By NEIL HARTNELL
Tribune Business Editor
Abaco’s Chamber of Commerce president yesterday said The Bahamas and whole world are entering “a pretty scary time”, adding that the island was “just waiting for the other shoe to drop” when it came to further price hikes.
Ken Hutton told Tribune Business that while the cost of living, although much higher than 12 months ago and earlier this year, appeared to have stabilised in recent weeks this was likely to be a temporary experience. Based on international developments, he added that it was likely a situation of “when, not if” further inflationary pressures hit the island and wider Bahamas.
Urging all residents to brace for the impact, he voiced concern that the cost of living crisis would not become so severe that Bahamians had to choose between paying for food, medicine, the electricity bill or sending their children to school.
Speaking after a Cat Island entrepreneur last week disclosed that Romaine lettuce was priced at $15 in one of the island’s grocery stores, Mr Hutton told this newspaper: “Prices have definitely stabilised for the moment, even though they are still much higher than they were this time last year or even in January. Gas and diesel are the same prices they were last week.”
The latter, though, is likely to be fleeting as newspaper advertisements showed that Rubis Bahamas has been approved to increase gasoline prices on Abaco to $6.86 per gallon -a figure that does not include ocean freight costs. Acknowledging this, Mr Hutton said: “The operative term is just waiting for the other shoe to drop because, based on the news we’re seeing, the price spikes are coming.
“It’s not a matter of if, but when and how much. We’re bracing for it, and hoping it’s not too severe so people have to decide between sending their children to school, buying food, paying the electricity bill or paying for medicine. We’re entering a pretty scary time. I don’t think it’s just Abaco. I think globally we’re in for some pretty scary times. We may be an island, but we’re not an island alone.
“We’re dependent on the world economy, and if that goes pear shaped we come into a world of hurt very quickly. Being beaten up by Dorian, we understand a lot better than many people the necessity of being prepared.”
With surging inflation sparked by over-heating in the world’s major economies, coupled with supply chain disruption caused by COVID-19’s legacy and the fall-out from Russia’s war with Ukraine, Mr Hutton said himself and the Abaco Chamber had for months been urging residents to stock up by spending a little extra every time they went to the grocery store to mitigate or delay the impact of price hikes.
And, with the Government due to present its annual Budget in the House of Assembly tomorrow, the Abaco Chamber chief renewed his oft-repeated pleas for the Government to extend in full the Dorian-related tax breaks for his island and Grand Bahama for a further one-two years “at least”.
“We would love to see the SERZ (Special Economic Recovery Zone) concessions extended in full,” he told Tribune Business. “We’re still struggling and challenged with the lack of clarity on the SERZ as it is extended now, and we cannot get clarification from the Government. Some things are duty and VAT free, some things are not, and there is no comprehensive list of what is duty free and what is not.
“There is no clarification, no publication. It’s very confusing. We’re trying to run a business and rebuild the island here. We need some kind of certainty, some kind of clarity and we’re not getting it. We want the SERZ to be extended in its totality for at least another year or two.
“If you want to see a New Day, you will definitely see it in Abaco. All we’re requesting is the tools we need to get our island and communities back up and running, and the SERZ is a critical tool.”
The Davis administration, though, has been seeking to roll-back and contain Dorian recovery-related tax breaks in the belief that it is giving too much away, especially to wealthy second homeowners (many of them foreign) that it believes can afford to rebuild without taxpayer assistance.
Mr Hutton, in a previous letter to government officials, argued: “The declared purpose of the SERZ concessions from the beginning was two-fold: To encourage rebuilding and incentivise the local economy back to growth. Abaco was initially told SERZ would be in place for three years, which all agreed would have been sufficient time to get the economy back on its feet and on its way to growth again.
“The arrival of COVID resulted in critical delays to that recovery and threw the process back by at least a year or more. Add to that, Abaco is now being affected by historic inflation and global supply chain issues causing rebuilding to be not only more expensive but also more prolonged. The impression in Nassau that some underserving people are benefiting from SERZ more than others is based on jealousy and ignorance of the facts on the ground.
“We need the concessions to continue unaltered for at least two more years. We are nowhere close to having a robust economy. People are struggling just to get by. Delays, unannounced changes and reductions to SERZ not only add an unnecessary level of uncertainty, but increase an already heightened level of mistrust and resentment of the Government caused by the former administration’s gross mismanagement of the Abaco disaster response.”