Dear Editor,
There has been much clamour about sugar being what brought us here. and from the PPP/C that sugar is too big to fail. What really brought our foreparents here was profit, the real driving force of any business.
We live in a changing world, and what was good five decades ago is no longer good today. Today cane sugar is considered a high calorie sweetener associated with diabetes and obesity ‒ two of the most prevalent diseases on the planet. Modern science has rendered cane sugar obsolete. Hence Demerara Gold has lost its lustre.
While we must be thankful to the sugar cane for giving birth to our nation, we must not condone its inability to make a profit. GuySuCo has failed to make a profit for nearly two decades. It should be considered an act of gross negligence on the part of successive PPP/C governments that they tolerated such failure for so long at the expense of the entire nation. Worse is the fact that not once in the last two decades did they attempt to give GuySuCo any sort of ultimatum such as ‘produce or perish’ as the ‘Kabaka’ would have done. Instead, the visionary Jagdeo built what he called a flagship (the Skeldon factory) at cost of a whopping US$200 million for a dying industry. Sadly the death of that flagship was announced recently.
Two decades of making a loss in any business is unheard of internationally. In other parts of the world private companies continue to plant sugar cane and are making a profit, while our GuySuCo continues to sink deeper into the red zone. Here the economist will tell you to look at the ownership and management of the industry ‒ the state and the government respectively. GuySuCo remains state owned in the communist mode, a system which has been tested and proven inefficient since 1989 when the Cold War ended. There is a popular saying by the pundits of business that ‘nothing beats the eyes of the master’ ‒ meaning that no one can look over your business better than yourself. Ask the politicians who owns GuySuCo and they will tell you, the people of Guyana. What nonsense! The PPP/C has been running our GuySuCo at a loss for years and not once did they try to get our opinion on what to do. GuySuCo’s accumulated debt will be the burden of all taxpayers.
I commend President Granger for telling the people of this country that GuySuCo is putting a strain on the provision of services to the people. I never heard that from the PPP/C when they were in government.
We may have been better off if the PPP/C leaders had had the wisdom to recognize failure and close the industry a long time ago, putting it up for divestment. The annual subvention given to GuySuCo to keep it afloat and the US$200 million spent to build the Skeldon factory could have been used to continue paying sugar workers half their salary for a five year period so as to offset the consequences of unemployment.
I believe that in five years the company could have been fully divested into private hands ‒ local or foreign ‒ and would have made a profit for its new owners. During that time most of the workers would have been integrated back into the system.
The ball is in the coalition’s court to consider the divestment option ‒ desperate situations require desperate solutions. There is also the case for diversification. One agriculturalist has said that hemp is ten times more profitable than rice. GuySuCo could diversify to hemp, piloting its production in Guyana.
Given the bureaucratic controls of government and the attitudes of workers in the state-owned enterprises, I would recommend the divestment of GuySuCo instead of diversification. I do not believe that a state-owned company producing any commodity even if it is deemed to be as profitable as hemp, could turn a profit unless there is a preferential market for that company.
Governments should concentrate on the provision of services and not the production of commodities.
Yours faithfully,
Rudolph Singh
