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Flying Blinds – Nassau Guardian

One of the key takeaways from Prime Minister Philip Davis’ national address last week was his announcement that 32 “items” have been added to the price control list. Davis was left with eggs all over his face, revealing a startling and disturbing failure to properly devise policies, taking into account the full impact, to ease the burden of inflation.

The prime minister described the change as adding 32 “items” to the price control list, but stressed that the business people believed to be most affected would actually be items in 38 categories. doing. And the expansion of the bread list will put 40% to 60% of merchant sales under price controls, according to a letter to the Prime Minister from Philippe Benneby, president of the Retail Grocers Association. Become.

As one industry insider said: Hundreds, if not thousands, of items are already subject to price control. It is very dishonest to say only 38 items or only 6 months. “

Many consumers view grocers, especially large grocers, as heartless and greedy, but the already high cost of doing business in the Bahamas, the already meager profit margins, and low wages for minimum wage workers. The increase in salaries that will have to be paid, and the astronomical increase in electricity prices announced by the Prime Minister earlier this month, and the expansion of price controls, are the perfect storm for many in the industry.

The fact that the changes were to go into effect only six days after Davis announced them was a sign of concern and a nonsensical approach to public policy, and a degree of sloppiness, perhaps the incompetence of those who recommended and agreed to such changes. emphasizes the decision.

No doubt the prime minister and his aides see him as a leader interested in wiping away all the tears, announcing something of widespread appeal, rather than just ranting about his administration’s achievements and plans. I knew I needed to use his national address to introduce…

However, we are baffled that no one in his circle of advisors saw the value in consulting with this area to understand the business and the implications of such a decision.

We know there are skilled experts in government who can model scenarios for such policies, but the decision to place the burden of mitigating inflation on grocers was more a matter of policy than policy. It seems that. last week length.

From a purely political standpoint, those advising the prime minister clearly failed to analyze the implications beforehand.

How does the government help consumers by killing businesses, thinking it will help the national economy and political brand?

“When you touch something, you touch something that touches something, because the economy is an interwoven reality of inputs and outputs, all of which affect everything else. Because it gives,” former Secretary of State Zivalgo Raine said on his Guardian radio show. Z Live” will be broadcast on Mondays.

“When you touch labor, it affects costs, it affects prices, it affects income, it affects employment, it affects all sorts of things. That’s why modeling in economics is so complicated. .”

Why would any government think businessmen would sit down and be shoved into such a tight spot and bullied into submission?

Under the announced changes, the government is allowing wholesalers up to 15% markup and retailers up to 25% markup in accordance with the Price Control (Applicable to Additional Items) Regulations 2022 .

The economy ministry said the changes went into effect on Monday, but businesses that don’t follow the law won’t be penalized because the government has agreed to follow-up consultations with the sector.

Talking to reporters yesterday, Economy Minister Michael Halquitis said representatives of grocers and their industry who attended a meeting with the prime minister on Monday expressed concern that sufficient notice had not been given to implement the changes. It pointed out.

But the problem with notifications is really the sidebar. The key issue at hand for the sector is not notification, but profit itself, what they do to their business.

As one industry insider said: This is a matter of survival. “

In other words, just giving business people time to change prices is not an acceptable solution for affected businesses.

Asked why the government did not consult with grocers on the issue before the change was announced, Halkitis said: This idea has come up before, so I know what the problem is. So, like I said, I thought we had a good meeting.Hopefully we can move forward and people can start making an impact in their pockets. “

Ahead of Monday’s meeting with grocers, the prime minister seemed oblivious to the dilemma plaguing businesses with these changes.

“I hope they will work with me to bring peace of mind to our people,” he said.

“The government has done a lot to make sure they are not overburdened. Convince them to understand what’s going on and why we have to do what we’re trying to do.”

But it is the government’s job to fund social assistance, not the business community, which already faces high operating costs.

One individual familiar with the grocery sector spoke without expecting attribution, but said: If it’s about helping the poor, why aren’t there targeted programs to help the poor?

“If this is enforced, grocers will have shorter hours and fewer selections. , you will find yourself in a situation where you cannot order the product because you have to pay in advance.”

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Laing said on Monday’s show that he understands what the government is doing.

“I want you to see me try to do something and believe me,” he said. “And sometimes that can be completely problematic.”

He added: [the government] What you feel should keep you away from pain, without considering the complexity of the problems that cause pain, is that they can ultimately cause you more pain. .

“You can certainly get smaller short-term gains from some of the things governments do, and trade it for greater pain later. We believe that you know that you don’t want to endure even short-term hardships and decisions about your comfort.

“And that’s what’s happening in some of these cases today.”

Laing pointed to the issue of fuel charges for the Bahamas’ Power and Light (BPL).

When BPL announced a fuel rate hike in February and its then-CEO warned that delaying the rate hike would create greater difficulties ahead, the prime minister reversed the decision.

Seven months later, he announced another significant increase in fuel prices, saying further delays would exacerbate the situation.

Similarly, Davis says there is no plan and no National Insurance Commission rate hike. Meanwhile, the social assistance fund is running out of time.

We do not believe that the dilemma facing the prime minister and his government will be easily resolved.

But we must not take an unrealistic approach or adopt a simplistic strategy that will harm the economy in the long run and the consumers we are trying to protect.

Central to addressing many of these issues is a focus on promoting economic growth.

On a radio show, Laing was asked by a caller what he would have done about inflation if he were prime minister.

He replied, “…improving the prospects and prosperity of Bahamians is based on revitalizing the Bahamian economy.”

“Reviving the Bahamas economy is a win-win for everyone. I will not try to satisfy you or comfort you with temporary and unsustainable means,” Raine said.

“I wouldn’t have had these things because I knew what they meant and the fact that in the medium to long term it would make your situation worse.

“What this economy needs is to liberalize and mobilize capital and generate economic activity at scale. It will bring more peace of mind to the people of the Bahamas, to workers, and to businessmen and businesswomen in the Bahamas, but it will muck with state power over other things that too many touchpoints are connected to. It’s harder than

He wondered why the government hadn’t embarked on a full-scale investment mission.

“We need economic growth,” Mr. Laing emphasized again. “That’s the elixir. That’s how we win, win.”

He suggested subsidies aimed at the most vulnerable families were needed instead of the complex disruptions that disrupted the economy.

This was certainly something to consider, not only considering the current pressures being placed on grocery stores, but also as it relates to the broader decisions the Davis administration is making in response to the roaring inflation crisis. .

We urge governments to consider more carefully the broad implications of policy decisions of this kind in the future.

There will be economic and political repercussions if the Prime Minister does not release the vice grip around his corporate neck.

It’s never too late to reverse course.

https://thenassauguardian.com/flying-blind/ Flying Blinds – Nassau Guardian

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