IN the 18th and much of the 19th century, sugar was among the most profitable investments in the world. Most Caribbean countries were founded and populated because of sugar, and its earnings created a rich and influential class in Western Europe, particularly in England, France, and Holland. Indeed, sugar was regarded as so valuable that many wars were fought for the possession of sugar colonies. In the final peace treaty of one of those wars, for example, Holland found it advantageous to surrender its colony of New Amsterdam, now New York, to the English for Suriname.

Guyana, formerly the Dutch colonies of Essequibo, Demerara, and Berbice, mirrored this same characteristic of profitability from their sugar plantations, which colonies like Barbados and St Domingue (Haiti) had long been enjoying. In the 19th century, when the Booker Bros. company consolidated most of the colony’s sugar estates, the sugar industry became very profitable, and Bookers grew into a large company and the most important economic and social force in the colony.

Independence came in 1966, when the industry was nationalised and began a spiral of decline, surviving only because of the subsidy granted to exports by Britain, the former colonial power. With changing circumstances, the subsidy was removed, and the industry became financially unprofitable, requiring budgetary subsidies. When the APNU+AFC government came into office in 2015, they decided to end the financial drain on the country’s finances by closing some estates with the intention of finally closing the industry.

An opposing body of opinion felt that viewing the industry in narrowly financial terms was one-dimensional—a formula applicable to smaller companies but not to a large industry affecting so many other areas of Guyanese social and economic life. President Irfaan Ali, in his media engagement programme “In the Seat”, expressed optimism that the industry would again become financially profitable and highlighted that even in its present state, it is so economically and socially important to other areas of Guyanese life that it must be maintained until profitability is restored.

President Dr Ali pointed out that the present budgetary support for the industry will decline as the sector is revived and becomes less unprofitable. Currently, reviving the industry is akin to restarting it from scratch, as the factories and other physical infrastructure of the estates had been neglected and nearly destroyed, and the work culture of the industry had almost disappeared. The initial costs of revival will be high, but this will decline as efficiency is restored and the Gas-to-Shore project begins supplying electricity at half the present cost. Eventually, subsidies will no longer be needed, and the industry will return to its halcyon days.

Even in its current debilitated state, the sugar industry provides benefits to other areas of the economy. For one, it supplies high-quality sugar to Guyanese consumers at affordable prices. Without the sugar industry, Guyana would have to import sugar, and first-quality sugar would be unaffordable to many. On one occasion, for example, Guyana imported sugar from Guatemala, which turned out to be of inferior quality and was rejected by many consumers. The sugar industry, therefore, not only meets local consumer needs but also saves foreign exchange that would otherwise be spent on imports.

Molasses, a by-product of sugar manufacturing, supports the rum industry in producing some of the best rums in the world. Rum producers have tried using imported molasses but still prefer Guyanese molasses. As such, the rum industry and most of the business community support the maintenance and revival of the sugar industry.

The sugar industry has always had a multiplier effect on local economies in rural areas. President Ali gave an example: “When you look at what sugar meant—think of Wales, for example. When the factory was closed down at Wales, a market that had hundreds of vendors closed immediately, and the shops around also closed.”

Considering the value of the spinoffs from a sugar estate and the industry as a whole, when weighed against the financial losses sustained in any given year, there is at least an equalisation. The management of the industry, along with Indian and Cuban expertise, state authorities, workers, and their trade union, are all optimistic that sugar will once again become an essential part of the Guyanese economy.