By Rawle Lucas
Indicator of Price Level
The Guyana Bureau of Statistics reported in its Statistical Bulletin that, by December 2007, the Consumer Price Index (CPI) for all items had risen by 30 points from where it was one year ago in December 2006. Most people look upon the CPI as an indicator of the current price level in the country, even though it is primarily about life in Georgetown and areas close by.
However, with many citizens having to travel daily from parts of Berbice, Essequibo and distant parts of Demerara to Georgetown to work, do business and shop, the Georgetown prices are also about them and their lives. Consequently, the 30-point rise in the CPI, which translates into a 14 percent increase in the average price level between the two points in time, is an issue for most Guyanese. Since every price in Guyana seems to be a multiple of a G$100, what this meant was that by December 2007, Guyanese had to find G$14 more to add to every hundred dollars to buy anything. On the face of it, this increase in price looks inconsequential and may probably be dismissed as insignificant by those with deep pockets. Even the not-so-well-off may conjure up thoughts of Shylock, the miserly businessman in Shakespeare’s The Merchant of Venice and think that G$14 is much ado about nothing. For all its scantiness, this increase in the average price level in such a short space of time masks a real danger to the economic and social life of Guyanese. Some of that has already surfaced in the form of strike action.
The destructive consequences of inflation is nothing new to Guyanese but, after enjoying some relief, inflation threatens ordinary citizens of Guyana again and is leading to desperate acts with added consequences for personal safety and security. Many parents and guardians see the suffering in their children’s eyes and live with the daily anxiety of not always knowing what will go into the child’s lunch box the next day. The health and nutritional status of children are at stake. Knowing the harm that it can cause, it is my hope that those persons in a position to make a difference would act with alacrity to do so. There is necessity for immediate and aggressive action because there is a connection between inflation and the harsh quality of life faced by so many in Guyana.
Stark Reality
The 14 percent increase in the general price level referred to above is the better part of the inflation story. The Bureau of Statistics lists nine categories that make up the all items CPI. The nine categories are food, clothing, housing, furniture, footwear and repairs, transport and communication, medical and personal care, education, recreation and cultural services, and miscellaneous goods and services. Among the nine categories, small comfort lies in the numbers for housing which showed the smallest price increase, 6 percent.
The other numbers that influence the 14 percent jump in prices contain much more undesirable news for parents who are trying to provide for themselves and their children. Items of food, clothes, medical care, transportation and other basic needs, things that people need to survive have all seen their prices rise astronomically. The price of food products, for example, went up by 21 percent between December 2006 and December 2007, one-and-a-half times the average price increase. Thus, by December 2007, every time Guyanese wanted to eat a healthy meal that included vegetables and meat products, they had to shell out an additional G$21 on every hundred dollars that they had grown accustomed to spending on food in the market.
Access to essential services like transportation and healthcare at affordable prices is about survival and quality of life. With prices rising sharply, acquiring these goods and services in sufficient quantities to meet minimum personal living standards is not always possible for many Guyanese. The price of clothing climbed 15 percent while that of medical care jumped 19 percent.
The cost of transportation rose 7 percent while items such as cosmetics and colognes used by Guyanese to look attractive and smell appealing skyrocketed by 23 percent. Just to clothe themselves and their children for work and school and to perform basic human functions of eating and sleeping and taking care of the home, Guyanese would have had to obtain a salary increase of at least 20 percent. As substantial as it sounds, that salary increase would not take them forward.
All it would do is take them back to an equally uncomfortable reality of where they were one year ago. Admittedly, I do not know of any employer who has responded with such generosity or concern to the economic plight of those workers toiling on their behalf. Consequently, it is no surprise to me that many Guyanese parents started 2008 wondering again how to make ends meet and if they and their children would survive the New Year. Today, those fears have grown larger with inflation choking them in an ever-tightening spiral of higher prices.
(Rawle Lucas is a Guyanese-born Certified Public Accountant and Assistant Vice President of the Lending Services Division.
Mr. Lucas has agreed to serve as a columnist with the Stabroek Business and will be contributing articles on economic, financial and development matters.)
