Georgetown- Faced with the ever prevailing high cost of production in an effort to compete with world market prices, the local sugar industry may find itself in more heavy financial crisis for the next 2 years. Economist Dr.Clive Thomas stated that GuySuCo’s survival now depends on direct official bailouts, while it unceasingly increases its indebtedness. He said that this quite frankly is unsustainable. He explained that sugar’s contribution to GDP, export earnings, and tax revenue has fallen well behind that of other traditional commodity sectors such as gold, rice, and bauxite, as well as the services sector.
“Large sums directed to Guyana’s sugar industry by the EU have to be seen in the light of the additional massive bailouts provided by the Government of Guyana to GuySuCo in recent years.”
Dr. Thomas said that as worldwide experience has shown, it is hard, politically, for governments to stop providing unwarranted subsidies to state industries. He said, however, that it is far worse for them to yield to those interests that are driving the need for the subsidies.He said that without a restructured GuySuCo, it is impossible to see how the new government could reduce Value Added Tax and pay higher wages to public servants, both of which have the potential to help the economy grow faster and stronger. He said, too, that the new administration also has to take a pragmatic position on the sugar industry.
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