My focus for this week is on a topic that has presently been attracting much public debate and attention in our country, and dominating the media. Recent developments have caused widespread rejection of the closure of the Wales Sugar Estate. To make matters worse, recent announcements in the media by the administration of the day – the decision to close more estates — have compounded the issue by stimulating an increased level of protestation by sugar workers and other supporting members of the citizenry.
These occurrences, once materialised, will lead to thousands of ordinary Guyanese becoming unemployed and severe adverse consequences visiting the economy of sugar-producing communities. The socio-economic fabric of those communities will deteriorate; the poor will grow poorer — poverty will be on the rise; crime will increase; hopelessness will be pervasive; and if I am to borrow another consequence put forward by a prominent political commentator in his blog, suicidal tendencies, or the rate of suicide, will increase. This scenario will almost certainly weaken, and thus devastate, the social and economic strata of the country’s economy.
It is recorded in Guyana’s history that the sugar industry began in the 1600s, when the Dutch West India Company sent settlers to develop plantations along the Pomeroon River in Essequibo. The first set of labourers to work on the plantations were imported slaves from West Africa. The first consignment of sugar was dispatched to Holland in 1661; and as the sugar plantations expanded, thousands of slaves were imported each year.
In 1833, the British rulers passed the Act for the Abolition of Slavery throughout the British colonies. This marked the end of an era characterised as slavery in Guyana’s history and the birth of a new era, known as the Indentureship period. Indentured servants were brought from India and elsewhere to work on the sugar plantations between 1838 and 1917.
In 1976, as part of the nationalisation process undertaken by the Government of Guyana, the industry was nationalised and merged with the sugar estates operated by Booker Sugar Estates Limited, Tate and Lyle and Jessels Holdings, to form the Guyana Sugar Corporation (GuySuCo).
Thus my attempt to highlight the history and evolution of the sugar industry corroborates the abovementioned argument that the sugar industry has for centuries been the hallmark of the country’s socio-economic bedrock. Now let’s zoom into the social and economic impact.
First and foremost, as a financial analyst, I have to say that GuySuCo is, no doubt, having serious financial troubles. This is a fact that cannot, and will not, be ignored by this column. But equally, in these decisions, much must be taken into consideration. For example: what would be the cost to the economy should we downsize the sugar industry? If it were a private limited company, downsizing to cut cost would unarguably be a textbook solution which most private firms pursue when an economy is declining and/or the competitive environment is becoming fiercer.
On the other hand, when the government of a country owns and manages one of that country’s largest industries — reportedly one of the largest employers, with about 16,000 workers — common sense dictates that it is inappropriate to base an inhumane, illogical, absurd, ruthless, unethical and irrational decision on only one facet of decision-making: profitability.
Eighty percent of GuySuCo’s employees are labourers. This means that the closure of the estates will affect the lower working class people; or, to be frank, the poorer people. According to the announced plans, 40 to 60 percent of the workers will be retained; this is equivalent to between 6,400 and 9,600 employees out of 16,000 employees. Therefore, between approximately 6,400 and 9,600 persons will be unemployed.
I beg to differ rather strongly with a statement issued in the press by the Head of State, which reads: “GUYSUCO BLEEDING COUNTRY”. In order to make sense — both economically and socially — of this potentially destructive statement, let us examine it comprehensively and test its merit. While I note with interest that the Government had, in eighteen months, injected $23 billion into the industry, many other crucial factors were omitted from this analysis. At least from the perspective of what is being peddled in the public domain, it seems to me that the analysis was enveloped in a great degree of mediocrity; and there is a reflection of poor and limited intellectual capabilities in the respective fields.
Next week I shall continue this discussion. I will present, in a comprehensive manner, the critical elements that I have alluded to in today’s article as having been ignored with regard to the economic and social impacts on the economy, and the way forward. In other words, next week’s article will seek to address the questions: What will it cost the economy to close some of the estates? Is it sensible to do so?
