– proposal being examined by the President, says natural resources minister

By Navendra Seoraj

A ONCE flourishing agency and major revenue earner for Guyana, the Guyana Forestry Commission (GFC), is at its wits end, and has been forced to request a bailout from government in order to stay afloat.

The Commission, which is responsible for the administration and management of all state-owned forest land, had descended into a state of bankruptcy over the past five years, despite having a surplus of more than $4 billion at the end of 2015.

“Forestry is in a mess; staff are not paid. They owe GPL over $70M, and they also have outstanding sums for NIS and GRA,” said Minister of Natural Resources, Vickram Bharrat during an exclusive interview with the Guyana Chronicle on Monday.

As a result of its financial standing, the GFC has asked for a bailout of $581M, which sum the Commission believes would be able to offset its debts and sustain them for seven months.
“They think in that time, they can go back to their normal footing, and sustain themselves effectively after that, and hopefully become an annual revenue earner,” said Minister Bharrat, as he recalled the days when the forest sector would make “a lot of money” and do a lot of things.
The forest sector had accounted for about three per cent of the country’s Gross Domestic Product (GDP) between 2011 and 2015, and according to the GFC’s 2015 report, total revenue earned from the export of forest products was over US$54M in 2014. There was, however, a 15.8 per cent decrease in revenue in 2015, when exports totaled US$45.6M.
Reports following 2015 all showed a consistent decline in revenue earned by the forest sector. For instance, the country had earned US$39.1 million in 2017, and within the space of a year, earnings had dipped to US$37.9 million.

HOW DECLINE STARTED
“The sector’s decline started when the previous administration (APNU+AFC) took back lands from Barama and Baishanlin, which were both big concessionaires,” Minister Bharrat lamented, noting that those companies worked six to seven million hectares of land during their years of operation here.
Both companies ended their logging operations here in 2016. The country’s biggest forestry operator, Barama Company Limited (BCL), had initially announced plans to cut back operations, but eventually closed its forestry operations altogether, and focused mainly on plywood and veneer manufacturing. During its 25 years of operation, the company invested approximately $45B into the development of Guyana’s forest industry. Baishanlin, which, along with its partners had exported over 50,000 cubic metres of logs between 2007 and 2015, also “shut shop” entirely.
“Those lands have since been given to small concessionaires, and while I have no problem with that,” Minister Bharrat said, “you have to look at their capacity to work the land… We end up with a problem where you have 70 per cent of these concessionaires working; meaning that ten persons get the land, but only seven working.
“And the seven persons are only working the land up to 30 per cent, because they do not have the capacity to work it to 80 or 90 per cent… That is why they cannot generate the kind of revenue they got before.”

MISMANAGEMENT
The reduction in revenue and mismanagement, to some extent, were blamed for the “sad” situation in which the GFC finds itself.
“It is really sad, because we have to bail them out; they have asked for a bail-out, and I took the proposal to Cabinet last Friday, because our interest is that people should get paid,” Minister Bharrat said, adding: “The President will look into the matter; he has promised to look at it by the end of this week.”
During a media briefing last Friday, Minister of Parliamentary Affairs and Governance, Gail Teixeira had revealed that the GFC had not paid its staff for the month of July. The Commission has approximately 400 staff members, and faced similar issues since last year April.

Teixeira said, however, that that was not the case when the APNU+AFC took over government in 2015
“When we left office in 2015,” she said, “the GFC had a $4 billion surplus. Today it is bankrupt; it cannot pay the staff. It did not pay the staff in July, because it did not have money. There’s hundreds of millions of dollars in debt… How could $4 billion disappear in a ministry which brings in revenue all the time?”
The GFC has been facing financial woes for some time now, notwithstanding last year the government’s half-year economic report showing that there had been upward movement in the forestry sub-sector. The estimated growth was 7.8 per cent above the level achieved at the end of June 2018, making growth in the first half of 2019 8.5 per cent.
However, former GFC Chairperson, Jocelyn Dow had revealed last year that the GFC was falling short by up to $1 billion annually, to effectively carry out its function. This was largely due to the falling exports of logs compounded by increased activities at the Commission, relating to the conservation efforts brought on by the Norway US$250 million deal to conserve the forests.