Local businesspeople, bracing for the ripple effect from global inflation, are appealing for reduction of import duties to ensure stability of prices for consumers in T&T.
And one business group, which lauded the Prime Minister, says it will also require public sector reform.
This appeal on import duties reduction has come from businesspeople from various sectors who expressed deep concerns about global inflation severely impacting the world, and by extension.
This follows the Central Bank’s recent warning that higher prices, particularly imported inflation, will pose a challenge to the economy this year.
Starlite Group chief executive officer Gerald Aboud, among those monitoring the situation, noted reports that US President Joe Biden had acknowledged “real stress” as inflation there reached a 40-year high.
Aboud said inflation in the US, hitting seven per cent, is significantly affecting purchasing power in T&T
He said, “Much of consumer goods we use daily including things like butter are increasing in price, this comes along with previous years inflation now is having a very serious effect on retail businesses. Customers cannot afford goods. Baked items that use butter have almost doubled in the last two years.”
He added: “Everything else from toothpaste to washing detergents are mostly imported. Prices from meat to spices and packaging have increased and shortages in US currency have exacerbated the issue.”
“Our retail food prices have had to raise almost 25 to 35 per cent in the last year. It is putting pressure on wages. Furthermore we do not know how long this issue will last with global supply issues such as shortages in commodities as well as the shipping cost hike that are affecting all building materials, many that come from China and other far places.”
“Prices on steel have gone up also further affecting building. There should be an ease on duties to allow consumers affordability after this two- year challenge of COVID- 19 and since the economy needs to expand.”
The Confederation of Regional Business Chambers (CRBC) also noted elevated inflation has been driven by supply chain disruptions and pent-up consumer demand for goods following the reopening of the economy in 2021.
CRBC vice chairman Ricardo Mohammed, who noted, Central Bank’s concerns that renewed inflation growth would require a sustained monetary policy response, added: “They’ve recognised that rising prices won’t be transitory and could be a major threat to the labor market and the rest of the economy. This is very concerning.”
“Further as our currency loses value, prices rise buying fewer goods and services. This loss of purchasing power impacts the general cost of living for people which ultimately leads to deceleration in economic growth,” he also said.
Mohammed urged Government to rebuild confidence in the economy, fix the ease of doing business and co-create an investor friendly climate.
He said, “In the immediate term, Government may have to seek to reduce import duties and temporarily reinstate the fuel subsidies as a stop gap measure to assist its citizens to cope with this crisis.”
Mohammed also said the Prime Minister’s statement regarding the hiring of private sector executives/experts as permanent secretaries in the public sector, the CRBC describes this as a revolutionary proposal. The CRBC believes that it was quite noble for the Prime Minister to advance such a unique idea.
However, the CRBC believes that the Government must begin with a comprehensive public sector reform programme.
Such a programme should include among its many elements:
a) Develop and strengthen civil service systems under criteria of merit and flexibility.
b) Strengthen the fiscal capacity of the state and improve efficiency and transparency in expenditure management;
c) Improve the capacity for coordination of strategies and public policies, especially those that fight poverty.
d) Modernise public services management.
e) use the potential of the knowledge and information technologies (including Digitalization) in public management