In his New Year’s Day message of 1974, Prime Minister Forbes Burnham announced the imposition of a special tax levy (called the sugar levy) to extract a portion of the huge profits that accrued to Bookers McConnell (Bookers) and the others in the plantocracy as a result of the high price for raw sugar on the world market. In 1975, this levy yielded over US$85 million for the Burnham regime. But Burnham wanted more than cash; he wanted control.
Two years after, in May 1976, on the nation’s tenth anniversary of independence, Burnham made his move and Bookers was “nationalised and placed under the management of several State corporations run by Guyanese personnel” as highlighted by Professor Ralph R Premdas. The evidence reveals that much of the sugar levy from 1974 and 1975 was used to pay the sale price for the Bookers assets (US$40 million). However, once that issue was settled, the fund served as budget support to the entire nation. I have been working on an in-depth analysis on this levy and I have found empirical evidence to prove that between 1974 and 2013 when former President Bharrat Jagdeo finally repealed the sugar level by way of Act No 11 of 2003, the sugar industry transferred some US$1.5 billion to the national coffers. (See table below):
What was quite revealing was that the sugar industry transferred, annually, an average of US$57 million to the national budget for some 29 years. This sugar levy served to benefit people in all 10 regions of Guyana, whether they lived in Bartica, Linden, Mahdia, Georgetown, or beyond. So the evidence is there to prove that the sugar belt has paid its dues to this nation. All that was asked of this nation since the sugar industry became cash depletive was for some temporary cash support.
In 2015, before the elections, I prepared a 5-year turnaround plan that would have reduced the cash loss to US$9 million by 2020 (if it was implemented in 2015). On top of that turnaround plan would have been a 5-year stabilisation plan that would have achieved cash neutrality by 2025.
In total, the turnaround and stabilisation plans over these 10 years would have taken from the Treasury about US$238 million. Here was a company that provided this nation with over US$1655 million in cash support and in return was just asking for 14% of that sum to be ploughed back into the industry as a means to protect and preserve 15,000 jobs. This is what Team Granger could not do. But there is more since directly the industry supports some 60,000 people including some 28,000 children and indirectly over 110,000 people mainly across rural Berbice and Demerara.
As we are all seeing today, Team Granger has been nothing but short-sighted and thankless to the sugar industry, which carried this nation for centuries. Now that the sugar belt has an ailment, these ingrates in the Granger cabal are prepared to confine it to the “destitute ward” without even considering that there is enough science to repair it. The fact remains when other industries were failing in the 1980s, it was sugar that bailed them out.
Although the Parvattan Commission provided some level of information that could have served as a foundation for a proper due diligence exercise, Team Granger dumped their key recommendations. As a nation, we are no better off at understanding the business model, focusing on cutting non-value added cost, increasing value-added sales like packaged sugar products and rebuilding confidence across the workforce. Rather, this nation is being financially burdened by a US$150 million loan that is costing us money but has not been effectively put to work. This is shameful!
It is time for a serious conversation on how to rebuild an industry that should be focused on value-added sugar-related products as this country embarks on a path that is on the brink of great wealth.