THE Government of Guyana (GoG) is currently exploring several options regarding the viability of the Guyana Sugar Corporation (GUYSUCO) and the administration is likely to make a decision on the industry’s future by the end of the year, Minister of State Joseph Harmon disclosed on Thursday. He told reporters at a post-cabinet press briefing that several proposals were put to Cabinet by the hierarchy of the sugar company and each proposal will be examined. A Cabinet sub-committee comprising Harmon and the Ministers of Agriculture, Natural Resources, and Finance has been established by the President to examine each proposal.
Cabinet was on Tuesday briefed by Chairman of GUYSUCO’s board, Professor Clive Thomas, Chief Executive Officer (CEO) Errol Hanoman and representatives of the task force for diversification of the current operations of GUYSUCO and future plans. At that meeting, President David Granger said the report will be thoroughly examined and discussed at Cabinet in an effort to make a determination on the industry, which will be beneficial to all concerned.
Though he ruled out government’s continued support of the current state of affairs of GUYSUCO, he said decisions on the corporation will be made by year-end. The presentations made, he noted, ranged from maintaining the status quo (doing nothing) to examining a limited form of diversification. Maintaining the status quo however, has serious implications for the national treasury with GUYSUCO already having a current debt in excess of $80B.
“Those implications are that it will require $18.6B in 2017, $21.4B in 2018 and that is just to maintain the status quo – this of course is added to a current debt which GUYSUCO has…It is clear from what we have seen that some decisions will have to be made about GUYSUCO before the end of December.”
Harmon was careful not to state that the closure of GUYSUCO estates is an option. When pressed by the media, he said, “There were a range of options that were presented to Cabinet, I would not want to be very specific of these options, but I’ll give you the continuum of opportunities that is to say doing nothing, maintaining the status quo to diversification.”
The Minister of State said with each option presented there are implications and decisions [that] are likely to take any route. “Those are things which [the] cabinet sub-committee will deliberate on and report back to the full cabinet, after which the other steps which require consultation, and presentation to the National Assembly, presentation and engagement with the opposition, with the families and the workers of the industry.”
Harmon believes that it would be premature of him to disclose the proposals and possible options for the sugar industry, noting that “it is not always good to go about saying these are the options, these are the deliberations, because you may very well find sometimes at the end of your deliberations that you come up with a conclusion that is not consistent with your earlier position. It is always important that we be very careful and cautious in what it is we announced in the public, because any wrong step… can create panic and confusion.”
It is important, he said, that government be “very careful and deliberative” in how it deals with the information presented by the company’s board.
He stressed that after Cabinet reviews the report of the sub-committee, national consultations will begin. “… I cannot say pick this one, or that one…these consultations … may very well point you in a direction that is not consistent with what you thought of in the first instance, but what we want to arrive at is a situation that is in the best interest of all Guyanese.”
IMF would be concerned
Meanwhile, Harmon said the International Monetary Fund (IMF) would be observing the situation and would be concerned about government’s continued bailout of the industry. “Certainly, the fact that you have to spend so much money in one sector of the country would become a matter to be discussed because in their view, it would be skewing the whole economic plans of the country. When you put so much money into an industry, where the people in the industry themselves are saying this is not a viable option if you do not change certain things.”
He continued: “We cannot pour this type of money into an industry at the expense of the other developments which have to take place in the country such as development in education, development in health, development in security and all of these things that relate to the happiness and good life of the people of this country,” added the Minister of State.
GUYSUCO’s debt was also discussed at Cabinet and efforts are being made to have it “worked down from where it is now to bringing it down to zero and what implications are necessary to be done to allow same to happen. Following the presentation of the report of the Commission of Inquiry (CoI) into GUYSUCO to Cabinet, it was decided that a five-point approach would be adopted to address the issues raised by the CoI. Cabinet was required to give consideration to the plan, and after considering the plan should engage the opposition, and the National Assembly on the plan.
Additionally, Cabinet had mandated that consultation be held with other stakeholders, including workers of the corporation, their families and their unions. “None of the options are ruled out because they came out of a CoI, special teams of persons, task force looking at various aspects looking at the operations of GUYSUCO and these were very competent people looking at that…we’d like to pay serious attention to the recommendations that these persons have made,” said Harmon.
GUYSUCO recently gained access to new markets and according to Harmon, that is good for the continued operation of the entity. He said “GUYSUCO is still a growing entity and it still has to bat, find ways and means of marketing sugar and getting the best prices for sugar —bringing down costs…these are ongoing things, it is not as if GUYSUCO came to an abrupt end, you still have the estates, workers to be paid.” He said it would be great if the company finds new markets that would inevitably “bring us out of this and bring the industry back to profitability, but certainly these are early days yet.”