AFTER repeating lies for a lengthy period, the peddler comes to believe his lies—they become normative. This is the case with the PPP when it comes to the Guyana sugar industry. Every day you read in the media the lamentations and charges that the current government has destroyed sugar and sugar workers. But at some point, the PPP needs to start telling the truth about the reasons for the less than healthy state of Guyana’s sugar industry.

Having presided over the country and the industry for twenty-three long years, the PPP, within the first year after losing power, launched the narrative that it was the new government that had destroyed the industry. This must be the most barefaced lie that has been concocted in the history of this country.

Despite evidence to the contrary, the party continues to preach this narrative to its supporters. In other words, it destroys the industry and then uses its destruction as a mobilization tool. This is the kind of cynicism that has driven political discourse in a country that is divided along ethnic lines. The outcome is the further polarization of the country as the mainly Indian Guyanese sugar workers are inundated with this false narrative from the PPP.

Sugar was profitable up to the early 1980s when its gradual decline began. However, it was under the PPP government that the destruction began. The long and short of the matter is this: The PPP destroyed the sugar industry through a combination of reckless and ill-advised economic initiatives and partisan political considerations. The party did nothing to improve productivity, to close the gap between production cost and market prices and ultimately to put the industry on an economically sustainable footing.

Anyone who has been following the news would know that when the Coalition came to office in 2015, the sugar industry was in terrible shape. Production was at its lowest. In 2013, for example, production had fallen to 186, 807 tons—the lowest in twenty-two years. This was way below Guysuco’s minimum production rate of 232, 000 tons that was needed to meet its local and international commitments. This was part of a trend that had taken root under the PPP government as far back as 2005 and was confirmed by the report of a Commission of Inquiry set up by the Coalition Government in 2015.

According to the report “From the years 2008 unto 2014, annual sugar production continued to be under 230,000 mt with its revenue base declining from G$32.l bn in 2008 to G$23.2 bn in 2014. Not surprisingly, for the said period there were losses each year and this loss position worsened from G$5.2 bn in 2008 to that of G$17.4 bn in 2014. That unacceptable level of performance required Government’s intervention by way of subsidies in the years 2011 to 2014.”

This huge subsidy to Guysuco under the PPP was grounded more in politics than economics—the PPP was more concerned with retaining the political loyalty of the sugar workers than about the economic health of the industry and well-being of the workers. While the industry was sliding down the road of destruction, GAWU and the PPP kept making unreasonable demands for increased wages. Between 2010-and 2014, for example, employment costs rose by 43% or 6.3 billion dollars even as the industry was posting huge losses. Since Guysuco could not afford this bill, it had to depend on government subsidy. In other words, the PPP was undermining the profitability of the industry and ultimately destroying it for political reasons.

Another contributory factor to bringing the industry to its knees was the so-called modernization plan in the form of the Skeldon estate. It was an ill-advised move that eventually cost the company US$72M and another $US7M for corrective work. That this project could not sustain itself is now well known. According to the 2015 CoI report: “Given the forewarning by the European Union that preferential prices would be reduced starting 2006 and continuing in the following years, it seems, in retrospect, that from a business and economic standpoint, the decision to pursue the Skeldon modernization project may not have been logical and based on sound considerations.” The stunning effect of the Skeldon saga on the decline of the industry cannot be overstated. In this regard, the conclusions of the aforementioned CoI are worth quoting.

According to the report: “This had a debilitating effect with very limited resources thus inhibiting its ability to provide funds for essential works needed on other Sugar Estates. Those estates from Uitvlugt to Albion suffered as a consequence. The effect was not only evidenced in declining yields and reduced factory efficiencies but led to a demotivated and demoralized staff at all levels. With the earlier exodus by way of migration of staff, especially those knowledgeable managers, and the sending off of experienced staff, upward mobility and re-designation of persons led to a lack of needed skills at various levels in the industry. The quality of leadership at all levels was compromised. Commitment, dedication and motivation so vital for performance were eroded and this situation was even worsened by what past and some present staff described as “external/political interference”. Such interventions are not new in State-owned entities in Guyana but may have varied in frequency and intensity. It is part of the landscape of State-owned entities. With a debt burden of G$82B, comparatively poor yields, poor cane quality, unusually high labour costs estimated to be 65% (of total expenditure), unrealistic demands by unions. shortage of labour in some areas, underutilized factories and having high “out of cane” periods and the unavailability of vital inputs due to lack of funds, all led to the critical state of affairs facing Guysuco”
There were other contributory factors to Guysuco’s decline, but one of the most ridiculous was a scheme to siphon off monies to GAWU. Under the PPP, sugar workers were mandated to attend training sessions in Marxism Leninism and Jaganism at GAWU’s Trade Union College. Between 2011 and 2015, the annual cost to Guysuco was $4M and the loss of 5, 890-man days. It meant, therefore, that the union and party, which were supposed to look after the interest of the workers, were ripping off the ailing company.

In the end, it was this government that halted the rapid decline of the industry. Despite the PPP’s rhetoric, the industry was saved. That thousands of sugar workers still have their jobs is testimony to the foresight of the government. There were some hiccups and errors in the process of rightsizing the industry that led to some justified dissatisfaction by some sugar workers. But there can be no doubt that the APNU+AFC coalition saved the industry that was brought to its knees by the PPP.