Private Sector bodies “Extremely Concerned” about downscaling of Sugar Industry

The Private Sector Commission (PSC) and its affiliates have expressed concerns with the downscaling of Sugar Industry and the closure of several estates which they say will affect business across the country.

“Our members are located across the length and breadth of Guyana, and the survival of their businesses depends upon a public that spends on goods and services. Most income generation is derived from employment, and when this is reduced significantly it affects the entire chain, from manufacturing and importation to household consumption,” a statement from the PSC said.

It notes that the sentiment was supported by the Georgetown Chamber of Commerce & Industry (GCCI), the Upper Corentyne Chamber of Commerce and Industry, the Linden Chamber of Industry, Commerce and Development, the Region 3 Chamber of Commerce and Industry, the Central Corentyne Chamber of Commerce, Berbice Chamber of Commerce and Development Association and the Guyana Manufacturing and Services Association (GMSA).

The private sector calls on Government to hold its hand on the current approach towards closure of estates and pledged “its considerable experience” to work with Government to explore all possible options to avert closure.

The business community expressed the belief that five years later, there will be much regret.

The Guyana Sugar Corporation (GuySuCo) remains the largest employer other than Government and the main foreign currency earner. Guysuco’s role has expanded to include providing Drainage and Irrigation for many communities and other sectors as well as providing community health services.

In recent years, however, the corporation has delivered financial losses and has become dependent on Government/taxpayers subvention to enable continued operation. Many factors have been attributed to the declining performance of the industry, not the least of which was the loss of the preferential pricing of the lucrative EU market. There is the view that these could be addressed to turn around the industry.

In recognition of the critical importance of the sugar industry, the private sector makes the following observations:

1. The Government-initiated Commissioner of Inquiry (COI) did not recommend closure of any estate but, on the contrary, recommended divestment into private hands (See Volume 1 of COI page 36, section 7, sub-section 1, 11,111,1V).

2. A review of GuySuCo’saudited financial statements for the year 2015 reveals that more than G$10.0B would be removed from private employment income should Government proceed with the closure of estates. This, in turn, would have a direct negative effect on consumer spending in the communities which, directly or indirectly, depend upon income, from sugar.  Such a decline in consumer spending would also have a diminishing impact upon all commerce with concomitant negative spin-off effects on the economy as a whole.

3. GuySuCo is a major earner of foreign exchange. Closure of any estates would, therefore, severely impact upon the availability of foreign exchange and increase the price at which it is sold.
   

4. The restoration of Guyana’s economy is inevitably, and intimately, linked to the future of sugar.