One of the many early analysis made by comrade Ralph from the start of the Covid-19 pandemic was his leadership on the fact that there were 4 dimensions to the pandemic; Health, Economic, Social and Security. His recognition of this reality guided the manner in which he led the development of his government’s respond to the pandemic that addressed in an integrated manner the 4 dimensions.
It was clear that while measures had to be taken to slow the spread of the virus, care had to be taken that those measures didn’t cause economic hardship on citizens of this country. The most popular measures used by both developed and developing countries to manage the spread of the virus included curfews, states of emergencies and lockdowns, all of which proved devastating to peoples mental health, and financial wellbeing. With many producing countries employing lockdowns, many businesses including factories were closed, and countries also closed their borders restricting trade.
As a consequence of these measures, there arose acute shortages in goods as production slowed significantly and this was further compounded by issues with transportation as planes weren’t flying and ships weren’t sailing as borders remained closed. The disruption in the supply change caused by the pandemic resulted in price increases across the board and consumers began to feel the economic pressures of the price increases as they struggled to adjust during the pandemic.
The world was still very much in the throes of the pandemic when the Russian Federation decided to conduct what it referred to as a “special military operation” in Ukraine, something that amounted to an invasion of a sovereign country. Immediately this conflict that involved a major oil exporting country, triggered an increase in the price of oil and with that a ripple effect.
Also to be considered is the fact that Ukraine is a major supplier of wheat that is used for flour and other commodities, and that too contributed to rising prices. As a result, SVG like many other countries is experiencing the increase in prices across the board, but this government lead by comrade Ralph is doing its part to cushion the impact on consumers.
Previously, the government implemented a stimulus package that included income support for various categories of workers who had their income affected by the pandemic as well as families, farmers and fisher folk affected by the eruption of La Soufriere. More recently, the government has announced a set of subsidies in two sectors, transportation (fuel) and agriculture, that will go a long way in easing the burning of consumers following the sustained increases in prices globally.
Gasoline and Farm Input Subsidies
In response to the consistently rising prices of oil on the global market and the shortages in commodities that are responsible for increases in prices of basic consumer items on shelves, the government has stepped up to help cushion the impact on local consumers. The two areas that have been singled out immediately for relief are agriculture, through subsidies in inputs and transportation through subsidies in the price of gasoline and diesel.
The farmers in this country have grown accustomed to the efforts of this government to assist them as we continue to invest in the very important agricultural sector. Prior to the ULP coming into office, the NDP administration had taken profitable state owned businesses and pawned them off to their friends in business which allowed them to realise significant profits that benefited those private establishments. While the ULP continues to recognise the critical role of the private sector in national development, and is ready to create the enabling environment for businesses to grow, this must not be at the expense of viable state owned enterprises that can be used to the benefit of all.
Take sugar for example, under the NDP, the importation of sugar was left to a single private sector entity and this no doubt was a very viable business that has state protection essentially, but it was not for the overall benefit of Vincentians. The ULP recognised this and made a decision to have the Input Warehouse, a state owned entity, import sugar, with the intention to have the profits used to subsidise inputs for the farmers. Because of this initiative, farmers are able to have significant discounts through subsidies for their fertiliser.
For example, farmers will benefit from a subsidy of $20.73 (22%) for each sack of sulphate of ammonia, in the case of ordinary manure, the subsidy is $54.59 (37%) and as much as $72.67 (41%) in the case of urea. These subsidies to farmers will go a long way to ensuring that the costs of inputs remain manageable and ensure some stability in the price of farm produce on the local market. Imagine if this ULP administration didn’t have the foresight to structure the importation of sugar in the way it did through the Input Warehouse, but now thanks to vision, the farmers of this country can benefit.
In terms of the price of fuel, that continues to rise globally, SVG uses the 3 month rolling average to determine the retail price of oil on the local market. Based on the trends, the price of gasoline should have been increased from $14.69 to $16.07 per gallon (+$1.38) and the price of diesel increased from $13.20 to $14.01 per gallon (+.81) as at Wednesday April 13, 2022. The government has however decided that it will not allow an increase at this point but instead subsidise the difference for the motorists for at least another two months possibly while the global trends are monitored.
Both of these measures will cost the government hundreds of thousands of dollars over the next few months as the attempt is made to ease the possible burdens that will invariably be caused as global prices continue their upward trends. In light of the challenges we face currently, we encourage Vincentians to monitor their spending patterns, but even so, this caring government will continue to utilise initiatives that will help our citizens to between cope with the challenges.