Dear Editor,
Almost all the commentators on our economy are noting with concern that Guyana is experiencing an economic decline. The reasons for the decline are many and would be the subject for another letter in the near future.
In light of this obvious downturn in the economy, it is my considered view that the APNU/AFC regime would do well to reconsider the closure or even the scaling down of the sugar industry. Sugar can be the national saviour to our economy if the right investments are made now.
Everyone knows that for an economy to grow, there is need for investments. No industry or for that matter no business that finds itself in difficulties can turn things around without investments. Sugar is no different and despite the problems it faces it can surmount these with solid, sensible investments.
One of the factors that have affected the sugar industry is that it has fundamentally remained a producer of raw sugar from its inception. From the time of its creation, it was designed to serve the refineries and markets in the UK and Europe. It is in those countries that value is added when the bulk, raw sugar is transformed into refined sugar, and become a major input to the confectionery and soft drink industries, among others.
It, therefore, makes sense for us here in Guyana to work towards the transformation of the industry into a complex that adds value to the sugar we produce, which will generate greater revenues and job creation.
That was the direction in which the PPP/C Government was going. The industry began packaging sugar and also began co-generation at Skeldon, and the plan was to further expand the latter on other estates. A pilot project on fuel alcohol was done at Albion.
It is true that the industry ran into some major difficulties. The investment at Skeldon of the new factory was and is plagued by many technical problems, though not insurmountable. Simultaneously, the price of raw sugar to Europe was cut by 36 per cent. Those two factors were the main reasons for the crisis in the industry.
That does not mean that we should move to close the industry. Indeed with investment now, we can make sugar very profitable in the short to medium term. We saw with some investments how well Skeldon performed in 2015. With other investments the industry can strive.
We can do this by going into a joint venture and establishing a refinery here so we can sell to the Caribbean refined sugar. The Caricom market is some 200,000 tonnes. Certainly, Guyana could get a substantial part of this market.
We can go into another joint venture to establish a distillery to use up more of our molasses. Here we can sell alcohol to the rum industry in the Caribbean as well. This would be adding more value as well. Already, GuySuCo had started to bottle molasses and it was proving to be successful.
In this regard, we have rum companies in Guyana and the Caribbean. So, clearly we can pursue this to get viable partners for GuySuCo.
The programme of co-generation could be expanded. Albion and Enmore can become generators of substantial amounts of electricity. I am sure that GPL would see this as attractive and the two companies can establish stronger joint ventures.
The same can be done with Guyoil and GuySuCo in relation to fuel alcohol. We wrote about this before.
In areas like Uitvlugt and Wales, GuySuCo can encourage more farmers to get involved in the production of sugar cane. Already, we have seen some farmers going to Uitvlugt and doing well. This should be expanded on those two estates and wherever else necessary, since both estates have the capacity to process more canes. This model is being used in many parts of the sugar producing world with great success.
It makes good sense to invest in sugar for another very important reason. The infrastructure is already there. The lands, the canals, the roads, bridges etc, are there. It would be a shame to abandon these when we can find no viable alternative to sugar for these lands.
The Government should take a decision to invest in the industry now and make it public. An immediate decision would end the uncertainty among workers and managers, for it would infuse them with confidence and inspire them to work to make the industry a success.
Such a programme would create jobs and generate a great amount of economic activities which will benefit our country enormously. Sugar is not a lost cause. Its best days could still be ahead if we take the right steps now.
This will eventually put the economy on far better footing and achieve many of the goals that this regime has set, including a positive contribution to the environment.
Sincerely,
Donald Ramotar
Former President
