Dear Editor,
Reading the Bank of Guyana 2009 half year report was a clear reminder that the core developmental issues in Guyana have been dealt with very superficially since 2006. Guysuco, the completion of MMA, the road to Lethem, the hydro project, the deep water harbour all seem to be going nowhere. It is time President Jagdeo provided evidence on when these projects will turn the corner.
Even in a year when fuel prices (a large expenditure in the economy) went down, we still failed to grow the economy because we did not plan appropriately for the main revenue generators of the economy like sugar. However, mark my words, the weather will be solely blamed for the 2009 economic decline even though the truth is much more than this. Even if the official line is the weather, what do we do, throw our hands in the air? What are we doing about completing the MMA to enhance our flood control systems? I was made to understand that the Japanese are considering this project. Was there any progress here?
Our long-term electricity needs continue to be the carrot tied to the donkey; they continue to elude us. I am least concerned about building the road to the site of the hydro power station (Burnham did the same with the UMDP remember, and where are we?). What I want to know is when the contract for the construction of the hydro-power project will be signed? This is what I want the President to focus on because this has a direct bearing on our future as to whether we make it as a nation or we continue to sail along like a cork in the ocean – directionless.
President Jagdeo fails to capture the essence of any working class political party (broad commitment to protecting the most vulnerable of the working class, safeguarding the gains of the workers, and a fair day’s wage with a view to reducing the gap between the rich and the workers). In a country with so much political turmoil, the President fails to adequately consult and secure constructive feedback from the political opposition; he has lost touch with two critical voices that were on the side of the democratic forces in the run-up to 1992 – the Anglican Church and the Catholic Church – and he has disconnected ages ago from the workers of Guyana, Cheddi Jagan’s people. It is still a change to change course for the betterment of all of Guyana, not only the friends and the family.
President Jagdeo has committed to the idea of a green economy, which I personally feel is a good idea, but we have neither the luxury nor the power to influence this process. So why waste presidential time, jet fuel and hotel space to campaign for something that is already being determined by greater powers? Our vested interest should be of paramount importance and it means focusing on repairing Guysuco; completing phases 2 and 3 of the MMA scheme; improving the management of our mining sector (to contribute more to the economy while at the same time minimising the destruction of the environment); focusing on diversifying away from fossil fuels with the hydro-power facility and ethanol production; and working more closely with Brazil so that they can help us leverage our potential, especially with the road to Brazil, our deep water port and expanding our plantation-type agriculture.
When these developmental issues are sorted, we can look forward to sustainably increasing FDI, renewed economic prosperity and most importantly perpetual job creating opportunities, since the LCDS will certainly not provide these opportunities.
Looking at Guyana’s latest economic statistics is most frustrating, but I will only deal with sugar because of space constraints. Sugar remains the backbone of our economy and if sugar is weak, Guyana is weak. Sugar production at the half year of 2009 was c83,000 tonnes, 19% worse than 2008, and there is an expectation that optimistically sugar production for 2009 will land at c216,000 tonnes. At an average price (even after the EU price reduction) of 25 cents a pound we are expected to secure US$120 million from sugar, 10% less than the US$133 million we earned in 2008. This is not good news for the economy and the people of Guyana. What a way to break the New Year!
Because of production constraints, Guyana continues to barely service that valuable EU market, to under-service the US and Caricom markets and there is no scope to develop new markets. This industry will go nowhere unless adequate cane is in the ground and it can be reaped and milled at the appropriate times. From my estimation, late 2010 seems the earliest that a fair amount of cane will be there to match the ambitions of the Turnaround Plan (TP). Reality check No. 1:- 2010 will remain a tough year for Guysuco.
Let us accept that the best brains in sugar such as Dr Gopaul’s were integral in designing the TP and thus we must accept this plan has merit in its contribution to the industry. However, does the plan cater for the following which I encourage any journalist to ask Mr Hanoman the next time he is interviewed:
1. Are there adequate planning systems in place to optimise sugar cane cultivation using selective mechanisation? Mechanisation must be intensified in this industry as more and more of the offspring of the cane-cutter either migrate to other types of work or migrate out of Guyana. How much of the cane is harvested mechanically today and what is the plan for the next 12 months and by what time 50% of the cane will be reaped mechanically?
2. Is the mix of cropping and grinding optimally matched? Is there enough cane available in the estates (save and except Skeldon) at the right time to feed the sugar factories? After the Chinese have sorted the teething issues at Skeldon, there is still an overwhelming concern that there is inadequate cane in the ground to feed the new factory. Does the TP cater for a timeline by which this anomaly is sorted and what immediate actions are in train to realise this objective? The government can take actions such as providing partial bank guarantees in order for the private cane farmers to secure the required resources to accelerate the development and planting of the land. Is this action actively being taken? How much of the newly developed land is now planted?
3. Is the production chain well synchronised? Operations on an estate involve soil tillage, bed preparation, planting, herbicides application, fertiliser application, harvesting, loading, transporting and milling. Does the planning process identify early kinks in the production chain and thus allow for measures to be taken to resolve the issue in a timely manner to ensure that the milling process is not adversely affected?
4. Is there adequate utilisation of the owner-managed machinery? Should this process drive increased levels of equipment leasing (tractors, etc) rather than owning? Essentially Guysuco must own some of its equipment but there is scope for greater leasing of equipment whereby cash resources will only be used when equipment is engaged in productive income-earning activities.
5. Is there active engagement of the workers to get them to buy into the plans for the industry? GAWU most certainly is not fully on board and quite justifiably so. GAWU firmly believes that the management has under-performed resulting in this state of affairs. However at this critical juncture in the industry’s future GAWU has to give a little, but when one reads in the national press that an engineer is costing the industry over $2 million a month, there are no incentives for GAWU to give anything. The industrial relations aspect must be rebuilt since it appears that the employees no longer trust the employer. The sugar union should be brought to the table, along with their skilled accountant to assess the cash flow projections for 2010 with full evidence of each figure. The union must be advised of the strategies to increase revenue and reduce cost and what action the management will commit to, if there are significant adverse variances.
6. Is there adequate accountability in the industry? The term of employment for heads of estates and other top management officers must be changed to contractual employees with clear performance benchmarks inserted into their contracts. For example, the Skeldon Estate will meet a target of X by 2010 and if not, these are the consequences, if there is no clear justification. No one should be sacred in the industry any more; it should be run like a business if it is to survive.
I said almost a year ago that sugar is Guyana’s bloodstream and the haemorrhaging of the industry has to be stopped as it is intrinsically linked to the nation’s future. The evidence reveals that Guysuco continues to suffer from poor decision-making, improperly targeted resources, a mismatch of skills, under-performance of the operating systems and adverse weather. Of all these issues, Guysuco’s biggest failure is its inability to strike a balance between rewarding hard labour/innovation on the estates and executives protecting their turf. Weather disruptions can rapidly worsen an already poor financial situation as a result of poor leadership (I am not blaming Mr Hanoman here; this is more directed at Booker-Tate management and the previous local management many of whom are still in the system). Unfortunately, the weather was part of the problem, but the weather was not the main problem.
Management has to come clean with the workers and slash waste and extravagance at all levels. The culture of investing in world-class agronomic practices at all times must be embraced as well as listening to the workers. The industry itself is a reservoir of innovative ideas but few of these bottom-up ideas see the light of day. Workers are best placed to know what would work best in their local situation but they get neither the resources nor support for their ideas to better the industry.
I think a start was made with the TP but the realities on the ground to date demonstrate that all is still not well at Guysuco. The onus is on the Board of Directors to find out why the productivity, profitability and prosperity of the industry are not improving.
The management Guru Peter Druker said “Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information.” He further stated that “Executives owe it to the organization and to their fellow workers not to tolerate nonperforming individuals in important jobs.” I trust that members of the Board of Directors at Guysuco are students of Peter Druker.
Yours faithfully,
Sasenarine Singh
