Barbadians are cutting back to the basic items as the cost of living crunch drags on, reported president of the Barbados Chamber of Commerce and Industry (BCCI), James Clarke.
He said that with the war in the Middle East escalating and already impacting the price of oil, the business community was concerned about the potential for spiralling inflation.
Having already declined Government’s proposal for a third Food Prices Social Compact, Clarke also made it clear that a reconsideration of that position was not on the cards for his membership.
“From what I can gather, based on the feedback from my membership, I can tell you that people are cutting back to the basics or the necessities, leaving behind the nice-to-have things. This is not something that we are surprised about given that cost of living issues have continued. One of the biggest concerns with any type of things like this is the inflationary spiral.
“This is where the cost of goods keeps going up, wages and salaries keep going up, then the cost of goods go up more, and wages and salaries keep going up. All that happens is that it just keeps feeding on itself until things are pushed up to the point where they are completely unaffordable,” Clarke explained.
As it relates to the Social Compact, Clarke said this was only a “stop-gap” measure which placed all the heavy lifting on the business community.
“The compact never considered the entire supply chain and where the cost goes on. You are basically asking the retailers to bear the brunt of reduced margins, yet the same is not being asked of anybody else along the supply chain. So, the compact is highly unlikely because, as I said, it just focuses on one part of it and not the rest,” Clarke said.
“There is first cost to go on when you buy the goods, there is shipping to the forwarders, there are packing charges, fuel surcharges, import duties and all sorts of other things that go on to it. These are things that are paid up front by the retailers, so to ask them to bear the brunt of it does not encapsulate the true inputs that go into the cost of an item that comes into the country,” he added.
Last week, Minister of Foreign Affairs Kerrie Symmonds again warned Barbadians that they may be required to tighten their belts even further.
The minister stressed that Barbadians needed to be conservative in their spending, noting that the escalation of conflict, which was just one of an extensive list of global shocks, would not help the country’s struggle with inflation. He explained that Barbados was by no means alone in this struggle and it was for this reason that citizens must do what they could to mitigate the impact.
However, Clarke said any plan of action to mitigate the increased cost of living must be holistic.
“This is why we have to examine the cost all the way along the value chain. During COVID, the Government capped the shipping amount to a pre-COVID value, but they are still charging duty on the goods, shipping and insurance. That is something we have been calling on the Government to address for sometime,” Clarke said.
“Obviously when the fuel costs go through the roof, so too would the cost of shipping. We see oil now even higher than where it was last summer and the other issue which may compound this would be if the cost of oil would increase the cost of air travel. I have not seen the airfares creeping up yet but this is something that we need to be cognisant of,” he said.
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