Former Presidents Donald Ramotar and Bharrat Jagdeo yesterday disputed the $348B sum the European Union (EU) said it has pumped into the sugar sector here from 2006-2013.
“I heard the EU Ambassador (Jernej Videtič ) say that they have given some $348B to Guyana for sugar. He obviously has made a very serious mistake because that is not true. As far as I know the EU has given no more than $31M USD ($6.3B) [during the PPP/C’s term in office],” Ramotar told Stabroek News yesterday.
“What he should do is give a year by year figure for sugar. Make public how much was given for each individual year…This is a serious mistake, a definite mistake and makes us look bad,” he added.
Last Thursday, Videtič informed that the EU would have provided a total of $348.5 billion in budgetary support to Guyana over a seven-year period; 2006-2013.
“Between 2006 and 2013, Guyana was allocated $348B. The last payment under the sugar programme was delayed as it was put on hold because we were waiting for the eligibility criteria to be met, so this payment was executed in October 2016,” Videtič told a press conference.
Ramotar served as President from 2011-2015 taking over from former President and now Opposition Leader Bharrat Jagdeo who governed from 1999-2011.
Ramotar also pointed out that in addition to serving as the nation’s leader from 2011-2013, he was active in the sugar sector and has vast knowledge of the industry. It is because of this he says he would have been aware if the sums stated by Videtič were true.
In a statement last night through former Attorney General, Anil Nandlall, Jagdeo said he wished “to reject as a total falsehood, the contention being peddled in the media that the European Union (EU) paid to Guyana, the sum of G$348.5B as compensation for the 36 percent cut in preferential market for sugar.
“In fact, the total sum paid to Guyana is approximately G$30B. Indeed, the final installment of G$5.4B, was paid to the Coalition Government in October last year. The sum of G$348.5B is over ten times the sum actually received by Guyana.
“More than G$30B was spent by the PPP/C Administration on the Skeldon factory alone.”
Jagdeo said he will address this issue more expansively upon his return to Guyana later this week.
The European Union envoy on Thursday explained that the last payment, under the sugar protocol would be made in September of this year and after this there would be no more to be had. “There are no more funds from this protocol. This is it,” the EU Ambassador said when asked by Stabroek News if additional aid would be given to the sector.
Head of Co-operation at the EU Mission in Guyana, Christof Stuck, had explained in detail that the monies given are paid post factum, done yearly after checks and approval that the past year’s indicators were met.
He explained, ‘There are targets each year, between January and December …so each time we come the following year and we check.’
‘Restructuring indicators’
The envoy made clear that the grants given were not for policy design but merely the EU supporting the restructuring of the sugar sector here.
“In principle, all the money went for sugar sector reform…this programme was a functional support programme. So the funds went into the treasury of the government and then they would spend on a sector restructuring strategy that was agreed with the EU,” Stuck said as he pointed out that the EU has no role in the actual procuring of services. Specified programmes, he noted, are chosen by a government on its sole discretion that it believes it will assist in meeting specified indicator objectives. “How the money is spent to achieve the indicators in the programme, was the sole responsibility of the government,” he added.
Stuck explained that while most persons think that the EU has a hand in assisting in the procurement and execution of projects chosen, this was not so in the case of their provision of budget support.
Through this measure, a government would plan and execute a specific macro-economic programme, in keeping with desired EU indicators and the following year the monies used would be replenished into the public treasury by the donor; being the EU. How the indicators are reached is not the responsibility of the EU.
“If you are speaking of a normal project, (the building of a road for example) then we are responsible for the whole implementation, meaning that we will do the contract with a construction company for example. However, when we are doing budget support, which will increase the ownership of the country for the programme, the money goes into the treasury and the only influence we have to check is against the indicator,’ he said.
“Now how they are reached, that is out of our responsibility. This is a system that which basically follows up with millennial goals agreed to and in order to also give those countries (such as Guyana) , benefiting from budget support ,the possibility to increase their ownership and to integrate the funds into their sector policy reform, in all areas,” he added.
Videtič reiterated that the decision to end sugar quotas was decided in 2005. Sugar protocol countries were allocated a total of $1.20B Euros in restructuring to help adapt to the new market conditions – the so-called Accompanying Measures.
The end date of production quotas inside the EU for Guyana is 30th September 2017.
No payments were made between 2013 and 2015 since the EU believed that Guyana did not meet agreed indicators. The payments were delayed since parliament was prorogued in 2014 by then President Ramotar. “The last payment under the sugar programme was delayed as it was put on hold because we were waiting for the eligibility criteria to be met, so this payment was executed in October 2016,” the EU Ambassador said.
Some 24 million Euros ($5.2b) was handed over to the APNU+AFC government in October of 2016 and the EU then indicated that the government here had made “remarkable progress and commendable efforts in terms of budget transparency and accountability”.
Against the background that the sugar industry here is still in a dire state, with closures of some estates and plans for privatisation among others, the EU Head of Co-operation was asked if Guyana had met the EU’s inscribed indicators.
“In the end yes, because the last payment was made in 2016. When we have confirmation that the indicators were met we release, to say, the next year… they were not policy indicators but restructuring indicators. The indicator was not how much sugar was produced, that was not an indicator for us. How the reform is done is the responsibility of the government,” he said.
‘Show how’
But the former President believes that the APNU+AFC government received monies that his government worked hard for as it toiled “earnestly” in ensuring that the EU indicators were met. He is annoyed that the monies were paid to the successor government and says he does not believe that the proroguing of the parliament was the reason the payments were delayed.
“I know that the €25M the PPP earned he gave it to this government all under the flimsy excuse that I had prorogued parliament. I do not believe that was the reason the payment was not given to us. We earned that money,” an irked Ramotar said.
Government, through Minister of State, Joseph Harmon on Friday called on the PPP/C to, instead of lamenting the state of affairs of sugar to its support base, tell them why sugar is failing given that they received large sums in aid from the EU. Said Harmon, “It is clear that if this money was spent in the sugar industry we would not be in the situation we are in today. This is huge sums of money. The leader of the Opposition is always saying ‘Oh do an inquiry here or there and so on’ well if we do an inquiry into this you will find that the bulk of the money went elsewhere. So when the PPP and some of their friends go to sugar workers and cry out ‘We are sorry for you’ and so on, they should explain what it is that they did with all this money. Explain why it is that our sugar industry produces sugar at production prices higher than world market prices we are getting.”
“This is not something that could have happened overnight. This did not start in 2015, when we came into office. These were noted trends going along all the way. And so when we came into office, the decisions which the PPP government were afraid to take, we took those decisions, in the interest of the industry and the people of this country, primarily the people who work in the sugar industry. What we are doing is trying to save it (sugar). The PPP, they were on a path of killing it… We are working in the interest of the people of this country, in the interest of the people of sugar industry, and in the ensuring that there is still a sugar industry going forward in Guyana, albeit in a different stage,” he added.
