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July 24 ,2021


Anyone who shops in any of the country’s vibrant markets – from Corriverton to Parika via Bourda – will have witnessed over the past two months astonishing price increases for fruits and vegetables. Here are some examples year on year from the weekly list generated by the Guyana Marketing Corporation: Tomatoes (lb) $180-$200, now $400; Corilla (lb) $100, now $260-$300; Boulanger 3 to 4 for $200, now 3 for $500; Wiri wiri pepper (lb) $100, now $300-$320. Bananas $200 to 240, now $240 to $260; Cassava (lb) $80 -$100, now $140 -160; Beef (lb) $460-$480, now $700- $800. One market vendor told us produce is scarce and what is about is of poor quality. Other household essentials are up such as a 5-gallon cooking oil which has gone from $6500 to $10,000. White rice was $1200 for a 20lb bag, it’s now at $1400. So if you go to the market with $10,000 and you are likely coming home with half what you might have had a year ago.   

Meanwhile fuel prices have also increased. When Minister with responsibility for Finance Ashni Singh announced a cut in the excise tax in February, the Guyana Chronicle wrote that it “was expected gasoline would drop from $184 per litre to $170, and diesel prices from $170 per litre to $160.” Gasoline now stands at over $200 per litre and diesel at $185. Last year President Ali himself had talked of the increases in cement, steel and other construction goods. Anecdotally housing rentals are going up and countless imported consumer products have also increased locally. 

Why is this happening? The cause of the increases in fruits and vegetables prices is unique to Guyana and directly the result of the severe flooding along the coast affecting cash crop farmers. If the weather cooperates supplies and prices should return to normal in a few months. 

The increase in fuel is due to an increase in crude oil prices which have gone from around US$40 per barrel last July to over US$75 earlier this month. This is likely to remain high for the next twelve months as the oil producing group OPEC Plus restrains output of its members in what has been a remarkable run of cooperation and discipline. Guyana has in fact benefited greatly in this regard, with the latest lift of Liza-1 crude getting almost double what it would have last year. But the high fuel price is hurting the pockets of commuters and will not go away anytime soon.

In general commodities prices from metals to wheat have increased dramatically as the world economy returns from a lockdown. Whether this rebound will be sustained is another matter as Covid-19 is utterly unpredictable and seems to mostly surprise to the downside. The rebound has also caused massive delays in the manufacture of goods and also in supply chains to move them. Shipping rates have gone from around US$2000 in 2020 for a 40 ft container from Shanghai to Los Angeles to over US$12,000. Importers are saying this is the main reason for increasing prices for goods locally, while the delays also mean many Guyanese businesses are unable to keep products in stock.

Whatever the multiple causes, the bottom line for the average Guyanese is that they are feeling pinched, and while the more affluent will simply grumble and pay up, the working classes are facing genuine food insecurity.

None of this is the fault of the government but that does not mean they cannot address it in a meaningful and timely way. First off, another round of Covid-19 relief payments should not be the answer. It was a costly and cumbersome exercise that took many months to roll out. Even today people are still to receive cash. There was also some controversy given the restrictive criteria. So what if a few households got double the $25k? The focus should have been on simply getting the money into hands at a time of what the government itself described as a crisis for many poor families.

As for the Because We Care programme it is a good basis for payments as it focuses on schoolchildren but it is also somewhat cumbersome and unnecessarily politicised. It was remarkable to see ministers of the government unzipping suitcases full of cash as part of what the Department of Public Information declared was a “reflection of love for future leaders”! The cost of transporting these ministers and their entourages around the country must be astronomical and is it really the best use of ministers’ and parents’ time? 

There are in fact far simpler, swifter and less costly measures to address the current situation. This might include in the case of fuel, decreasing further (from 35%) the excise tax as part of the stabilisation programme that has been in effect for several years. A reduction (or flat rebate) in GPL tariffs would see immediate household savings.  Ideally the budget could have increased the income tax threshold to $100K per month which for someone earning that same salary would mean an additional $8000 or $96,000 per year extra in their pay packet. It is also high time that the government starts meeting with the public sector unions and negotiates in good faith for multi-year wage increases. After all, it met for six hours with members of the Private Sector Commission last Wednesday. 

And it is not a question of the country being unable to afford such measures. Every government in the world cries poverty when it comes to wages and sometimes it’s true. But it would be a hard case for the current Guyana government to make. In their September 2020 budget they claimed to have put $20B into the pockets of the public through revised tax measures and incentives. The Natural Resource Fund currently holds some US$400M or $84B from oil sales and this will keep piling up even as the government seems to be unsure whether to amend current legislation or go with a different model.

These are not ordinary times. Covid-19 has deeply disfigured the world economy. The damage from the economic slowdown and the subsequent surge in prices has fallen, and is falling, largely on the working classes. Governments are mandated to do whatever it takes to secure their people’s well-being. This government has the wherewithal to significantly address the effects that inflation is now having on all Guyanese. It just needs to find the political maturity. 

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