Private sector groups urge gov’t to hold plans to close sugar factories

– offer to aid in looking at alternative options

Private sector organisations yesterday urged the government to stay plans to close sugar factories, while offering their “considerable experience” to explore alternative options to sustain the sugar industry.

“The private sector calls on government to hold its hand on the current approach towards the closure of estates,” the Private Sector Commission (PSC) and its numerous affiliates yesterday said in a joint statement, while arguing that the restoration of Guyana’s economy is inevitably, and intimately, linked to the future of sugar.

Under its plans to “scale down” the Guyana Sugar Corporation (GuySuCo), government has outlined a scheme to consolidate three estates with three factories that would produce sugar for domestic needs and foreign markets, while divesting the company’s remaining assets, including the Skeldon Estate. Following the closure of the Wales factory, there are plans to close the Enmore and Rose Hall factories this year. The plans have triggered protests by workers and their unions as well residents in communities that directly benefit from the operations of the factories.

Noting that the sugar industry remains the second largest employer and the main foreign currency earner, the private sector organisations yesterday said that it would be sad to lose the sugar industry and realise five years later that this would have been a success story. They reminded that the sugar industry has played a significant role in the overall economy of Guyana since being nationalised in 1976, with GuySuCo’s role having expanded to include providing drainage and irrigation for many communities as well as health services.

However, they acknowledged that in recent years the corporation has delivered financial losses and has become dependent on government/taxpayer subventions to enable continued operation.

They further noted that the declining fortunes of the industry have been credited to many factors, including the loss of the preferential pricing of the lucrative European Union market.

“There is the view that these could be addressed to turn around the industry,” they stated.

They highlighted the possible impact that estate closures would have on the spending ability of communities and by extension the earning capacity of the private sector.

In particular, they noted that GuySuCo’s audited financial statements for the year 2015 revealed that with the closure of estates more than $10.0 billion would be removed from private employment income.

They said reduced private income would have a direct negative effect on consumer spending in the communities, which, directly or indirectly, depend upon income, from sugar, leading to a diminishing impact upon all commerce with associated negative spin-off effects on the economy as a whole.

“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,” they explained, while also noting that the closure of estates would also severely impact upon the availability of foreign exchange and its price.

They also pointed out that the government’s Commission of Inquiry into the state of the sugar industry did not recommend closure of any estate and instead recommended divestment into private hands.

The PSC affiliates credited in the statement include the Georgetown Chamber of Commerce and Industry, the Upper Corentyne Chamber of Commerce and Industry, the Linden Chamber of Industry, Commerce and Development, the Region Three Chamber of Commerce and Industry, the Central Corentyne Chamber of Commerce, the Berbice Chamber of Commerce and Development Association and the Guyana Manufacturing and Services Association.