Commentary on Guyana: Whither are thou GuySuCo?

A circular of the Guyana Agricultural and General Workers Union (GAWU) dated 25 January and untitled “GAWU in the dark about sugar investors” says that, even when being a “sugar stakeholder” representing some 15,000 sugar workers had to learned, through media reports (!), that the government and the Guyana Sugar Corporation (GuySuCo) are talking to “more than one foreign investors” presumably interested in the sugar sector. These include an Indian company, Srinath Ispat Limited, the Integrated Casetech Consultants (involved in the running of Skeldon) and Sunrise Investing LLC/ Sunrise Holdings that is run by the son-in-law of the current Guyanese prime minister, Moses Nagamootoo.

Moreover, GAWU adds that a Memorandum of Understanding (MoU) was signed on 8 December 2016 by the Guyana Office for Investment (Go-Invest) and D Rampersad and Company Limited (DRCL) for a feasibility study on “an integrated sugar processing facility for GuySuCo’s assets and related assets in Skeldon.” The MoU was made known only on 31 December2016, at a meeting of government ministers with representatives of the GAWU, the National Association of Agricultural, Commercial and Industrial Employees (NAACIE) and members of opposition, the People’s Progressive Party/Civic (PPP/C). Minister said that a report had been shared with the unions asking for comments, but the unions did not contribute. On a circular dated 20 January, GAWU corrected this information reported by the local media, saying that at the 31 December meeting, the government offered to share the information but to the date of releasing the circular no information had been received.

This is only the latest episode of what appears to be a highly opaque process to decide what is next for the state-owned and state-run GuySuCo and what shape, if any, would the sugar sector may have in the future.

To the closing of the Wales estate in 2016 along with its proposed diversification into rice-paddy project, news (or rumours?) abound: the possible sale of Skeldon, the possible sale of Enmore with its packaging plant and the closure of LBI (La Bonne Intention) scheduled since 2011 and its merger with Enmore, closing Rose Hall. In NAACIE’s opinion, the government wants to reduce to sector to three estates: Wales/Uitvlugt, Albion/Rose Hall and Blairmont, and to abandon non-sugar operations like health and drainage services.

And not to forget, GuySuCo’s hard financial situation with debts that, according to the local media, amount to some GYD 77 billion (USD 387.6 million) with organisations like the National Insurance Scheme (NIS) and the Guyana Revenue Authority; local banks and the Caribbean Development Bank; loans related to the Skeldon Sugar Factory, to the Pension Fund and to the same Guyana Agricultural Workers Union (GAWU)..

GuySuCo management says they need a GYD 18-billion subsidy in 2017, and even if granted, there is an estimated loss of 12 billion. They added the unions cannot expect a wage increase this year either.

The reality is that sugar workers have not gotten a wage increase in 2015 or 2016 neither have benefitted from the customary Annual Production Incentive (API) in 2016 –  the first time in 64 years! – while, in what could be interpreted as a rebuff to GAWU, GuySuCo declined a paid-release to delegates attending the 21st GAWU Congress (20, 22 and 23 August 2016), being the first time in 40 years this happened. Management alleged that financial difficulties prevented paid-release of delegates or to assist with transportation costs. Nonetheless, the GAWU hold a successful congress – probably one of the few Guyanese unions that hold their statutory meetings on a regular manner.

Discussions about the future of GuySuCo appear to this writer as lacking transparency and clear proposals, while the government (as only shareholder) and management (responsible to lead the industry) seemed not to be able – or willing – to attract all sugar stakeholders to a meaningful discussion. Among the latter, there is the GAWU that represents 15,000 sugar workers who, along with their families, may add to about 70,000 Guyanese – about 10 percent of the country’s total population (800,000 in 2012). With urban dwellers comprising around 28 percent of the country’s population (Unicef figures), and the fact that the sugar production is fundamentally a rural activity, the sector is a major cohesive influence in the Guyanese society – besides its contribution with 16 percent of the national GDP (30 percent of agricultural GDP) and being the country’s largest foreign exchange earner. This industry, so important to Guyana, produced only 183,652 tonnes of sugar in 2016 (lowest since 1990) well below the initial target of 242,000 tonnes and the revised target of 231,000 tonnes.

It is not clear, to this writer, where GuySuCo is going.

Background information

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