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—Forde says Guyanese limited disposable income severely affected by high cost of living
A Partnership for National Unity + Alliance For Change (APNU+AFC) Member of Parliament, Roysdale Forde, S.C said the Government’s poor management of the economy has resulted in a significant rise in cost of living as confirmed by the Bureau of Statistics, which reported a 14% increase in food prices on the local market.
In September, Forde, a Senior Counsel, had projected that there was a 6% increase in food prices in Guyana, however, a Consumer Price Index (CPI) released by the Bureau of Statistics, revealed that the increase is significantly higher.
Based on the Consumer Price Index released in July, 2021, between December 2020 and July 2021, the price of food increased by 14%. Costs associated with Transportation and Communication also increased by 1.8%. According to the monthly report, miscellaneous goods and services also increased by 2%.
“Prices data are collected from various sources on a rigid and systematic time schedule both weekly and monthly. A data collection questionnaire is used to collect prices from various Municipal Markets, Gas Stations, Supermarkets, Stores and Other Outlets,” the Bureau of Statistics explained on its website.
The APNU+AFC Parliamentarian said the CPI report confirmed that the cost of living in Guyana has skyrocketed since the change in Administration in 2020. “It indicates that the PPP is incapable of reducing the cost of living,” MP Forde posited.
With no increase in wages and salaries for public servants over the last two years, MP Forde said the country’s working class continues to suffer.
“The working people of Guyana are suffering. The government has failed to give any salary increase to public servants for over 2 years. And now, they are seeing their salaries gobbled up by increased prices,” the MP said.
He added: “Disposable income which is already limited…[is] also severely affected by the increased cost of living.”
Amid the rise in cost of living, Finance Minister, Dr. Ashni Singh, last week, announced a reduction in Excise Tax on gasoline and diesel. The price for gasoline is expected to reduce from $213 to $198 per litre, while the price of diesel is expected to reduce from $200 to $185 per litre.
Renowned Guyanese Economist, Dr. Clive Thomas said while the increase in food prices is not unique to Guyana, the Government can do much more to bring down the price of food as well as the costs associated with other goods and services.
During his appearance on Politics 101 – a virtual programme hosted by Political Scientist, Dr. David Hinds – Dr. Thomas said food prices have increased globally as a result of the ongoing Coronavirus (COVID-19) pandemic. Here in Guyana, Dr. Thomas said the situation has been compounded by unprecedented floods which devastated agricultural areas throughout the country.
It was explained that the torrential rains, which resulted in widespread flooding, have disrupted the supply chain and triggered an increased in food prices. It was noted that during the early stages of the COVID-19 pandemic, Emergency Measures instituted had resulted in industries grinding to a halt. The labour force, he said, was severely affected as well as the Transportation Sector.
He said while the pandemic and extreme weather conditions are not unique to Guyana, the Government should have put a number of systems in place to bring down food prices in the local markets. It was pointed out that some Farm-to-Market Roads are in desperate need of repairs while some agricultural areas require Drainage and Irrigation Systems in place to minimize the possibility of floods.
Weighing in on the issue on “In the Ring,” former Minister of Finance, Winston Jordan said while the ongoing COVID-19 pandemic and the torrential rains have influenced supply and demand, policies implemented by the Government have also contributed to the increase.
“You will continue to hear things tight unless the government changes the backward policies that it has in place that seems to penalize the working class in this country,” Jordan told host of ‘In the Ring’ Sherod Duncan – an Opposition Member of Parliament.
Jordan said the Government, in relying on “trickle-down economics, continues to invest heavily in the Private Sector while leaving the working class out in the cold. In ‘trickle-down economics, the Government reduces taxes on businesses with the hope the benefits would be felt by the working class.
14% GROWTH IN THE ECONOMY
But notwithstanding the increase in cost of living, Guyana’s economy, according to the Bank of Guyana, has grown by 14.5% during the first half of 2021.
According to the report, real oil GDP grew by 14.5%t while non-oil GDP grew by 4.8%. “Improved
performances were recorded in the construction, petroleum & gas and support services, manufacturing and the service sectors while the agriculture sector recorded reduced output due to unprecedented flooding in May and June,” a section of the report read.
But Jordan said the economy should have grown must more. He said in the absence of oil production in 2019, the country, during the first half of the year, recorded a 4.2% increase. It was pointed out that in 2020, the economy contracted by -4.9% as a result of the 2020 General and Regional Elections and measures implemented to suppress the spread of the virus.
“Businesses had shut down, and in fact the measures that we had put in place had curtailed businesses,” Jordan posited.
But that aside, Jordan said the half- year report, when analyzed indicates that the country is gradually relying on the Oil and Gas Industry. He said from all indication, the Oil and Gas Sector appears to have dominated the economy.
“It is dominating exports, it is dominating local production, it is dominating financial flows, it is dominating financial investments and it is only one year, and it is only one FPSO,” Jordan posited.
According to the report, the Agriculture Sector’s output declined at a slower rate of 2.4% relative to a 4.1 percent contradiction at the end- of June, 2020. The rice industry’s output grew by 7.8 percent during the review period.