The effects of the war on Guyana’s Inflation

Jul 18, 2022 Letters

Dear Editor,

As I travel around the country to conduct a survey on contemporary issues, and in perusing data obtained by interviewers, inflation (cost of living or the rising rate in the prices of basic goods and services) is of paramount concern to the public. The public also complain about other issues like crime, corruption, security, state of race relations, and other matters impacting on their lives.

Almost everyone complains about inflation urging immediate government intervention. They note that their salary cannot cope with the rocket pace of inflation. People – the poor, middle class, working people – could hardly afford to eat. “We can’t keep up with the cost”, they speak in unison. Even shopkeepers and stall vendors and other business proprietors complain about the relatively high costs of goods and services. They can’t move their goods very quickly to earn the income once accustomed. The workers say that the rise in minimum wage (recent increment) cannot keep pace with inflation and feel it should be increased to address the problem. What people don’t understand is the factors that trigger the recent roaring of inflation or wave of price increases and the limitation of the state to tame it. The rise in wages is also a cause for inflation. But the main culprits of inflation have been the pandemic over the last two and a half years and the war in Ukraine over the last five months. People have adjusted to the pandemic and inflation seems minimally influenced by it as the world returns to normality regarding Covid.

The Ukraine war is the biggest hurdle to cross in managing inflation. The war was to have lasted a mere five days but instead has been prolonged for over five months hurting the working class and the poor. So while Guyana is some five thousand miles from Ukraine, the country is also affected by the war with the rising cost of goods. The entire globe is affected by or experiencing inflation. Much of the globalised inflation is tied to Ukraine.

Ukraine is one the world’s largest producer of grain and edible oil. These products can’t get to the world market resulting in shortages and increase in price. The war has also led to an increase in fuel. This has driven the cost of production and transportation of almost all goods resulting in increasing cost at the market. The government has nothing to do with inflation. The most it can do is reduce customs and duties and take measures to prevent price gouging and hoarding of goods to create artificial price increases.

In spite of the complaints of rising prices, very few, if any, people have been starving. But people are suffering. And the war is a cause of much of the global problems in shortages of goods. Every effort must be made to quickly end the war so that normality can return not only in Ukraine, Europe, but globally as well.

Yours truly,

Vishnu Bisram

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