Exiting office with the sugar industry in its most catastrophic state since 1990, the PPP/C will be harshly judged by history for its dereliction of duty towards thousands of sugar workers and an important segment of the economy. While the party has remained silent on the virtual bankruptcy of GuySuCo declared last week by its handpicked CEO, Dr Rajendra Singh, the sugar unions and the majority of workers in the industry will know that the problems accreted over the last decade and have gathered a momentum that now threatens the survival of the heavily-indebted corporation. Instead of showing the leadership required over the last 10 years, the PPP/C opted for innumerable excuses and kept on returning to the same pool of its loyalists in a bid to return the sugar corporation to viability. Nothing worked and paralysed by the fear of having to apply painful prescriptions to an industry in which its vital and historic political constituency is employed, the PPP defaulted on its governance covenant with the people.
Faced with a similarly serious problem, then President Hoyte in 1990 took the courageous decision to hand the management of the industry over to Booker Tate. Progressively, field performance and sugar production began to grow until 2005, the year of the Great Flood, declining since then on many fronts coupled with vastly changed market prices, poor labour supply, increasingly unpredictable weather and the Skeldon factory millstone around its neck. Whereas in 1990, the corporation had access to a relatively high-priced preferential market, the PPP/C has departed the stage with market conditions the worst that have perhaps been seen in the history of sugar here; all the more reason why comprehensive restructuring during 23 years of PPP/C governance was imperative. The PPP’s history will now be saddled with the ironic burden that under its stewardship, the industry, whose workers gave the party its raison d’être, an intrinsic bond with the working class and political currency has been left hanging perilously close to the edge.
The PPP/C had ignored numerous scholarly admonitions about the dangers that the industry faced. Distinguished economist Dr Clive Thomas in many columns in this newspaper over the years pointed to the convergence of numerous negative factors which were making the sugar industry in its present configuration unviable. In a column in the Sunday Stabroek of January 5, 2014 entitled ‘The Guyana sugar industry: The point of no return’, Dr Thomas noted that out of alarm at the state of the industry in 2011, he devoted 20 columns between May 29 and October 16 of that year underscoring the need for radical reform and restructuring. In the January 5, 2014 column, he said “I am now more than ever convinced that the crisis in the sugar industry has passed its tipping-point or point of no return. This means that all hopes for a rational, considered and ordered reform and reconstruction of the industry are lost.”
Noting eight areas that he had addressed in the columns of 2011, he said the “present configuration of the industry is leading it to produce less and less sugar at a higher and higher cost! Given the inevitably resultant losses, this is clearly an unsustainable commercial dynamic for GuySuCo’s operations. In light of this both the EU’s continuing sugar assistance and government’s bailouts of GuySuCo can be viewed as seeking to rescue the industry from total collapse. Such a situation however represents, in essence, a classic case of throwing good money after bad. As worldwide experience has shown, while it is hard politically for governments to stop providing unwarranted subsidies to state industries, it is far worse for them to yield to those interests that are driving the need for the subsidies. The misallocation of national resources implicit in this posture is inevitably bad for everyone economically, but it will eventually also carry a devastating political cost, given the size and configuration of the sugar industry in Guyana’s political economy.”
His warnings and those from other quarters seem close to reality now. This is the first major challenge for the APNU+AFC government and the livelihoods of thousands of Guyanese in Berbice and Demerara are at stake here. It must approach this crisis with great care and dispatch. It will undoubtedly find stop-gap financing for the industry at which point the medium to long-term future of the industry must be confronted. It has committed to a Commission of Inquiry into the sugar industry and must make the right choices here in terms of membership. It must go for tested expertise and involve the workers in the industry and other stakeholders. There should be well-managed public hearings so that the rest of the country can be apprised as to the true state of affairs of this sector. A narrow timeline for the delivery of an interim report with major findings and short-term recommendations should be established followed by a final report. There should be a full debate in Parliament on the findings and the Economic Services Committee should seek testimony from other experts as it sees fit.
Presumably all options will have to be addressed including privatization, greater private cane farming, rationalization and reorientation of the industry. These are difficult times for the sugar industry and the new government and stakeholders must carefully evaluate the best possible options for the workers and the country.
