Feb 22, 2009 News
– AFC leader
By Tusika Martin
Guyana’s economy is precariously poised on a ‘one-legged stool’, Alliance for Change leader Raphael Trotman told the National Assembly on Friday, referring to the sugar industry during the 2009 budget debate.
During the debate the sugar industry came in for much criticism in light of the position that the growth of the economy is touted to be solely dependent on expected good performance of the industry this year.
Trotman said that the most frightening aspect of the 2009 budget is the ‘unreasonable burden’ being placed on the sugar industry to be the ‘bedrock’ of the country’s economic sustainability for development.
This fact, he added, is borne out by Minister Ashni Singh’s own words during the presentation of the budget when he said: “Given the weight of sugar in the domestic economy, and the manner in which the sector affected overall performance this year, it’s worthwhile that non-sugar gross domestic product grew by 5.9 per cent.”
During the debate Trotman, whose presentation was described as ‘very unfortunate’ by Dr. Singh, said that the important issue is what will happen if the sugar industry remains in a state of paralysis at the end of 2009.
Dr. Singh, he said, stated that there is an ambitious plan to ensure the turnaround of the industry.
“All of the objective analyses available to us tell us that this is unlikely to be the case. What is the exit strategy if this sugar reform plan fails? What will be the faith of sugar workers? We need to know,” Trotman told the National Assembly.
The success of the 2009 budget, he noted, is now resting almost solely on the performance of the sugar industry.
“What we have seen in the past – the shake-ups, the departures, the mismanagement, and the mistakes – leaves us little comfort that the government is going to get it right in 2009.”
Strikes, floods, drought, mechanical failure, and the impact of the 12.5 percent decline in quota price, all known to be likely and expected occurrences, will see the stool tethering on the brink of collapse, Trotman said.
“The outlook is not a positive one for the sugar industry and, by extension, the domestic economy.”
Leader of the People’s National Congress Reform, Robert Corbin, during the debate also had much criticism of the industry.
“It should be noted that the explanation given by the Minister (Robert Persaud) for sugar production could not be the whole truth.”
Of the 450,000 tonnes of sugar expected to be the country’s optimum sugar production, Skeldon was projected to achieve only 110,000 tonnes (25 percent) of sugar output.
In 2008, he added, 226,267 tonnes were produced, which represents a 15 percent decline.
“290,000 tonnes are projected in 2009, a 28.2 percent increase that is contingent upon several uncertainties outlined by the Minister, including dependence on a complete turnaround plan. So when will Guyana achieve the optimum 450,000 tonnes?” Corbin asked.
This target, he noted, is not dependent on Skeldon alone, but stated that the Minister of Agriculture has provided no details about how and when this target would be achieved.
“So I really wonder when we will get the truth, the whole truth and nothing but the truth.”
As if the condemnations were not enough, PNCR shadow Minister of Finance, Winston Murray, told the National Assembly that, while he would like to remain hopeful for growth in the Guyana economy in 2009, he cannot honestly say he shares the Minister’s optimism for 4.7 percent growth in GDP in 2009.
“The sugar sub-sector is plagued by many problems of which the weather is only one. In the 2007 budget speech we were told that the sugar cluster had been completely re-engineered, the Strategic Action Plan had been devised, and that the plan included actions to enhance agricultural productivity diversification as well to increase investment in research and development and new processing facilities.”
These proposed actions, without any reference to a Strategic Action Plan, he added, were in the 2008 budget speech, which again highlighted on that occasion as being ‘among the key areas targeted to achieve the goals of the sector.’
“It would appear that by the end of 2008 the Strategic Action Plan, along with the key areas targeted to achieve the sector’s goals, had not yielded the expected results. So the Board of Directors was sacked and an interim board was appointed in early 2009 to prepare a turnaround plan for the industry within a month of its appointment,” he added.
All these moves, he stated, are no more than a ‘diversion’.
In defending the industry, Minister of Agriculture, Robert Persaud, said that the performance of the sugar sector was mixed and is an area of deep concern.
Sugar production was affected by a myriad of factors, largely weather related.
The non-commissioning of the new factory at Skeldon also meant that some 60,000 tonnes of sugarcane could not be harvested for the production of 5,000 tonnes of sugar, Persaud said.
Significant sugar was lost during the commissioning process in 2008 and the final production for the industry was 226,267 tonnes of the targeted 279,000 tonnes.
Persaud told the National Assembly that GuySuCo’s production has been in decline since 2005.
However, the decision to change management and cut costs at the corporation is a bold and forward-looking step to reverse the decline and ensure that the modernisation and restructuring programme is not derailed.
GuySuCo also advanced its efforts in trademark and brand protection for its retail sugars, and moved closer to having the name ‘Demerara’ protected internationally, Persaud said.
He added that the ‘road ahead for sugar’ will not be ‘smooth sailing’, as the EU price cuts will take effect from the last quarter of 2009.
This will result in GuySuCo’s revenue declining significantly.
“We can overcome in the future. This will not happen this year or the next, and will certainly not happen by chance. It requires hard work, sacrifice and dedication to overcome the present and future challenges.”
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