AGRICULTURE Minister, Robert Persaud, yesterday called on the European Union (EU) to be more flexible with regards to funding for the Guyana Sugar Action Plan. EU Ambassador, Geert Heikens, recently informed the local media that 14 million euros of the current round of EU budgetary support of a budgeted 90 million euros will be returned to the European Commission. And some six million euros may have been lost because the EU contends that the submission of the sugar action plan had been delayed.
The Guyana government vehemently disputes this contention.
The money was due to be disbursed within a 4-year timeframe for Guyana’s sugar industry, consequent upon the EU 36% cut in price for sugar from African, Caribbean, Pacific (ACP) nations, which took effect from July 2006.
Mr. Heikens said that under the Accompanying Measures for the Sugar Protocol, the EU had provided the 90 million euros grant to be disbursed from 2007 in four consecutive annual tranches, with the final installment due in 2010.
According to Ambassador Heikens, 58.2 million euros have already been disbursed to the government for reforming the industry; and this money has been invested in refurbishing sugar factories, establishing the Enmore packaging plant and restructuring the sugar production methodologies to enhance productivity and profitability.
This year, 18 million euros will be released to the Guyana government by the EU for investments in the sugar industry, with 14 million euros withheld for return to the Commission, primarily because Guyana did not meet its production targets.
This will have serious impacts on the fiscal synergies of Guyana, which has not yet recovered from the ravages of the annual 35 million euros loss of revenue and already sorely burdened by the immensely challenging dynamics of the turnaround plan that would eventually place Guyana’s sugar industry back on a firm footing.
The hardline stance adopted by the EU by withholding much-needed funding for the sector on the claim that the Sugar Action Plan was not submitted in a timely manner and that production fell short of projected targets needs to be revisited – especially in light of the EU Ambassador’s admission that Guyana has met all the general conditions for general funding from EU budgetary allocations, which are:
(i) that a national development or reform policy and strategy is in place or under implementation; [in this case the PRSP]
(ii) that a stability-oriented macroeconomic policy is in place or under implementation; and
(iii) that a credible and relevant programme to improve public financial management [PFM] is in place or under implementation. [This is guided by article four of the IMF]
The modern sugar factory at Skeldon is undergoing teething problems, which is compounded by aberrant weather conditions due to the climate change phenomenon; while the industry has encountered severe industrial problems because of a chicken and egg situation – where production is tied to a committed labour force and, conversely, workers’ incentive payments and benefits are dependent on the levels of production.  The workers’ plight is real and immediate and their patience is wearing thin.
However, the Guyana Sugar Corporation (GuySuCo) is contending that it cannot meet the workers’ needs because production is not reaching targets.
How then can the EU rationalise the withholding of such a vital part of the grant meant to help the industry get back on its feet after its own action has cut its legs, especially when the Ambassador has admitted that Guyana has been performing creditably on all fronts and has himself praised this country’s performance as regards achieving the Millennium Development Goals?
The development paradigm of this nation has breached many frontiers; but so much more could be accomplished if there is genuine partnership without unreasonable and inflexible rules that take no consideration of the impacts to the economy, and consequently the socio-economic landscape of this nation.