Latest update April 18th, 2024 12:59 AM
Jan 09, 2016 Editorial, Features / Columnists
In Guyana, falling prices for sugar, rice, bauxite and gold have led to the slowdown in economic growth. Fortunately, there have not been the corresponding job losses. And with the recent disclosure by the Minister of Finance that the country ended the year with a two percent growth rate, means that the people should brace themselves for another challenging period in 2016. However, some are optimistic that 2016 will be endowed with some good news that once prudent measures are put in place by the government, the economy will turnaround.
But the government must be committed to make the tough decisions needed to get the economy back on track in the midst of falling commodities on the world market.
It is only natural that the government turns to agriculture which has been the pillar of the economy for decades not just to reduce the food import bill, but also to create jobs, diversify the economy and stimulate growth.
The idea of turning to agriculture, especially sugar and rice is not new, and although the revenue from both commodities is lower, the commodities have managed to surpass their targets for the first time in more than a decade.
But there are growing problems in both industries that the government must address before the economy gets worse.
GUYSUCO has been in severe financial straits over the past few years, and has been receiving billions of dollars in bailouts from the government, with another $12billion earmarked for 2016. Yet the industry is not showing any signs of recovery.
Along with the bailouts, GUYSUCO has also incurred $82 billion in debt from local, regional and international financial institutions. The Skeldon sugar factory, commissioned in 2009, has accounted for much of those debts. Subsidizing GUYSUCO with billions of the taxpayers’ dollars is a short-term solution. With an estimated 16,000 workers, GUYSUCO seems to be a drag on the economy.
The Commission of Inquiry which cost the taxpayers more than $77 million came up with some of the weirdest recommendations that have even confused Ministers in the government. Why would the COI make recommendations without a detailed plan and a budget to execute them? The Prime Minister has stated that the COI report is weighty with far reaching effects, yet, after two ministerial weekend retreats, the government has not made any statement on the report because there is nothing new in it that the average person does not already know.
The COI report remains a secret and so are the inept proposals from the Minister of Agriculture who seems to be at a loss in the process. Furthermore, how can the government expect GUYSUCO to turn around when it appointed the same individuals who had presided over its demise, as its new CEO and deputy CEO? Subsiding GUYSUCO indefinitely seems to be the only answer for the government. This could be a colossal mistake.
The rice industry is facing some serious problems especially in the wake of the abrupt termination of the rice arrangement by the Venezuelan government. The Venezuela/Guyana oil for rice agreement saw Guyana exporting rice to Venezuela at concessionary prices in return for Venezuela’s oil. And the money earned went to pay the rice farmers.
In 2015, Guyana’s rice industry recorded bumper crops but despite increased exports of rice, there has been a significant decrease in money earned from the exports, compared to the corresponding period of 2014.
Unless government subsidies are given to rice farmers in the form of pesticides and fuels, many are predicting that the next rice crop will see a substantial drop in production due to lower prices and a significant number of farmers abandoning the industry for jobs elsewhere, as they struggle with high production costs and little money to show for it. Can government subsidies save the sugar and rice industries.
JAGDEO ADDING MORE DANGER TO GUYANA AND THE REGION
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