The growth in consumer spending in Guyana has literally ground to a halt for the working class shoppers. Too many people have told me that they have shifted gear into survival mode; buying only essential products, and in smaller portions.
It would be an interesting study for the Private Sector Commission, in collaboration with the many regional chambers of commerce, to establish what is the exact situation with respect to retail sales within their membership over the last 12 months. It would be important information to support them in their negotiations with the Minister of Finance on the 2018 Budget.
Some business people told me that their retail sales are down by some 20-25% over the last 12 months. If these numbers are accurate, it is a telling assessment. Although there was a drop in the VAT rate in the 2017 Budget — from 16% to 14% — the expected impact on retail sales seems to have been muted. People are now forced to spend that money on paying a new set of taxes, like the 14% VAT on electricity and water. It is a win/lose situation for the people.
But, to compound the pressure on the consumers, there is the situation of the falling value of the Guyana dollar (now easily accessible at G$230 to US$1 at most non-bank Cambios) over the last six (6) months. This situation is pushing up the cost of imports, and further causing prices in the shops to rise faster than income. The latest official figures out of the Ministry of Finance showed that 12-month inflation rate was 3 percent in February 2017, compared to a decline of 0.2 percent over the same period a year ago. This higher inflation is not a surprise for the shoppers, because people have been recognizing the actual squeeze on their pockets for months now. Almost every single item in the markets has gone up materially in the last 12 months.
A few weeks ago, I did a column which also illustrated that activities in the car sales market were down materially over 2016, with new vehicles registered over 2016 declining by some 8%, according to the statistics released. The most painful statistics to date is food inflation, which has gone since 2015. But of most concern is the state of the prices for the poor man’s food; it has gone – UP, UP, UP!
As the graph above — sourced from the Bank of Guyana’s Annual Reports — reveals, the domestic basket of foods increased by 4.2% over 2016, and it was driven mainly by a 20% increase in vegetables. But if one were to read the 2017 first Quarter Report from the Bank of Guyana, this domestic basket of food increased by 6.5% between March 2016 and March 2017.
This trend is horrible news for the poor and the working class, but yet this Granger Administration seems clueless at fixing this mess. On top of that, this very same Granger Administration added much salt to the wounds of the working class by sending home some 1,700 Wales Estate sugar workers without their severance pay. I have been told that in the Wales/Patentia area, neighbours are now stealing anything left around from the neighbours’ yards (as little as soap) as they switch into survival mode. This is yet but another example of how the Granger government, by its inaction, has contributed to men with a job and some dignity now being condemned to a life of barbarism.
Soon some 10,000 other sugar workers will face the same fate, because the Granger Administration cannot think strategically and outside of the box. It is time for GAWU to kick their mobilisation into full gear, because the time for talking is over. This government must be made to listen to the voice of reason, just like Theresa May was made to listen.
If GAWU fails to act, then this Granger sugar plan will cause a socio-economic implosion across the sugar belt, resulting in consumer spending nose-diving, and that will hurt all in the pocket; race will not matter, religion will not matter, and gender will not matter.
It would be interesting to observe what the regional private sector bodies would do going forward, since this is not the time for passivity and cowardice, because the incoming economic crisis will hurt the private sector the most. It is time for the voice of reason to be heard.
