industry failed to make a significant impact upon the local economy despite the creation of a Forestry Department in 1925.Foreign lumber continued to be imported as part of the plantocracy’s policy to hinder the development of alternative industries to sugar through importation.
However, by 1939, while the industry was still being described as ‘rudimentary’, some improvement was noted. Greenheart became the major export product but this was negatively affected by shortages of spares during the Second World War. With the inability to satisfy international demands for this type of wood, other species such as crabwood and mora rose in importance. The balata industry did not play a major role in this period although it provided some opportunity for alternative employment.
Peasant activities during this period were focused on rice farming, the cultivation of local foodstuffs, and livestock and dairy farming. While not being enthusiastically encouraged by the plantocracy, peasant farming enjoyed some measure of buoyancy when sugar was in crisis, or, as in the case of World War II, when local food was in high demand.
While the Moyne Commission recommended the encouragement of peasant farming to secure economic growth, Governor Lethem is said to have been ‘retired’ in the 1940s partly as a result of his proposals for the development of industries other than sugar. One major economic change instigated by the development of the peasantry was the creation of expanded, free domestic markets which enhanced the local money economy. Diversification helped the emergence of local businesses and the penetration of economic activities into the hinterland. Developments in the manufacturing sector also contributed to the local economy with the production of items like aerated drinks, bread, pastry and biscuits, soap, boots, candles and others mainly for local consumption.
