Dear Editor,
AN opinion poll conducted by this writer for NACTA late last month, revealed that the cost of living is the leading problem facing the nation with the bulk of the population crying for relief from ever-rising prices of basic goods and even transport services. They expressed appreciation for the assistance provided over the last 22 months, but they urge the government to take interventionist measures to lower or cushion the cost of living, including further tax relief and higher wages.

The government has responded to public appeals with reductions in various taxes and in giving out subventions to food producers (farmers) and grants to the poorer sections of society. Prices are determined by market forces. The government has done virtually everything it can to address rising prices, short of levying price controls as the Burnham dictatorship did during the 1970s and 1980s. Some of the causes of inflation are beyond the control of the government.

Almost everyone in the opinion survey stated that inflation or the rising cost of living or sudden increase in the prices of goods and services is the number one problem facing the nation. It is indisputable that prices have been going up and consumers or families have been feeling the pressure, as household incomes have not gone up commensurately.

The public has been crying aloud about rising prices since the May flood of 2021. The poor or those unemployed or those who lost their jobs during the coalition’s tenure or the COVID-19 pandemic, or those on fixed incomes (such as retirees or NIS recipients) have been affected such as most. The government recognised the pains of the public and took interventionist measures such as giving cash grants, increasing the number of items that are VAT-free, and lowering taxes (including VAT) to make more money available to consumers. Last year and earlier this year, government announced a series of changes to the duty-tax structure levied on imports (using the previous transportation costs) to keep prices down on essential commodities.

Government also gave grants to farmers who suffered losses from the flood of May 2021. It gave an education and school uniform grant and several other grants to households and those on fixed incomes. It helped hinterland people with an additional transfer of $25k for each family.  Also, it removed the fuel tax to shield consumers from rising prices in the fight against rising inflation.  Rising fuel costs result in higher costs for all goods and services.

Government measures have helped to stabilise the upward trend in prices. But a sharp spike in prices of fruits and vegetables and ground provisions – key ingredients in every kitchen – will keep inflation elevated. Crop yields are rising with government assistance and hard work of farmers but high transportation costs attributed to fuel price increases keep prices for foods high.
Middle men also drive prices up – purchasing produce directly from the farmers and putting a high markup especially in markets far from the farms.

The public is calling for more assistance to address the cost of living. There is only so much the government can do. Imported items have gone up considerably – but government has no control over it. Government can’t lower production costs in other countries for basic goods or for international transport. It cannot direct sellers at what price to sell to consumers. Prices have gone up in Guyana primarily because of international transport costs; the pandemic; the Russia- Ukraine war; natural disasters; rising fuel prices and bottlenecks in the movement of goods, among other causes.

Fuel prices are determined by the international market and there is growing demand for fuel, thereby driving up prices. The war does not make it easy for a developing country such as Guyana. Wheat prices have gone up because Russia and Ukraine were the largest exporters of wheat, the sales of which have been blocked; the latter is also among the largest exporter of Sunflower cooking oil. Neighbouring Belarus is the largest exporter of fertilizer, the price of which has gone up because the country is affected by sanctions resulting in higher prices for fertilises in Guyana.

Government responds positively with relief anytime prices go up. The government is providing fertilisers to farmers to reduce costs of food production which should bring down the costs of rice, fruits, and vegetables in the near-term. The working class appreciates all the help from the government but seeks further relief such as an increase in wages to cope with inflation and consideration for a month’s tax-free incomes, as well as an increase in the minimum wage.

Yours sincerely,
Dr Vishnu Bisram