Too Little, Too Late?

May 11, 2008 AFC Column

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By: Raphael Trotman (Leader, AFC)

President Jagdeo’s unveiling of a menu of measures to address the escalating cost of food, fuel and consequently, the cost of living is welcome, but cannot escape the criticism of being rushed, unstudied, and insufficient.

It is passing strange that the measures were revealed on Wednesday, 7th May, 2008, the day before the National Assembly was set to debate a Motion on rising food costs. This Motion was published on the Parliamentary Order paper on the 29th April, 2008, and simple deduction would tell us that when the Motion was submitted to Parliament asking for the Members of the Assembly to “take note” of the Government’s efforts, the government itself had not yet finalized its measures and was therefore engaged in deceiving the Members of Parliament.

This disregard for the authority of Parliament was further compounded at Thursday’s sitting of the Assembly when the Minister of Agriculture decided against proceeding with the Motion, and instead read his prepared speech as a Statement on Policy.

Those of us in the Opposition, who were present, were denied the opportunity to comment, rebut or challenge the government’s policy.

The crisis surrounding escalating food and fuel prices is a worldwide phenomenon and Guyana as a financially depressed nation will be more vulnerable to the shocks and tremors of the global economic meltdown. Already, the crisis is affecting the type of meals families are eating, influencing decisions as to whether children will be sent to school because of the opportunity cost of doing so, and leading to increased tensions as groups compete for scarce resources.

In Guyana this crisis will exacerbate an already fragile peace that is maintained between communities which are strongly divided along political and racial lines.

Many warned and foretold of the coming dread including the erstwhile Cuban leader Fidel Castro who had lashed out at the over-emphasis on biofuel production at the expense of cultivation for food production. These warnings have now been realized and governments and policy holders throughout the world have to institute measures to immediately cushion the shock and trauma of high prices, and to prepare for the long haul.

How we handle the crisis in Guyana is the defining factor. No one can blame the Government of Guyana for the current spikes in fuel and food, but we can blame the government if it takes wrong approaches, or if it fails to consult and communicate extensively with stakeholders, and to accept meaningful suggestions and recommendations from our political and civil society partners.

Blame will also be in order if it fails to embrace the concept of inclusivity in the implementation of the agreed measures.

A reading of the President’s proposals together with the Minister of Agriculture’s pronouncements shows that the government’s response is limited to a few areas only:

1. A 5% increase for public servants. (No analysis is available as to what informed the decision to give 5% as against a higher figure given the rate of inflation and the rising costs.)
2. A $4,000 non-taxable subsidy again to public servants. (This is good but does nothing for the hundreds of thousands and the most vulnerable, particularly children, who are not public servants and are therefore outside of this net).
3. Subsidisation of the price of flour by supplying flour at the original price to a designated number of bakeries. (This is a worthwhile suggestion but again in the absence of any analysis or data we are unsure as to whether the identified bakeries include those within villages and communities throughout Guyana, and whether the cost of transportation will also be subsidised for delivery to hinterland bakeries so as to keep prices low).
4. Subsidising the cost of utility services. (This suggestion by Minister Persaud will be difficult to implement and we await word as to who will benefit, how those to benefit will be identified, and when this proposal will be implemented).
5. Implementing the “Grow More” Campaign. (This is perhaps the best of the government’s proposals and must be truly national in reach. Those of us old enough to remember will recall that the late President Burnham had pushed this initiative during his lifetime but the people of Guyana were not ready to accept the absolute necessity of becoming self-sufficient in food production and the direct benefits that could be derived from exporting the excess production).
6. Zero rating of essential food items, diesel and agricultural inputs
7. Monitoring of exports of essential agricultural commodities. (To what end?).
8. Assistance to single family households

WHAT’S MISSING?
1. A review and rolling back of the Value Added Tax (VAT). This should include the zero rating of all food items. A temporary suspension of VAT or a reduction of the rate from 16% to 8% would be the best way to go.
2. Increasing export tariffs on food and agricultural products to keep our rice in Guyana.
3. Removing or reducing the import duty on food products as was done in Cameroon.
4. The establishment of a social safety net to protect the most vulnerable of the vulnerable based on means testing. This safety net must target infants and children by providing meals and subsidies. The Bolsa Familia programme in Brazil is a great example of getting this done.
5. Small and large scale farms must be established and supported in private sector/government partnerships.
6. The Government should move to developing storage and de-hydration facilities that would greatly assist farmers and guarantee supply.
7. Commercial banks should be encouraged to provide better services and facilities for farming, and in the absence of the re-establishment of an Agriculture Bank, the Government should subsidise this new facility by making monies available to be distributed to banks and lending institutions such as IPED.
8. There must be an enhanced diplomatic effort to ensure maximum participation and benefit in schemes being developed by the multi-national agencies such as the World Bank, IMF and the United Nations.
9. A bi-partisan approach must be encouraged to tackle the problem. In the same manner that the Lusignan and Bartica massacres brought stakeholders together, so too must the war against hunger lead to inclusivity and consensus in the manner of resolving the problem.
The UN Secretary General Ban Ki-Moon earlier in May made the following remarks: “if not properly handled, then the crisis could cascade into multiple crises affecting trade, development, and even social and political security around the world.”
There are already protests in Berbice and Georgetown. We should not for one moment dismiss or underestimate the people’s high levels of frustration, feelings of betrayal, and hopelessness.
These can become igniters in an already combustible atmosphere. The government is therefore put on notice that its mistakes and missteps made in the handling of this latest crisis will not be accepted.
To all the women and mothers of Guyana who keep the rest of us going through thick and thin by keeping bread on the table, we salute them and say Happy Mothers’ Day!

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