Japan’s woes may hurt Guyana

Mar 15, 2011 Editorial

The world is a village. Whatever happens in one corner will definitely affect other parts of the world. For example, the civil war in Libya has had a marked impact on oil prices in other parts of the world. And this impact is not insignificant.
Just over a year ago the world was reeling from exceedingly high prices. These came down after a concerted effort by the oil producing nations. This time around, the world is looking to the other oil producers to increase production to compensate for whatever shortfall may have resulted from the non-production in Libya.
Last week an earthquake and followed by a tsunami struck Japan which is more than halfway around the world. The impact of this catastrophe will not leave Guyana unscathed. Most of the cars in Guyana have come from Japan and its factories in Singapore. Also coming from Japan are the millions of spare parts for the vehicles.
Indeed Guyana is not too picky about the age of the vehicles it imports. There was a time when cars older than five years could not have been imported. This changed after the PPP came to power. The then President Cheddi Jagan waived the age restriction when he contended that Guyana is a poor country and poor countries must live within their means.
In his book, therefore, old vehicles would have been cheaper. He did not consider that regardless of the age of the vehicle the shipping costs would have remained constant. Neither did he consider that older vehicles would need to visit the workshops much more frequently and would therefore attract even more foreign currency through spares.
The earthquake and tsunami in Japan will affect the shipment of cars and spares from Japan. Of course, the auto industry will not suffer too much because Japan has other ports that have remained open. It is unlikely, though, that the car and spares importers would not have imported from the affected part of Japan.
Yet it is not as straightforward. Some of the importers are not really established dealers. They do not relate to the car companies in the foreign country. Given the size of their operations they would rely on third parties. The third parties would shop around for the best deals because they are more profit oriented and the size of their operations would limit the extent of their profits.
Many back in Guyana with open roadside show windows disappear at the first sign of trouble or after some shortfall in business. As one importer put it, when the business gets tight the roadside dealers disappear, often with people’s money.
For some time now consumers, including people who use hire purchase service, have been asking for hire purchase legislation. Had there been such legislation there would not have been the worry that must now accompany the disaster in Japan.
The situation would also affect the national coffers. In recent times, over the past three or four years, there has been a rapid increase in the sale of vehicles. Where previously it took three years for the Guyana Revenue Authority to process a series, these past two years have seen that time slashed by almost two-thirds. In just over a year Guyanese ran through a series. The fastest selling series has been the one just completed.
This suggested that people have more disposable income and the government smiled because there was so much more from excise taxes. This disaster in Japan is likely to slow that flow because there will be an impact on car imports.
Many of the carmakers have severely cut back on their production, some by as much as 45 per cent. It could be a long time before Guyana begins to receive cars in numbers it had grown accustomed to. The spare parts situation would make the situation even worse.
But there is more. Any aid from international donors may not now be forthcoming as the international community switches its efforts to places where it believes such aid is more needed. Undoubtedly, Japan would be considered more needy.
Fortunately, Guyana is not depended on these things and would therefore not be too seriously affected by any aid cuts.

Latest News

Japan’s woes may hurt Guyana

Related

Similar Articles

The Glenn Lall Show | November, 20th, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Green Machine returns to RAN Sevens

GASA snubs Delroy Tyrrell for World Championships

Cricket Australia appoints former West Indian...

GBA appoints International Technical Officer...

Warriors triumph but Royals lead standings

D-Up Basketball Academy Training camp brings...

Features/Columnists

A false panacea for electoral integrity

Rising Gun Crimes in the Caribbean: Urgent Action required by all

President Ali’s tough love

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Japan’s woes may hurt Guyana

Share this:

Related

Similar Articles

The Glenn Lall Show | November, 20th, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]