The pressure is back

Apr 10, 2018 Features / Columnists, Peeping Tom

The public are bracing themselves for difficult times. All indications are that the crisis in the economy will get worse and bring greater pressures on citizens.
The reintroduction in Georgetown of parking meters will once again lead to a decline in businesses. Not only will established businesses be affected, but so too will market and pavement vendors.
Parking meters will mean that less people will visit the main commercial districts in the city. Less consumers will mean less sales for businesses and vendors. This will have a ripple effect on employment, since store owners may be forced to lay off workers. It will affect the transportation sector. Less business for buses and taxis.
The last time that the parking meters were in force, there was a decline in sales. The commercial sector suffered a decline in business ranging from 30-70%. The reintroduction of parking meters can spell doom for the business community, which is already suffering because of the problems in the economy.
The Mayor and City Council is presumptions to reintroduce the parking meters, albeit with reduced fees, after there has been such public outrage over the parking meter contract. A legal challenge to the contract has not yet been determined by the Court, but this has not dampened the enthusiasm of the Council in reintroducing parking meters.
The Council can get away with this action because those who voted in favour of the reintroduction of parking meters know that come local government elections later this year, the majority of the citizens of Georgetown will vote along political lines, and this guarantees these councilors reelection.
The protests over the parking meters are likely to resume. But already some parents are already on the picket line, protesting another issue.
A small group of parents are protesting the hike in student fees at a private school. While all parents will feel the pressure from the increases in fees, only six of them took to the picket line to protest the increase. The other parents have not shown any solidarity with those on the picket line. But that is the story of Guyana. Only a handful of people come forward to take a stand.
There is some confusion within the media about the increase in fees. The school has explained that it was forced to increase its fees to meet increased costs. This could well be a valid reason if it is established that school fees have not been increased for years. No one should expect the school to be carrying increased costs, including higher salaries for teachers, without having to raise fees. Fees are the principal source of the school’s revenues. If fees have not increased for years, then a significant increase may be justified.
Some media houses have pointed out that the increases come after the government would have revoked the value added tax of 14% on education which was imposed in 2017. However, the removal of the VAT does not nullify the need for an increase.
The VAT is a tax which has to be remitted to the government. The removal of the VAT does not provide extra revenues to the school. It does not reduce the costs of the school.
The increase could also be a function of demand and supply. It could be that more students are applying for the school than it can accommodate, and therefore as with the law of demand and supply, the higher the demand, the higher the price.
Costs are increasing. Prices are increasing in the economy. There is no reason to believe that the school is not being affected by these higher costs in the economy.

Two weeks ago, the cambios were buying US$1 at G$210 and reselling at G$213. This represents a depreciation of the Guyana dollar and it will result in higher import prices.
The parents of that school are no doubt concerned about the size of the increase in fees, but they should try to appreciate that the school is also facing pressures of higher prices and increased demands for higher wages, and have to find a way of meeting these demands.
These are tough times. The economy is fizzling. The economy is not healthy. All the major sectors, except for gold, are struggling. The unemployment rate remains high. Five thousand sugar workers are on the breadline. The rural economy is grinding to a halt.
The increase in vending is a sign of the pressures facing citizens. People are hustling for a dollar. They are selling whatever they feel they can to bring in a buck. When the fastest growing business is the selling of dog food, you know that the economy is heading for the doghouse.
Brace yourself for pressure!

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