Sugar sectorExpressing suspicion as to how the Government has used the billions it allocated to the Guyana Sugar Corporation (GuySuCo) since taking office in 2015, the People’s Progressive Party (PPP) is calling for a probe to be launched into how these monies were spent.Articulating the Party’s position on the matter during a Friday morning press conference was PPP General Secretary Bharrat Jagdeo. According to Jagdeo, there are discrepancies between the figures quoted by President David Granger in his January 10 speech and Agriculture Minister Noel Holder.Former President Bharrat JagdeoJagdeo quoted verbatim from Granger’s speech, in which the President pointed out that “a new factory at Skeldon in the East Berbice-Corentyne region was built at a cost of US$212 million and $48 billion was expended in financial support to the industry since 2011, while $32 billion was spent over the past 30 months, which when calculated sums up to a rate of about $1 billion a month. This Government cannot sustain the sugar industry in its current state. It has had to make difficult choices in order to ensure the industry’s viability.”The PPP General Secretary noted that the figure quoted in Granger’s speech was divided by the number of months. Jagdeo, an economist by training, observed that this was how the figure of a billion a month was arrived at. According to Jagdeo, however, this does not add up and there is a clear contradiction between the President and his Agriculture Minister.“Holder said over the past seven years, Government pumped $48 billion in GuySuCo. $600 million in 2011; $4 billion in 2012; $5.3 billion in 2013; $6 billion in 2014; $12 billion in 2015; $11 billion in 2016; and $9 billion in 2017,” Jagdeo stated, quoting the Minister. “So when you add this, you see $48 billion over seven years. (But Granger) added $32 billion on top of it in his speech. Then he divided by the number of months and that’s how he came up with $1 billion a month. He over inflated the figures by two times in his speech to the nation. And Holder gave the accurate figures.”Agriculture Minister Noel Holder“Even in those figures, you would see that the period 2011 to 2014, an average of $4 billion a year was given in subsidy to GuySuCo. Between 2015 to 2017, $10.6 billion average. And that is impossible. It’s more than double the subsidy in just three years. We need to have a full-fledged investigation into whether this money was given, how it was spent. And knowing the nature of this Government, I suspect a significant portion of this money may have disappeared. And if they were so good at management, the figure should have deteriorated.”Government had announced that it will pay 50 per cent of the severance benefits to dismissed sugar workers by the end of this month. This commitment represents over $2 billion in severance payments, with a paper seeking to appropriate supplementary funds being laid and debated in the House.It was during this announcement that President Granger in a speech read by the Prime Minister spoke of $48 billion being spent since 2011 on the industry. Jagdeo expressed the belief, however, that the incorrect figures were no mere mistake.“Now when Guyanese hear this figure (from the President), they will say yes it can’t be afforded because it is a large sum of money. So that is what I believe it was designed to do, to say that we can’t afford to keep the sugar industry alive,” he stated.Soon after coming to office, the coalition Government doubled the subsidy to GuySuco to $12 billion. Nine billion dollars was also budgeted for early in the year, with a further $2 billion after the Corporation approached the Government requesting approximately $3.5 billion.A further $9 billion was approved in 2017 for GuySuCo, with Finance Minister Winston Jordan announcing that If Government adhered to the requests for specific monies for GuySuCo, it would be money wasted.In May 2017, Government announced plans to close the Enmore and Rose Hall Sugar Estates, sell the Skeldon Sugar Factory, reduce the annual production of sugar, and take on the responsibility of managing the drainage and irrigation services offered by GuySuCo.
Coming out of the 37th Caricom Heads of Government Meeting held earlier this week in Guyana, regional Leaders have decided to lobby the United States Government to intervene and stop the country’s banks, which have been ending corresponding relations with indigenous banks in the Caribbean over money laundering concerns.During the final leg of the Caricom caucus, Jamaican Prime Minister Andrew Holness updated the meeting on discussions over the two days. He noted that the issue of correspondent banking has affected all the countries in the Region.In this regard, the Jamaican PM declared that the Conference has come to an agreement to lobby the US Government on the matter: “We have advanced on this matter in terms of agreeing that we should seek to lobby directly to the US Government.”Additionally, the Jamaica Leader outlined that member States also resolved to increase their voices in various international forums, as well as to enlist the support of friendly countries on their behalf.According to Holness, the issue has the potential of seeing the Caribbean being locked out from the international financial system if it is not addressed immediately. Nevertheless, the Prime Minister stated that steps are afoot to ensure that member States are compliant with the relevant Anti-Money Laundering (AML) laws in order to avoid de-risking.“We feel that we are taking the necessary steps to comply – all countries are moving apace with compliance and internally, we have encouraged each other to, as quickly as possible, meet the compliance requirements,” he remarked.However, the Jamaica PM noted that at the same time, it should be recognised that there are those countries that are in compliance and should therefore be rewarded for facing the threat of a correspondent bank pulling out its services.Moreover, when asked, Holness opted not to provide a figure as to how many corresponding banks have cut ties with the Region but stressed that several banks have pulled out from various countries across the Caribbean.The Jamaica Leader went on to highlight the issue is not only about the ending of correspondent banking relations but also the threat of it and the uncertainty it adds to financial transactions in the Region.“Certainly, in Jamaica we know of at least one case where we have lost a correspondent bank and the burden it imposes, the uncertainty. But we are doing everything to move apace with compliance and Jamaica would be amongst those countries that have complied at this stage,” he remarked.Caricom’s final decision to lobby the US Government comes on the heels of St Lucian Prime Minister Allen Chastanet cautioning that such a move would be fruitless; instead, they should seek help of US companies and individuals with ties to the region.According to the St Lucian Prime Minister, the region must stop thinking that it has to solve this problem alone. He pointed out that there are a number of multinational companies in the US such as airlines, cruise industries, suppliers and individuals who own their homes – who have a vested interests in the region and who know exactly how to lobby their government.“The idea of us going to Washington DC by ourselves is a tried and tested failure. We must be able to bring more people to the argument and we must do it urgently,” Chastanet stated in his presentation at the opening of the Heads of Government Conference on Monday.Foreign Banks, particularly those in the US, have been withdrawing from their relationships with indigenous Caribbean banks because of fears of money laundering and questionable sources of funds, which would cause them to receive heavy fines from regulators.However, the Caribbean banking institutions rely on such relationships in order to allow residents to conduct international financial transactions. Since last year the Region has been facing the impact of de-risking and the issue has been occupying the attention of Regional policy-makers, following signals by international banks that they are unwilling to continue carrying the business of regional banks.This situation is called de-risking and poses dire consequences for the region including crushing impacts on the wider economy.De-risking in the Caribbean came into the limelight last year when the Belize Bank was cut off by the Bank of America and one of the two banks in Montserrat experienced the same fate. In addition, the Governor of the Bank of Guyana, Dr Gobind Ganga, just recently confirmed that the Bank of America has also ended its correspondent banking relations with Guyana about a month ago.However, Dr Ganga assured that there is no need to panic since Guyana is already in talks with other overseas banks that are interested in offering correspondent banking services to local financial institutions.Some of the areas that affected because of de-risking are: transfers of remittances, cheque payments, international trade, and the facilitation of credit card settlements for local clients.The Caribbean Development Bank quoted a November World Bank survey as saying that about 75 per cent of international banks have experienced a reduction in correspondent banking services, with the Caribbean being the worst affected.