Minister of Finance, Winston Jordan during his press conference on Friday, April 13, announced that the economy expanded by only 2.1 per cent, the lowest growth rate in recent times. Incidentally it was Black Friday, was it a coincidence?
The Minister, among other things, charged that sugar production of 137,307 tonnes in 2017 was responsible for the poor economic showing. The GAWU will not rehash the reasons for the poor production which we shared publicly on more than one occasion. Though the Minister seeks to use sugar as one of his punching bags in seeking to explain what is clearly a worrying situation, at the same time, the admission by Minister Jordan serves to demonstrate the importance of the sugar industry to the wider economy.
As GAWU has been saying consistently, the sugar industry cannot be seen solely and only from the financial/profitability argument the government, like a horse with blinkers, is focused on. Important as that is, the GAWU strongly believes, and must reiterate, that sugar has to be seen from its wider economic impact in terms of direct and indirect employment, taxes whether these be income or consumption and foreign exchange receipts, among other things.
The four closed estates in aggregate paid their workers $11.9 billion in 2014, using data available from the Sugar CoI report. To illustrate the significance of what the economy has really lost we contrasted what obtains in the private sector. Using most recently available data concerning employment costs at Banks DIH Limited, Demerara Distillers Limited (DDL), Guyana Bank for Trade and Industry (GBTI), and Republic Bank (Guyana) Limited – four publicly listed companies in Guyana and among the country’s largest enterprises – we learnt they spent in aggregate $9.6 billion.
Also, it is estimated that the now jobless workers of Skeldon, Rose Hall, East Demerara and Wales, conservatively, utilized about 85 per cent of their earnings on the purchase of goods and services. In other words, directly shopkeepers, market vendors, fisherfolk, transportation providers, etc have lost $10.15 billion. Indirectly, using the income multiplier formula, a further $70 billion has been removed from the economy. This is a massive and substantial hit and one which many, especially in rural Guyana, may not be able to recover from.
With now four closed estates, and some resuming operations in a minimalistic way at this time, it would be interesting to know what the 2018 figures would reveal. Clearly, from all appearances, the wiser economic decision was to keep the industry going while working to make it profitable and viable as the SPU is now seeking to do at Albion, Blairmont and Uitvlugt. What is clear, as Minister Jordan is reported in the April 14, 2018 Kaieteur News to have said, sugar is too big to fail.