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Feeling pinch of inflation

EDITOR, The Tribune.

Some months ago, the former US Treasury Secretary Larry Summers predicted the oncoming onslaught of inflation and offered advice on how the US government ought to counter it. However, the Joe Biden led government ignored him and now the chickens are coming home to roost.

Ukraine, I believe produces 40% of the world’s wheat. They are engaged in an ongoing war with Russia. A war I believe Ukraine cannot and will not win. I believe it will drag on for a long time. According to the experts, this has caused the price of gas and food to go north. America’s unemployment rate is around 3.5%. Almost everyone is employed. Yet people are complaining because inflation has eaten away the dollar and it’s not buying what it used to.

We in The Bahamas are feeling the pinch. Food prices are increasing so is the cost of fuel. I was in Super Value Foodstore a few days ago and some of the shelves were empty. This could be as a result of the supply chain stalling and ships can’t get to its destination to deliver products. When one listens to the experts and watched what’s happening around the world, one would be hard pressed to predict “we may have a recession in 2023”.

This is not wishful thinking or pessimism, no, this prediction is based on what has happened in the past, what is happening presently and what is predicted for the future. That is the last thing the middle-class needs. As it is under pressure and has been for the past decade. This will only add more fuel to the already gas-lit fire.

A recession could spell bad news for the newly-elected Philip Brave Davis’ led government. As we are coming out of the COVID pandemic. No, I wish Prime Minister Davis success! However, facts are facts. As he is the Minister of Finance and has his hands on the till. I would advise him to put policies in place to counteract challenges inflation will cause and the rising cost of fuel. The middle-class cannot take anymore dilution.

If this dark cloud of war continues to hover over Russia and Ukraine, we could be in for a long drawn-out barroom brawl. If inflation continues to give the Biden-led government a headache, then investors will begin to take a second look at investments. They will put a pause on plans and reschedule the signing of contracts. No, this isn’t wishful thinking. This is a fact. So now is the time to put plans in place to counteract the oncoming disturbance to our economy.

In conclusion, going forward the challenges for the PM are staring him straight in the eye. And his legacy depends on it. They are as follows:

1) To get inflation under control.

2) To contain the cost of fuel to the best of his government’s ability.

3) To lighten the load on the middle-class.

4) To contain the cost of food to the best of his government’s ability

And finally, number five – to lift up the small man (woman), they ain’t asking for much. They are the ones who put him in the seat. Enable them to feel some of the sweetness too.

On that note, I rest my case!

PAT STRACHAN

Nassau,

June 7, 2022.

Comments

watcher 3 months, 2 weeks ago

A long letter to tell us nothing we don't already know. Mr. Strachan does not say HOW the PM is meant to accomplish the four talking points at the end of his diatribe, but merely points out what every leader of every nation is currently faced with. The Bahamas does not have a magic wand.to wave at these problems.

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LastManStanding 3 months, 2 weeks ago

Why doesn't the government offer a temporary VAT holiday, or reduce tax on gasoline, if the VAT revenue is as high as they are projecting? Having such an import based economy limits what the government can do to a large degree, but they definitely can do more to assist if they wanted to.

Also, backyard farming. The Bahamas will never grow enough food to be self sufficient, but encouraging the growth of simple backyard crops would be a help in making the country a little bit less dependent on imported food. Not a game changer, but it would be a help.

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