According to the most recent CADRES/Peter Wickham poll, uppermost in the minds of more than 40% Barbadians surveyed is the high cost of living. This ‘revelation’, on the eve of a general election, which the same poll has predicted a 5.5% swing against the government has served to galvanize the government into a frenetic response to ensure that they are re-elected. Anyone in the boots of Prime Minister Owen Arthur would probably respond in the same way. Evenso, the action by the government can be viewed as disingenuous. In recent years Barbadians have been fed rote responses by our ministers in government, including the Prime Minister, that high prices and the resultant high cost of living are linked to movements in the global market, e.g. the rising cost of oil.
To the credit of the government, the initiative led by three of its young brigade: Clyde Mascoll, Lynette Eastmond and Mia Mottley, who in short order, have been able to persuade, coerce, and co-op the co-operation of our captains of industry, to agree to a fixed mark-up on a basket of food stuff, which has been deemed to contain the staples to satisfy the average household. We congratulate the government on this initiative to attempt to control the price of certain foods which are purchased by the average household. We however have to question if the proposed strategy is a sustainable one. The realization that our government maybe threading on ground never trodden before was highlighted on a call-in program earlier this week hosted by Tony Marshall. One of our elusive University of the West Indies lecturers called the program to offer an opinion on another issue; Marshall took the opportunity to ‘ambush’ lecturer Justin Robinson by asking him to comment on the initiative by government to engage the private sector to selectively reduce the price of selected products. Robinson’s response was interesting. He referred to the government’s initiative as ‘collaborative price control’. He further informed the listeners that up to the time of his calling the program, he had not been able to find any similar documented protocol which he could use to offer as a comparison. We don’t have to rehash the many arguments which point to the ineffectiveness of a price control strategy. What are we trying to say? The jury is out on whether this form of collusion between private sector and government will have the desired impact.
Can we describe this initiative as a useless form of price control?
The truth is, we heard Mr. Robinson and we also heard Senator Robin Bynoe who expressed concern that the retailers will have to bare most of the cost associated with this initiative by government. In his opinion, the wholesalers in the current arrangement will not see their revenue stream negatively affected in any significant way when compared to the retailers. Consequently, Senator Bynoe has expressed the hope that government should look at a plan to compensate the retailers. However, Deputy Prime Minister Mia Mottley was quick to indicate that no such concern was tabled at the meeting between government and the private sector so she could not respond to the concern. We are confused by this comment from Mottley. Given the legitimate concern voiced by Senator Bynoe, can we expect that retailers might be forced to ‘hide’ many products on the ‘list’? Businesses are in business to make money and many supermarkets have been vocal in the past about their narrow margins and reducing profits over the years. Is this a case where the richer will get richer? Barbados Shipping & Trading (BS&T) and Hanshell Inniss are significant wholesale and retail operations in Barbados. Supermarkets like Big B, JB’s, Super Centre, etc which are owned by BS&T should be able to manage their margins more efficiently because they control the distribution and retail parts of the transaction. Will this latest move by government force the stand alone retail operations to sell-out?
We believe a more strident consumer voice in Barbados is required to demand equitable prices for goods and services in Barbados which would be more sustainable. We do not trust the artificial market which is being created through collusion by government and the private sector.