In bringing this topic to a close (at least for now), I present today a summary of the full recommendations arising from the CoI on GuySuCo. Though this document is accessible in the public domain through GuySuCo’s website, it is imperative for an analyst to extract this information and present it, especially since some commentators made vague and, in some cases, meagre references to it, while we have seen that the Government intends to pursue policies that are in complete contradiction to the recommendations therein, thus ignoring the findings.
This, I must mention, is very sad and is therefore described by this column as an outright wastage of tax payers’ money; an assertion supported by the fact that the CoI cost the nation over M in just three months. Why was none of the CoI’s recommendations taken seriously? Was this all a political fallacy? In addition, with permission sought from my fellow columnist/financial analyst colleague Mr Sase Singh, I will also summarise the findings and recommendations put forward by him in a paper which he authored and covered some substantial work on, “…sugar in Guyana after 50 years”. Following these, I will then draw my own conclusions and inferences on the way forward.
The first point of interest recognised by the CoI is that it did not recommend the closure of any estate. So far, one estate has already been closed. It was recommended that GuySuCo be privatised, but within a specified time line, the report suggesting 2018 – 2020.
A number of subsidiaries or diversification options were identified; namely: co-generation of electricity; supply of drainage and irrigation services to communities; supply of business services (IT, tourism, recreation etc); prime real estate and property holdings; agricultural equipment pools, including aircraft for rental to farmers; sugar refinery (plantation whites or refined sugar); provision of molasses, alcohol, ethanol; packaging of special sugars; other by-products etc. These recommendations are of course intended to diversify and increase the revenue base of GuySuCo, and, within the report, it was outlined in detail how each component of the recommendations should be executed or implemented, and within the respective timelines.
Turning to Sase Singh’s paper, he proposed a very practical and relevant turnaround strategy. The paper concludes by emphasising the importance of keeping it simple – focus on what can be done. In doing so, Singh argued that the data should be dug into using a rigorous framework, and everyone should be communicated with effectively; frontline workers need to be involved in some of the decision-making processes on how resources should be deployed (this is an excellent point). It is simply nonsensical to develop a turnaround strategy for an institution having a multiplicity of challenges and complexities without engaging in consultation with all levels of workers, especially the front-liners, or in the case of GuySuCo, the field workers. These workers, to my knowledge, possess a reservoir of useful information. The paper went on to state: clearly identify priorities every crop, and effectively communicate these priorities to all levels of workers; continually evaluate performance, and make adjustments constantly and accordingly; reward and develop execution capabilities; field and factory hands can also execute projects and make GuySuCo more efficient.
I recall that both Singh and Tarron Khemraj did extensive work for the AFC on diversifying the operations of GuySuCo within the framework of these very recommendations made in the CoI; For example, ethanol production etc. My question is this: The political party for whom this substantive was done is a major partner in the coalition government, why was this not treated as a matter of high priority on the Government’s agenda when they won the elections, knowing that sugar as a whole, and not saving sugar, would have severe repercussions on the economy?
Putting things into perspective, I concur with the arguments put forward by other analysts citing gross incompetence by the GuySuCo management and, more importantly, political interference over the years as responsible for the mess GuySuCo is in today. Recently, this has been further compounded by the slide in world market price for sugar and the withdrawal of the EU support. If one were to do a thesis on state-owned institutions in this country, one would find that because of political interference and influence, they all failed. A classic example is the GNCB.
It is the short-sighted policies being pursued that are causing more economic problems for the country, and thus inhibiting the long-term economic development. We have seen major development projects which are critically important to the long-term economic prosperity of the country being abandoned by the current administration. One of the major deterrents to the manufacturing sector and GuySuCo is the cost of production, coupled with the fact that operational costs are extremely high. To counter this and enhance competiveness in this regard, we need to re-engage the hydro power project. Had we pursued these projects a long time ago, GuySuCo would have no doubt been in a better performing shape today. Another important project that needs re-engaging is the fibre optic cable. These are projects that would aid substantively in long-term economic development, rather than bleed the country’s resources on non-productive spending, such as happens with SOCU. Things like SOCU are just political gimmicks that are creating the framework for an economic crisis.
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