The new government continues to be confronted with the challenges of inheriting a cash strapped and “poorly managed” sugar industry.
On Tuesday, during a Cabinet meeting, the government agreed to immediately release a total of $3.8 billion as a bail out for the Guyana Sugar Corporation (GuySuCo).
Minister of State Joseph Harmon confirmed the approval and said the monies are intended to pay salary and wages to workers and suppliers and procure fertilizers, critical spares, fuel and lubricants up until the first week in August.
The Corporation, which had received a total of $17 billion in bailouts over the last three years under the previous People’s Progressive Party government, had made an application for a $16 bailout when the APNU+AFC government took office a month ago.
But after considering the situation, which according to Harmon shows income flows of US$1.2 million against expenditure of US$5 million, up until the first week in August, the bailout was approved.
The Minister said from the Corporation production returns in its first crop some 6%0 of the bailout is expected to be repaid to the government coffers.
But while this bailout is remedial in ensuring the livelihood of the 16,000 sugar workers are sustained, the challenges for the government persists.
A shortfall of US$6.4 million is likely to arise between the period September and December where income flows are predicted to be US$13 million while expenditure stands at US$19 million.
Harmon reasoned that this persistent shortfall was directly linked to the declining prices for sugar. Some 60% of Guyana’s sugar is sold on the European market.
To this end, the Minister of state explained that Agriculture Minister Noel Holder has been asked to ensure better markets are found for Guyana’s sugar while the reliance on the European market is diversified.
The prices on the European market are not as attractive as it had been in previous years and the new government will be looking to other countries, including India and Cuba for help.
The APNU+AFC government had criticized the PPP government over its annual bail outs of the industry.
Their sentiments have not changed, but Harmon has reiterated the government’s intention to set up a Commission of Inquiry to investigate and make recommendations on the industry which is said to be on the brink of collapse.
Already the administration had been able to save some US$14,000 that was being paid to a Public Relations Consultant and several Indian nationals at the Skeldon Estate, who according to Harmon “were not doing anything much.”
The government had fired GuySuCo’s CEO Raj Singh and replaced the Board of Directors, whose members have since resigned, with an Interim Management Committee.
It pledges however to do everything within its power to put the sugar industry, which is the mother of the trade union movement in Guyana, back on its feet. (Kurt Campbell)