Dear Editor,
I do believe that the sugar industry’s past and future management will be a topical, and rightly so, issue in the upcoming election. It is for this reason that the PPP continues to argue, without articulating how, that they will re-open the failed closed sugar estates. The fact is, words are cheap and what the electorate needs to hear is how the PPP can go about this without damaging the economy.
In yesterday’s Stabroek News, I read a letter by Sasenarine Singh headlined, ‘Reopening Rose Hall and Enmore estates will restore value to the economy’. First and foremost, the gentleman said he is a former banker and turnaround specialist who worked in the UK. It would be interesting to know what bank he was employed by. Secondly, it would be useful for him to advise us if he knows of any bank in the UK which would finance an industry, similar to the sugar industry, which has been failing for decades. If the answer is in the affirmative, then I would be grateful if he can state the name of such bank(s). Thirdly, from his experience of working in the banking industry, how many industries have been rescued by the government?
From my recollection, the only time that the government intervened in a failing industry was in 2007; Gordon Brown was PM when he intervened in the failing banks during the financial crisis. That was the only occasion I can recall. The reason postulated is that those banks were too big to fail. I should also add that these banks were not given a blank cheque. Strict conditions were attached to the bailout since the prime minister rightfully argued that it is taxpayers’ money.
Since 2007, many large companies have failed and the government refused to intervene. The most recent was Thomas Cook, which entered into liquidation in September 2019 where over 30,000 employees lost their jobs.
Fourthly, Mr Singh states that he is a turnaround specialist. I have not heard about this type of specialist before but I guess it is self-explanatory. Anyway, I would be grateful for the gentleman to explain what a turnaround specialist entails. If I’m correct, I would believe that a turnaround specialist is someone who can advise on steps that could be taken to change the directions and fortunes of a business. The closest analogy I can think of is a resuscitation officer, who is specialised in bringing a patient back to life from the ‘dead.’ Mind you, if that patient was dead for days and rigor mortis stepped in, not even the world’s best resuscitation officer can bring that patient back to life. As a result, I am curious to get Mr Singh’s ‘expert’ opinion if the PPP and himself have missed the boat in turning the sugar industry around. Why was Mr Singh silent all these years when the sugar industry was failing but now has a voice at an imminent election when his party is championing, without reason, the reopening of the sugar industry?
Mr Robert Badal, the presidential candidate of Change Guyana, a chartered accountant and successful businessman, said that the PPP’s argument that the sugar industry can be reopened is foolish. He argued that, assuming the PPP wins the election, then on day one they will need to clear the abandoned cane fields. He then argued that the soil will need to be prepared. He subsequently stated that the sugarcane will need to be planted. Finally, he said that the machinery, which were down for years, will have to be replaced or repaired. This whole process can take at least a year during which time the re-opened estates would not be making money but will have to pay billions in overhead cost and employees’ wages. To me, an intelligent layman, this sounds rational.
My question to the PPP and Mr Singh is: Is Mr Badal wrong? If he is wrong, can both Mr Singh and the PPP outline their roadmap to reopening the sugar industry which will not affect the economy? Mind you, Mr Singh argued that the sugar industry can be re-opened on day one if the PPP wins the election. If Mr Badal is right, and I strongly believe he is, then can the PPP and Mr Singh please explain the economic rationale underpinning the reopening of estates which were failing for decades at a cost of billions in subsidies, to then spend billions of dollars to reopen them only for them to continue to fail and lose billions? In effect, investing billions to lose billions. To me that makes zero economic sense and appears solely political.
I must say that I’m no financial expert or banker but having had two mortgages and multiple loans in the UK, I can confidently state that banks are generally risk averse. If they are so detailed in their assessments of someone who is applying for a loan or mortgage which is infinitesimal compared to large companies, then I am reasonably confident that no bank would finance the sugar industry. Therefore, I would expect any government to extend such care and diligence with taxpayers’ monies. If banks are not prepared to invest our monies in an economic cul-de-sac, then why should the government? That’s my position. Until the PPP can articulate how they will successfully re-open those failed sugar estates and make them viable, then any utterance on their part should be seen as hot air that the world can do without when considering climate change.
Yours faithfully,
Dr Mark Devonish