Editorial
Stabroek News
May 31, 2001

In a very well presented feature last week to celebrate its 25th anniversary the Guyana Sugar Corporation reminded us how important the sugar industry still is to Guyana. As Dr Ian McDonald noted in his piece tracing the decline of the industry after nationalisation and its subsequent recovery under private management it contributes about l9% of GDP, is the largest net export earner, the largest contributor to public revenue and including cane farming employs 25,000 persons directly (an estimated l0% of total employment) and l0,000 indirectly.

The collapse of the sugar industry, as seemed possible at one stage (production had fallen to l29,820 tonnes in l990) would be a major national disaster.

The corporation has a strategic plan to reduce the cost of production to about ll US cents a pound by expansion and increasing productivity. Production would rise to about half a million tons and the plan includes rehabilitation, technological improvements and diversification of sugar products. Yields in the field and factory recoveries would increase, and the idea is to retain existing overseas markets and supply the growing needs of the Caricom market, over 40,000 tonnes in the year 2000. It will add value to the production of raw sugar by establishing sugar refining to supply Caricom markets, a distillery to convert molasses to alcohol and facilities to produce and package special Demerara brand sugar for retail sale.

The strategic plan has been accepted by government and the unions and finance is being sought from the World Bank, so far without success. The alternative of privatisation has not been accepted by the government though many feel it should remain a live option. The industry has suffered severely from the falling euro in which the price in its main market is denominated. It will also suffer from the `Everything But Arms' initiative of the European Union which allows other sugar producers access to the European market and there is a more fundamental threat to its preferential price in Europe.

Management has crafted an intelligent plan but there are pitfalls on the road ahead. Will the World Bank come up with the funding and if not are there alternative sources or will privatisation have to be considered? How much will the new EU initiative affect the market and how long will the special price remain? From the beginning of our history as a colony, sugar has been vulnerable as an export industry. Now even if the industry can achieve the high levels of productivity envisaged through efficient management some of the dangers that lie ahead are effectively beyond our control.

One final point must be made. We badly need a senior ambassador in Brussels to help to press our case on a continuing basis. Apart from the fact that the sugar industry is vital to our future, the ACP-EU Council of Ministers recently delegated to the Committee of Ambassadors important powers. Without a senior representative there Guyana has little chance of being involved and winning friends and influencing people.