Closure of Sugar Estates Does not Mean Closure of Workers’ Lives: Re-Casting Sugar Industry Debate to Center Stage

When any government cannot give a simple answer to a simple question, it's time for its citizens to worry. It has been reported that the government cannot give a straight forward answer on the exact location of the Exxon $(US) 18 million signing bonus! Different government officials have offered different responses.

Closure of Sugar Estates Does not Mean Closure of Workers’ Lives: Re-Casting Sugar Industry Debate  to Center Stage

When any government cannot give a simple answer to a simple question, it's time for its citizens to worry. It has been reported that the government cannot give a straight forward answer on the exact location of the Exxon $(US) 18 million signing bonus! Different government officials have offered different responses. Mr  Ramon Gaskin says that this sum was not shown in the most recent Bank of Guyana report. Minister within the Ministry of the Presidency, Joe Harmon did not confirm the exact location of the funds but said that the funds would be paid into the Consolidated Fund. At this point, Guyanese are bewildered and don't have a clue as to where the bonus is located.

The fundamental point is: “how can any reasonable person trust such a government that wavers on such a simple matter?” And when such a maneuver is combined with other mind boggling acts of the government that also run counter to the constitution, like the unilateral appointment of the GECOM Chair as well as the closure of 4 sugar estates, the public’s misgivings on government’s policies and actions tend to expand exponentially. The government has to blame itself for the erosion of its own credibility. While much has been written about the unconstitutional appointment of the GECOM Chair and about the firing of David Hinds and Lincoln Lewis as columnists of the state-owned Chronicle newspaper, the plight of sugar workers who have been the victims of a system that they’ve inherited but didn’t create, was allowed to slip from the radar. The sugar workers’ dismissal and treatment are burning national issues that also affect the livelihood of over 40,000 people. These sugar-related issues deserve to be recast onto the center of the political radar. .

Why have we allowed the national discourse to shift its focus away from the tremendous suffering of the displaced sugar workers and their families, onto abstract issues like the David Hinds' and the Lincoln Lewis' firing from the Chronicle, as well as, the predicament of the WPA party in the coalition government? If the social and economic upheaval within sugar estate communities is not treated properly, including with care, the situation could perhaps explode beyond control.   

Everyone knows that the PNC-led government closed 4 sugar estates (1 in 2016 and 3 in 2017) and in the process ignored the recommendation of its own COI (Commission of Inquiry). Their decision was supposedly based on economic considerations. The government claimed that within 3 years, they had to subsidize the industry by over $(G) 30-40 billion, and they could not allow the sugar industry to bleed the national treasury. They made it appear that they were giving out handouts to sugar workers over the 3 year period. 

No one would argue that sugar production should not be viable, but there should have been the opportunity to allow sugar to make a turnaround in 3 years. This option was rejected by the government but they couldn’t offer a suitable alternative, other than to fire sugar workers and refuse to pay them their full severance package in accordance with the law. The sugar estates’ closure was executed without having the benefit of the results of a social and economic impact study. If there was a compassionate government that wanted fairness to all sides, it would have first conducted such an impact study, as a matter of priority and also of obligation.  

Over 7,000 sugar workers (accounting for over 40,000 livelihood), who had known no other industry throughout their lives, were fired with no alternative jobs or re-training for the majority of workers. Most of the workers’ families face imminent poverty. At least two workers, one at Wales and one at Rose Hall committed suicide as a result of their dismissal. Social and economic problems abound in the sugar estate communities. The untold suffering is succinctly expressed at Wales sugar estate where there are ominous signs of an emerging humanitarian crisis. The situation would have deteriorated further had it not been for the relief efforts of various NGOs.

Noted social critic and commentator Chris Ram blasted the PNC-led government as well as the sugar unions for not doing enough to relieve the workers of their unimaginable social and economic distress. The unions’ appearing on the bargaining table with the government is not enough; they need to offer material relief as well as work with the private sector to re-train and hire some of the displaced workers. The unions should not expect the government to move in this direction. It would be a good idea if the unions could let the public know what they have done so far to relieve workers’ distress, and also what other measure(s) do they plan to take in regards to relief work.   

The PNC-led government has forgotten how sugar pumped an additional $(G) 90 billion (taken out of the sugar levy funds) into other sectors of the Guyanese economy over the period 1976-2000. The government   forget that sugar subsidized drainage and irrigation in the amount of billions of dollars, not to mention sugar's countless billions of dollars' subsidy to healthcare. The sugar industry also subsidized the local market price of sugar to the Guyanese consumers.  

It was argued by supporters of the sugar industry that subsidizing sugar for another 3 years would have probably cost the taxpayers about 3% of the country's budget and that's a price the country could have paid to save over 7,000 direct jobs as well as thousands of indirect jobs. We are also talking about saving the livelihood of 40,000 -50,000 persons.

We have always held a position that certain industries, like sugar and bauxite, are also strategic to the communities in which they are located. The communities' culture, life style, and history are interwoven with the industries they serve and whose (industries) real worth cannot be evaluated in terms of cost benefit analysis alone. If a cost-benefit analysis is conducted on several state agencies, for example, the results would show no justification for their existence. But perhaps, they serve a strategic purpose! It’s necessary therefore, that policy makers understand this basic principle.

We recently learnt that the government has borrowed $(G) 30 billion to keep the remaining factories operational, to pay off GUYSUCO debts (which are owed primarily to government agencies such as the GRA, and NIS), and to privatize the estates that have been closed. However, the accounting method utilized to arrive at the figures on operational costs, etc., are highly suspect. Some observers say that these operational costs in particular have been inflated to strengthen the government's case for closure of the sugar estates by pointing to the huge deficit between production cost and income. We leave the creative cost-analysis accounting to Chris Ram, Nigel Hinds, and others.   

Supporters of the sugar industry say that the loan ($(G) 30 billion) could have kept the 4 closed sugar estates running for 3 years during which time, re-structuring, including diversification, would have kicked in. That approach did not find favor with the government. It's hard to make any sense of the government's approach, other than to view it as a vindictive political measure. Now GUYSUCO says that they will begin to make a profit in the sugar industry within 2 years. Did they factor in the expected returns of privatized sugar estates into their calculation?  If this is their analysis, why had this evaded them during the past two years when they readily crushed the dreams and livelihood of thousands of sugar workers?   

The vacillating approach towards the sugar industry reflects the government's dilemma in coming to terms with massive social and economic upheaval associated with the closure of the 4 sugar estates. Had they done the impact study, they could have avoided much of their self-inflicted wounds. Instead, the government’s plan was also designed to destroy the traditional base of the PPP support. This was more important to them than to consider the wider social and economic impacts of family and labor dislocation, among others. It seems that it was only after a multitude of negative signs of acute distress have become evident and widespread, that the government has reluctantly decided on a so-called "turn around" policy of privatization for 3 of the sugar estates that have been closed.

Still, whatever policy has been developed for the sugar industry, it has not yet been made public nor articulated. Guyanese are, once again, left to speculate, as has happened in so many areas of public policy. Whatever approach or policy the government adopts should comprise the re-hiring and re-training of displaced sugar workers; and the re-opening of the closed sugar estates, and it should also utilize resources to expand the international market for sugar. But these measures must be part of a wider vision for the sugar industry! YES, SUGAR HAS A GOOD FUTURE!