By Vishani Ragobeer
Consumers have been grappling with the rising costs of food, fuel and other goods over the past few months.
Amid this seemingly unavoidable surge, Muriel Tinnis- Duke, the Director of the Department of Consumer Affairs, within the Ministry of Tourism, Industry and Commerce, has advised all consumers to spend wisely.
“You know this is a time when we will tell you that you have to spend wisely- you buy the things that you need and not what you want.
“We don’t have control over the rising prices,” Tinnis- Duke told the News Room on Thursday at the sidelines of an event.
These increasing prices are linked to challenges from the COVID-19 pandemic and more recently, the Ukraine-Russia crisis. With Guyana importing goods, and the necessary inputs such as fuel and fertilisers to produce goods locally, the global economic challenges are manifesting in higher prices.
Consequently, the average consumer now pays more money for goods compared to their purchases from just a few weeks ago.
Take Roxanne Adams McKenzie, a mauby vendor and a retired teacher, for example. On Thursday, she told the News Room that she has been forced to cut back on the variety of foods she consumes because food prices are simply too costly.
As a small business owner, she is grappling with the increased cost of the food items – be it sugar or essence – needed to make her mauby.
“When I went to the market, the young lady tell me, ‘Teach, you know you gah pay $12,000 now for the sugar.’
“I go around the corner to the other boy and he tell me, ‘Miss, I can’t deh giving you a cut. You gah pay $1,200 for the (bottle of) essence’,” McKenzie related.
INCREASED PRICES
The News Room visited several supermarkets and small grocery shops around Georgetown on Thursday and verified that the prices of food items has indeed been increasing.
A few weeks ago, a one kilogram pack of all-purpose flour cost about $240. Now, depending on where you shop, the cost of that pack of flour has increased to $320 or even as far as $460.
Four kilograms of parboiled rice, which once cost about $540, now carries a cost between $845 to $1,000 – again, depending on where you shop.
Guyana does not have price controls, which are government regulations on the maximum price to be charged for goods and services, especially during periods of surging prices.
Tinnis- Duke explained that Guyana has a “free market” which allows for competitive pricing.
Therefore, when producers and sellers increase the cost of goods sold, she said those prices cannot necessarily be controlled by the government.
She, however, emphasised that consumers have to exercise their right to choose – whether they want to purchase certain products from some sellers who might have lower prices compared to others.
“That is in your right and that is what you should do,” Tinnis- Duke said.
Another suggestion to counter this issue was given by representative for the Food and Agriculture Organization (FAO) Dr. Gillian Smith, earlier this year.
She suggested that consumers seek alternative food items to the expensive ones. Like Tinnis- Duke, Smith explained that the rise in prices are due to external factors.
INTERNATIONAL CONTEXT
Local economist Richard Rambarran, during a recent interview with the News Room, explained that small countries like Guyana, which do not have the manufacturing or industrial prowess to determine the price of goods internationally, are adversely impacted by these international occurrences.
“When compared to a developed economy with a mature manufacturing sector and strong industry, we face the unfortunate circumstance of important inflation and being unable to control the factors by which that inflationary condition is set,” Rambarran explained.
Inflation, in simple terms, refers to the increase in the prices for goods and services. With inflation, the same amount of money paid for goods and services at an earlier period will cover the cost of fewer of those goods and services.
Resultantly, goods imported carry higher costs. Because the cost of fuel, fertilisers and other much-needed inputs have increased, goods produced locally would also cost more.
He, however, acknowledged that there are some measures that the government can utilise to provide some relief. One measure he identified is a reduction in the cost of complementary goods.
What this means is that the government can subsidise input costs or provide tax exemptions to allow businesses to produce goods at a lower rate. Because of this, producers would be expected to sell their products at lower costs.
“As you know, a number of the commodities which we consume in our basket on a day to day basis…are imported, and that means that we do have the ability to control the tariffs (and) duties.
“So re-examining the consumer basket, and the tax regime that applies to the consumer basket is something that I think would be useful at this time,” the economist said.
Already, the government has set aside a sum of $5 billion in the 2022 National Budget to fund interventions to cushion the rising food prices.
The government also announced moves to extend the freight cost adjustment in 2021 to the cost of some $6 billion in addition to reducing the price of fuel. These measures are already in effect.
More recently, President Dr. Irfaan Ali announced that the government will absorb the increased rates of water and electricity so consumers will not pay higher rates.
