AS People’s Progressive Party (PPP) presidential candidate Irfaan Ali once again floats the re-opening of the sugar estates should his party regain power, not only do economists disagree with the idea, but they wish to see the public educated on why this is not the best option for Guyana.

In the Stabroek News Sunday Edition, while speaking on his plan to create 50,000 jobs should he be elected, Ali stated that “11,000 jobs resulting from the reopening of closed sugar estates” would come through him being in power.

His party members have long criticised the government’s move towards the privatisation, divestment and diversification of the Skeldon, Rose Hall-Canje, East Demerara and Wales Estates of the Guyana Sugar Corporation (GuySuCo), beginning with the retrenchment of some 4,000 workers.

During its governance, the current Administration had spent some G$37B in bailing out the “financially hemorrhaging” industry to protect the livelihoods of workers.
Eventually, Government had stated that it could not continue to bail out the sector or GuySuCo, which had amassed a debt of over $82B at the expense of other sectors also in need of development.

Former sugar workers have since been paid their severance in full. Some have joined the work force at the Blairmont, Albion and Uitvlugt estates; others have taken up jobs across the agriculture and other sectors, while some turned to self-employment.

Since then, and more so in the current political season, the PPP has directed much of its campaign promises to the retrenched sugar workers visible in social media ads, and with Ali’s most recent comments.

However, in an interview with the Guyana Chronicle earlier in the year, Director of Economics at the Caribbean Development Bank (CDB) Dr. Justin Ram, assessing the situation, made it clear that for the industry to remain viable, there must be some form of restructuring.

“The sugar industry has been important to Guyana for quite some time, and if the sugar industry is to remain viable, of course there needs to be some restructuring, because it is important that the sugar industry can stand on its own two legs, meaning that it can be commercially viable,” he said.

Expounding further, the economist stated that the environment in which the sugar industry operates must be conducive for it to survive through the utilisation of technology to allow it to become competitive in the modern world.
“Ultimately, like all of our industries in the Caribbean, we have to be globally competitive. It is not about servicing a protected market; you have to be globally competitive, and that means utilising the right labour skills; utilising the right type of technology to drive efficiency, improvements of productivity. That, I say, is true for the sugar industry, and it is true for all the industries within Guyana, and certainly across the region,” he said.

OPPORTUNITIES
Since its decision to reposition the sugar estates, the Government has long made known its belief that numerous opportunities are available through agricultural diversification.
“We have to produce our commodities more cheaply, otherwise, we will not be able to compete. Whoever is in the Government, we want to save the sugar industry, but it must be efficient and competitive. We are not working to destroy the industry; We are working to develop the industry. And the industry has been contracting. Some countries like Trinidad and Tobago, Barbados, St. Kitts and Nevis, Jamaica, [and] Belize have seen their industries contract. Some have disappeared altogether, because the cost of production was too high. Guyana is trying to preserve its industry,” President David Granger in 2017 explained to residents of Mahaica-Berbice (Region Five).

This is a position that Economist, Sydney Armstrong shared with the newspaper in a recent interview where he hailed the downsizing of the sugar industry as “the way to go”.
He stated that the only issue he has with the matter was the transition towards downsizing, which he believes could have been conducted more tactfully.

“But it’s inevitable that we move towards downsizing sugar or getting GuySuCo into value-added processing… Guyana is producing sugar somewhere about US$0.24 cents/US$0.25 cents per pound, and Brazil is producing it for about US$0.14 cents per pound. Tell me, where are we going to be competitive, and when? What we need to do is to downsize to a level that we can manage, and have it profitable so that it can be sustainable to itself,” he said.

PRIVATE SECTOR
Meanwhile, the CDB director has also advised that the private sector must be brought in the loop to increase opportunities for employment through the sector.

“I would imagine that the government would have looked at all of the options, and part of it could mean that there needs to be a greater level of private sector involvement in the industry. Remember, you want the industry to be viable. Then that means that there’s greater opportunity for employment directly related to the industry. and for indirect employment from the linkages to that industry. So I think that’s what Guyana needs to look at,” Armstrong said.

A report and recommendations, based on three bids already made on the GuySuCo estates pending privatisation, was in January 2019, handed over to the National Industrial and Commercial Investments Limited’s (NICIL) Steering Committee.
The documents were compiled by PricewaterhouseCoopers (PwC), the consultant firm hired by NICL’s Special Purpose Unit (SPU) to oversee the privatisation of the Rose Hall, Enmore and Skeldon Estates.

The information, after being assessed by the Steering Committee and Cabinet, will result in a final pronouncement from the government regarding moving forward.
In the meanwhile, while the decision was a tough one, Armstrong believes that more can be done to help the public better understand the pros and cons or restoring the sugar estates to their most recent state.

“What the government needs to do,” he said, “is to sensitise the young and the rational-minded as to cost and the benefits associated with keeping the sugar industry up and running to the level that it once was. [They must speak to] the amount of money; $5B a year being spent on an industry which is not profitable. Project five times $5B. Do you know what that could do for health, education or other agriculture aspects? [They need to show] that if we continue along this path, this is where we’re going to end up. However, this is an alternative that we’re heading to.” Speaking briefly on the matter, Economist Rawle Lucas had summarised: “It’s unfair to be subsidising one group with other people’s money, and there’s no real return coming in to the economy.”

Nonetheless, criticisms come from the opposition even as GuySuCo, the Guyana Agricultural and General Workers’ Union (GAWU) and the National Association of Agricultural, Industrial and Commercial Employees (NAACIE) met since in 2011 with workers at the LBI factory to discuss its closure and their re-employment.
In the same year, the factory was closed under the PPP, and workers were re-employed at the Enmore Estate.

Assessing these realities in contrast with the current push, Armstrong reasoned: “Sugar has always been political. Politics, at the end of the day, kept the sugar workers and the control of the last administration.”