Dear Editor,
The continuing spat between the Guyana Sugar Corporation (GuySuCo) and the Special Purpose Unit (SPU) would have been laughable were it not for the disastrous consequences it could have for the future of the sugar industry and for that matter the economy as a whole. Interestingly, both the Guyana Sugar Corporation and the SPU are creatures of the State and the fact that both seem to be at odds with each other is indicative of a serious governance deficiency on the part of central government.
To begin with, it is my firm conviction that the privatization of sugar and the closure of the four sugar estates, namely Skeldon, Rose Hall, Enmore and Wales was at best shortsighted and certainly not in the best national interest. It has not in any significant way resulted in any tangible benefit to the industry. Billions of dollars were wasted due to asset depreciation and loss of revenues not to mention the social costs associated with the loss of employment for the thousands of sugar workers.
The Government’s decision to establish a SPU to oversee the privatization process has, from all indications, been met with much resentment by GuySuCo which seems unprepared to make available to the SPU critical information to facilitate the privatization process.
It is clear that the SPU is experiencing some serious challenges in finding suitable investors for the sugar estates. Billions of dollars are being spent to put the estates in a saleable condition but with limited success. The billions of dollars borrowed attract high interest payments which adds to the burden taxpayers have to carry in the privatization process. The longer it takes to find buyers, the greater the accumulated interest payments and asset depreciation costs.
One major stumbling block is the unfavourable investment environment due in large measure to the existing unpredictable political environment following the no-confidence motion currently before the Caribbean Court of Justice. Potential investors seem reluctant to invest out of fear that any change in administration could result in fundamental policy shifts which could put their investments at risk.
I continue to hold the view that the Government should seriously revisit the decision to close down the sugar estates. There is nothing to suggest that the price of sugar on the world market would decline to unsustainable levels in the near future. The issue is fundamentally one of raising the productivity of the industry to make it much more competitive on the world market.
Yours faithfully,
Hydar Ally
