THE government has commenced consultations to determine what measures will be used to expend the GY$5 billion that was set aside in the 2022 budget to mitigate the effects of the global rising cost of living, caused by the COVID-19 pandemic.

With the Russian invasion of Ukraine expected to exacerbate the rising cost of living across the globe, the spending of the $5 billion will form part of the government’s strategy to address the issue and create initiatives at the import, consumer and market levels.

Since the war began on February 24, the world is already feeling the effects with the rising cost of fuel, transportation and logistics, given several sanctions and restrictions to the use of airspace.

Guyana is not expected to be immune from these economic effects, and on Sunday, during a press conference at State House, President Dr Irfaan Ali faced questions from the press about what the government will be doing to protect Guyanese against these global issues.

In response, the Head of State noted that he has been keeping an eye on the rising cost of fuel, and is cognisant that this will mean a rise of costs in many other areas.

“That affects everything. Cost of fertilizer, cost of shipping, input cost for production, even the cost to take the product to the market, every single thing is affected. So, an already volatile situation is even more critically affected.

“There are a number of things we are doing in Guyana. One is that we set aside $5 billion in the budget for cost-of-living programmes. The consultation has started on that, and two, we have to find a way in terms of economies of scale,” President Ali reasoned.

However, the President noted that Guyana faces the additional, unique issue of low water level in the Demerara River, which will also affect the supply chain, and consequently supply costs.

“One of the other major problem [sic] we have is the draught of the Demerara River. Instead of one 30,000-tonne ship coming in, you can only have 7,000 tonnes, because the draught does not allow the 30,000 tonnes. So, we have an added problem in terms of transportation. With what is happening in Ukraine, logistics issues would even get worst,” Dr Ali posited.

He noted that the government is taking all of this into consideration as it strategises to deal with the situation.

“We are working on a strategy on how we address the import cost and support initiatives at the import level, and then at the consumer level and the market level. So you attack it from all three ends,” he noted.