For some time now, the Guyana Sugar Corporation (GuySuCo) has been a popular whipping boy for the APNU/AFC coalition. The assault on GuySuCo by APNU/AFC is not a new phenomenon but may be traced back to as early as 2013 when Carl Greenidge and Keith Scott referred to this critical corporation as a “black hole” (see “Budget ignores jobless, poor, Greenidge says,” Stabroek News, April 3, 2013).
Even after promising Guyanese that they will rescue the sugar industry, the APNU/AFC continued to batter GuySuCo but with more dangerous intentions since assuming office in 2015. Indeed, the APNU/AFC ramped up its attack on the corporation by closing four estates and swiftly moving to dismantle and liquidate the assets of the corporation (see “Govt to set up Committee to oversee sale of GuySuCo’s lands,” Guyana Times, June 1, 2019). As if this was not enough, the APNU/AFC Government secured a $30 billion syndicated bond under the pretext of revamping the remaining estates (see “GuySuCo secures $30B in bond financing,” Stabroek News, March 29, 2018).
However, to date, we do not know how and for what purpose these funds were deployed, except that we have paid $132 million in interest by May 24, 2019 (see “$132M interest paid to banks on $30B GuySuCo bond”, May 29, 2019). By saddling GuySuCo with such a heavy debt burden while simultaneously impairing its ability to generate revenue, one can only conclude that the APNU/AFC Government intends to kill the industry.
The slow death of the corporation is visible from the continuous decline in the production and export of bulk sugar. After showing some recovery from 2010 to 2015, the production of sugar trended downwards from 231,145 tonnes in 2015 to reach 104,642 tonnes by 2018, a 54.7 per cent decline. Export revenue from sugar slipped by 65.4 per cent from US$78.4 million in 2015 to US$27.1 million during 2018. The export revenue from ‘King Sugar,’ which once competed with gold, bauxite, and rice for prominence, for the first time, recorded export revenue below timber export, which is struggling. The devastation to the industry needs no expert analysis. It is visible to the naked eyes of every Guyanese, even those with minimal knowledge of the sugar industry.
The question, therefore, is why the APNU/AFC would be so devoted to killing the corporation? It definitely cannot be due to the relevance of the industry. Everyone, including APNU/AFC, knows that GuySuCo is one of the largest employers in the agriculture sector, which contributes significantly to the Gross Domestic Product, furnishes the foreign exchange market with foreign currency required to pay for imports, pays significant taxes, contributes significantly to the National Insurance Scheme (NIS), and maintains the drainage and irrigation system that supports the farming communities located on the sugar belt.
Indeed, in his presentation during the 2013 budget debate, Carl Greenidge highlighted the importance of GuySuCo. As Opposition Leader, Mr David Granger also boldly told the nation that GuySuCo was too big to fail and promised to not put a halt to the sugar industry if voted into office (see “We are not going to dissolve the sugar industry,” iNews, March 18, 2015). To demonstrate that they were serious about saving GuySuCo, the APNU/AFC even went as far as outlining a slew of measures in the manifesto they presented to the nation during the 2015 elections.
The measures included: bringing an International mission to help revise the sugar action plan, establishing a programme to make the entity more efficient and cost-effective, changing agronomical practices to boost yield, incentivising the supply of high-quality cane from farmers, providing funding for research and extension services to increase the core competencies within the sugar industry, accelerating the development of a sugar refinery, and enhancing the quality of life of sugar workers. Based on my research, the APNU/AFC is yet to implement any of these measures.
Could the unwavering commitment by the APNU/AFC to close the industry be attributed to its desire to protect the treasury from being continuously drained since the financial viability of GuySuCo cannot be restored at all? If we were to use the report from the Commission of Inquiry (CoI), the answer to this question would be a resounding “no”.
The report is by far the most comprehensive data-driven study that proposed a menu of measures to save the industry. Indeed, the study showed that the co-generation plant could supply 17MW of power and yield profit as much as $1.6 billion annually. The CoI also reported that the corporation could produce more than $1 billion annually from the packaging plant, while land sales can make approximately $55.6 billion between 2016 and 2020. Together these initiatives were projected to yield more than $13 billion annually between 2019 and 2020.
Further, the CoI recommended the monetisation of drainage and irrigation activities of GuySuCo but did not provide any projection on the earnings from this source. However, if we were to use the last supplementary approval granted by the National Assembly in October 2018 to GuySuCo and NDIA for drainage and irrigation works, the corporation could earn a few hundred million dollars annually.
Diversifying the revenue stream for GuySuCo can quickly reverse the financial fortunes of the corporation, as shown in the CoI. The claim that the corporation is beyond redemption and will be a drain on the treasury is, therefore, without merit.
So why would the APNU-AFC want to destroy the industry? The answer to this question is contained in public statements made by two prominent members of APNU/AFC. During the 2013 budget debate, apart from referring to GuySuCo as a black hole, Carl Greenidge said that GuySuCo is the ‘PPP/C Government problem.’
In his presentation during December 2018, Khemraj Ramjattan, without a hint of shyness, told the nation that the PPP/C sustained the industry because it wanted to employ its people since the party received strong support from the sugar estates (see https://dpi.gov.gy/minister-ramjattan-calls-out-oppositions-scaremongering/).
By their utterances, prominent members of APNU/AFC have disclosed the real reason for its relentless assault on the industry by their party. The party is interested in destroying the support base of the PPP/C, an act that could be rightfully described as ‘economic genocide.’ The APNU/AFC is ‘unbothered’ that the closure of GuySuCo would have harmful effects on the economy and well-being of the citizens, especially the rural poor.
For the APNU/AFC, the political benefits compensate for the adverse social, economic, and environmental consequences associated with the closure of the estates. The party and its supporters should, therefore, stop the pretence that the decision is based on sound economic reasons.
The bitter truth is that the closure of the estates provides the avenue for the APNU/AFC to weaken the PPP/C by destroying its support base. The reason to close the estate has nothing to do with the viability of the corporation or its importance to the domestic economy.
It cannot be that APNU/AFC is doing this because they are fiscally responsible. The out of court settlements, tax waivers granted to some of the oil companies and one of its detractor (Robert Badal, who has now joined the group which relentlessly attacks GuySuCo), the wasteful spending on travel and dietary, losses from misprocurement, 50 per cent increase salary hardly support the claim that the APNU/AFC is a fiscally responsible and prudent Government.
The harsh reality is that the APNU/AFC believes that if they support the sugar industry, they will be indirectly supporting sympathisers of the PPP/C and by extension, the PPP/C. As such, they are desirous of killing the industry to harm the PPP and its supporters.