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There has been much criticism of the Guyana government’s announcement at Skeldon (10/5/21) to grant each dismissed sugar worker a one-time sum of $(G) 250 000 as compensation for loss of income (weekly household incomes had fallen sharply by 64 per cent [ILO:2021]) and the non-payment of wage increases and production bonus for 5 years (2015-19) by the previous administration. Failure to get wage increases alone, according to GAWU union, has “resulted in sugar workers taking home $(G) 24,000 less per month between 2014 and 2017.”
This situation sharply worsened when the PNCR coalition also failed to provide alternative jobs and training to retool dismissed workers, as they had promised. “The [coalition] government had pledged to unveil a diversification plan to ensure continued employment for [sugar] workers being sent home, but no major effort has materialized.” (Abrams: 12/17/17).
Fearing the social upheaval and dislocation that this massive dismissal of workers (7,000) would create on the lives and livelihood of workers and the blithe (economic dead zones) it would create on sugar estate communities, the PPPC’s call for restraint and for the conduct of a social impact study before imposition of closure, was rejected by the PNCR government.
The ILO’s social impact study notes: “workers found it difficult to obtain new employment. Many of those who did find new jobs were employed on a part-time or seasonal basis. The highest continuing unemployment rates.... occurred at the Wales and East Demerara estates, at 60 per cent and 55 per cent, respectively.” The ILO study paints a very dark picture on the social fabric of those communities that have been reeling from an 80% increase in alcohol consumption; a similar increase in crimes; and a rise in suicides.
Responding to the tardy approach adopted by the PNCR administration, PPPC’s General Secretary, Dr Bharrat Jagdeo, delivered this promise to sugar workers at a meeting (12/16/2017) in Canefield and Reliance, East Canje, Berbice. “When we take back office, I am making a pledge on behalf of the PPP that every single person who has been terminated, that outside of their severance, they will get support from the budget until we can find places for them, they will get monthly payments,” (R Abrams: 12/17/2017). The PPPC government will not make monthly payments but provide instead a one-time sum of $(G) 250,000 to each dismissed worker at a total cost of $(G) 1.8 billion or 0.4% of the budget. It should be noted that when the PPPC made this announcement in 2017 and at election campaigns, no one contested this initiative. .
Within 4 years, the sugar industry would break even
While a few critics inject subsidies to bolster their position, that is not a central element to the proposed one-time grant to sugar workers. It is noted, however, that spending $(G)6 billion per annum could generate over $(G)24 billion in economic activity (multiplier effect). One should also never forget that when other sectors of the economy were struggling during the 70s, 80s, and 90s, it was the $(G) 92+ billion sugar levy that were diverted from re-investment in the sugar industry to stabilize those faltering sectors.
Notwithstanding, the PPPC government expects that within 4 years the sugar industry would be able to break even and then proceed to make profits. To spend 2% of the country’s annual budget for the next 4 years to save an industry that has been the engine for the country’s economic growth for decades as well as providing the direct livelihood of over 30,000 persons, is good public policy.
Context and perspective for any policy decision are crucial. Drawing conclusion by comparing uneven and different situations is risky and premature. For example, the bauxite operations at Kwakwani that came to a halt cannot be compared with the closure of the 4 sugar estates. The scenarios are completely different. The Kwakwani operations, owned and operated by a private company BCGI (a subsidiary of Rusal), was forced to close because on an ongoing industrial dispute. Observers attribute blame to both the company and the Union for the lack of a settlement. Pending the dispute resolution, the company and the union should jointly render relief to the workers. It was the coalition government that intervened and made a one-time payment totaling $(G) 30 million to the workers (in 2020). That works out to $(G)329,670 per capita. The PPPC did not object to this.
Regarding sugar, it was the PNCR coalition government that forced the closure of the 4 sugar estates claiming continuous economic loss, despite the government’s own COI recommending a 3-year turn-around time. Neither sugar workers nor their union caused the closure of the sugar estates.
In its 2015 election campaign, the PNCR coalition stated that they would offer sugar workers a 20% pay increase if they won the elections. Had the coalition decided to pay just 1/3 of their 20% promise, sugar workers’ average pay increase per annum would have been $(G)26,130 or $(G) $(G)130,650 for 5 years. The lawful bonus that was denied for years would have amounted to $(G) 32,500 per annum or (G) 162,500 for 5 years. At a minimal level, bonus and wage increase would have amounted to $(G) 293,150. The grant of $(G) 250,000 to each dismissed worker is therefore reasonable. All categories of government workers received wage increases, except sugar workers who were denied this for 5 years. The award is also the fulfillment of a PPPC campaign promise.
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