Guyana’s sugar industry must brace itself for ‘bitter days’- Professor Thomas warns

By Michael Younge

Things will get far worse before they get better and the sugar industry in Guyana must brace itself to face bitter days ahead, unless those who are managing the sector make some tough but necessary decisions now.

This is the position of renowned Caribbean Economist, Professor Clive Thomas, who, speaking with Guyana Times International, laid the premise for a renewed national approach to managing its affairs.

Professor Thomas said there is urgent need for the establishment of a national task force or commission to investigate the current state of the sugar industry. He said that such an entity would also be tasked with coming up with non-political recommendations about how to move the industry forward in a realistic manner.

Thomas said that the turnaround plan that is being used to manage the affairs of the Guyana Sugar Corporation (GuySuCo) is not yielding much fruit and a more determined effort is needed to bring an end to the bitter times that the sugar industry is facing.

“We have to make some fundamental decisions about where we want to go with sugar in the future,” he said, explaining that the industry is in a conundrum and in a state of despair.

Thomas noted that currently, Guyana is producing sugar at a cost of 34 cents a pound, which is two times higher than the average world production price for the commodity. He said this is unacceptable and the situation will continue unless urgent reforms are implemented.

More focus on

biggest concern

Thomas said he does not understand why there is an endemic insistence on exportation, while little or no focus is being placed on tackling the biggest concern – reducing GuySuCo’s overall production and operational costs.

He said it is necessary for the industry to be treated as a national asset and national institution and any intervention must be rooted in that premise, if there are to be long-term benefits.

Thomas said the industry’s debt stood at Gy$89 billion in 2009 and has now increased to Gy$92 billion. He said it is necessary to look at refinancing the operations of GuySuCo in light of the falling world prices for sugar and the concomitant challenges the industry is facing.

The academic believes that part of the problem with turning the industry around has to do with the lack of consultation before critical decisions are taken. He said that it is necessary for GuySuCo to have a Board comprising Directors who are all professionals and experts in the field.

According to him, this was the main reason Booker Tate failed when the Government opted to contract external management services.

He is not optimistic that much will change, unless there is national discourse to arrive at the best possible solution to end the bitter taste in the industry.

However, despite his criticism of the current management structure of the industry, Thomas is not in support of privatising the sugar industry.

“I do not believe that the private sector would be able to do what the Government could not do and have not done to date,” he said, adding that the stakes are too high.

Thomas said the call for the privatisation of GuySuCo is probably the most widely recognised but contentious proposal ever put forward for the future of the industry. “This call always evokes intense political controversy,” he said.