THE cost of living in Guyana, and, for that matter the world at large, has been adversely affected by the crisis in Ukraine, which is now in its fourth week. Among the items affected the most are the cost of fuel, grains, fertilisers and animal feed. These costs are invariably passed down to consumers by way of higher prices.

Thankfully, there is no increase in minibus fares, due to the subsidies granted by the PPP/C administration on the full market cost of imported fuel.  And, according to the President of the United Minibus Association Eon Andrews, the increase in fuel price is not something isolated to Guyana. “You cannot just be selfish and think to increase fares,” he reasoned.

The most recent surge in food prices is due to disruption of the supply chain from Russia and Ukraine, which, together, supply around 30 per cent of the world’s wheat.

The increase in the prices of basic food items have affected all countries, but it is the poorer countries that invariably suffer the most. The price of bread has increased significantly recently on the local market; the same is also true for the price of fuel.

President Dr. Mohamed Irfaan Ali has indicated that this increase in the cost of living is likely to affect the Guyanese people who, he said, should brace themselves for further increases.

According to President Ali: “What we are doing today is presenting you with the facts; with reality; with what the government is doing to address the issues that are global in nature. How we are defining policies to address these issues; the impact global challenges is having on our economy, and the way government is addressing those challenges.”

The fact is that we live today in what is described as a global village. Owing to advances in communication and information technologies, no country could insulate itself from what is taking place in the world. The world is becoming much smaller and inter-connected, and, as the experience of the COVID-19 pandemic has so starkly reminded us, no individual is safe unless everyone is safe.

It is important that we understand the dialectics of our time, and the fact that we do not live in an isolated environment, but that we are an integral part of the global community. No other pandemic has resulted in such disruption in the supply chain as the COVID-19 pandemic has done, resulting in higher prices for food supplies, fuel and construction materials. And just when the world was beginning to breathe a sigh of relief that the worst days of the pandemic are behind us, we are now confronted with the war in Ukraine, which has already impacted, in a big way, on the cost of living in several countries, including those in the developed world.

Fortunately for us in Guyana, we have a government that is very responsive to the impact of exogenous factors on the standard of living of the Guyanese people. The PPP/C administration has already commenced consultations to examine ways to address the rising cost of food items, and a sum of $5 billion has been set aside in Budget 2022 to mitigate the effects of rising food prices caused by the pandemic.

With the Russian invasion of Ukraine, and its debilitating effects on food production and energy supplies, the need to continue the search for ways to reduce the impact of rising food prices will be intensified. According to President Ali, his administration has been keeping an eye on the rising cost of fuel, and they are cognisant of the impact it could have on consumer items.

“That affects everything. Cost of fertiliser, cost of shipping, input cost of 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,” the President noted.

One way of reducing the prices of food items and consumer items, as observed by the President, is by way of bulk purchasing, which means, in effect, that freight charges will spread over a much larger volume of imported commodities. This is another way of saying that we have to explore ways of benefitting from economies of scale. One difficulty with that is the fact that we do not have, at the moment, adequate deep-water port facilities to accommodate bigger cargo vessels.

President Ali and his PPP/C administration must be commended for being honest with the Guyanese people on the real reasons for the increased cost of some food items on the local market, and, even more importantly, on coming up with strategies to cushion the effects of such increases.

As the President puts it: “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 ends.”

There will always be elements who, for political reasons, would seek to put the blame on the PPP/C administration for the increases, but Guyanese are much sharper and objective in their understanding of the situation than the political opposition may want to give them credit for.