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‘Hostile market forces’ to blame for rising cost of living

by Barbados Today
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Prime Minister Mia Mottley is predicting heightened economic activity and increased employment in the very near future. These, she believes, will rescue Barbadians from the ravages of financial depression blamed on the COVID-19 pandemic.

But on the other hand, the PM, who also serves as Minister of Finance and Economic, is warning that sporadic spikes in the cost of living may be outside the control of her administration and the local business community.

Addressing the Global Townhall Meeting for Barbadians Living in the Diaspora, Mottley revealed there has been nearly 40 weeks of foreign reserve import cover that has allowed her Government to “support economic activity without worrying”. According to the PM, this positive outlook has now been bolstered with long-delayed projects that are about to commence. She did not name the projects.

“The bottom-line is that based on what I am seeing coming across Town Planning, based on what I am seeing in terms of people clearing grounds, I expect that we are in a position to see heightened economic activity and by extension, jobs that will make a major difference to the lives of Barbadians who have been suffering from COVID during the course of the last 21, 22 months,” declared Mottley.

“With respect to the reserves, I’ll simply say that I expect the ratings agencies will put out a report within the next 24 hours and like most things, I’ll wait for them to speak because sometimes it is better for people to have an independent judgement than a judgement from us, because as we know, self praise is no praise,” the PM added.

It’s some good news ahead of the republic transition that has thus far fail to attract the levels of excitement typically associated with similar momentous occasions, as unemployment remains north of 16 percent, COVID 19 cases soar and the tourism sector remains relatively dormant

On a more sobering note, Mottley admitted that after ongoing talks with local businesses, that continued as recently as Monday, there has been no resolution to the rising cost of living dilemma that is placing additional pressure on working and middle-class households.

Blaming the hostile market forces, Mottley noted that massive increases in transport and freight costs are even more cumbersome on import-dependent small island developing states like Barbados.

“We are meeting again on the first of December, but we understand that this will not be an easy thing to wrestle to the ground and we have said there is a difference between imported inflation and those things that are within our capacity domestically to control. We are trying to do that in a way that makes sense,” Mottley promised.

“We are looking at a number of options, but let us appreciate the world is in a very uncertain place and we have been talking to the country about it, because as I said [on Tuesday], nobody owes us a living and unless we get on top of this and on top of these issues with speed, we are going to find that we will become victims beyond our capacity to recover.

“We believe that the best time to be able to address many of these issues and the best time to be able to build out is in fact in the middle of this uncertainty, as difficult and as uncomfortable as it may sound for some, because when it finishes, it means we have the increased capacity to be able to benefit once the world starts to level back,” the PM added.

The Minister of Economic Affairs was responding to queries from members of the diaspora about the stability of the country’s economy and the cost of doing business as a deterrent to outside investment.

On the issues, Minister of Energy, Small Business and Entrepreneurship, Kerrie Symmonds lauded “unprecedented” work done by the administration including wide-scale public-sector digitisation for improving the country’s investment climate.

Harping on the high cost of living, he noted that it is a global problem tied to the pandemic that continues to affect virtually every commodity.

“I am sitting here across from the Comptroller of Customs who would tell you an empty container coming out of Asia, which in 2019 was sourced at $3,000, in 2021 is costing us over US$20,000 and that is before you put anything in it,” explained Symmonds.

“There has been a substantial surge in prices, we see it in the United States. Quite frankly, in my sector, in the energy sector, major issues involving natural gas partners that we had, who would help give us certainty of supply tell us frankly out of China, that the demand out of Europe is so high and the prices they are willing to pay are so much higher that we could do far better [trading] elsewhere,” the minister added.
kareemsmith@barbadostoday.bb

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