THE EDITOR: I write to express my support for the recent response made by both the Minister of Finance and the Minister of Social Development and Family Services to the motion presented by the Member of Parliament for Chaguanas East, which called for the Government to outline strategies to reduce the rising cost of essential goods and services in the country.
While acknowledging the importance of addressing the cost of living, it is crucial to take an evidence-based approach rather than making baseless claims.
The Government has been proactive in its efforts to maintain stable prices for essential goods and services, especially for vulnerable groups such as pensioners.
Under the current administration, the retail price of food has only increased by 12 per cent over a five-year period, a much lower rate than the 95 per cent increase seen during the previous administration's five years and three months tenure.
Additionally, inflation in 2019 was below one per cent, a significant decrease from the previous administration's inflation rates of nine-12 per cent per year. While the covid19 pandemic caused a temporary spike in inflation to around five per cent, we have seen inflation remain at around three per cent over the past seven years, which is lower than many other countries.
The Finance Minister also rightly attributed the increase in prices of imported goods, particularly staple foods, to increased shipping costs caused by the pandemic. However, these costs are predicted to decrease in the coming months.
The Government has maintained a fixed exchange rate to control inflation and prevent hyperinflation, which would disproportionately harm the most vulnerable members of society.
In response to the Chaguanas East MP's proposal for short-term and medium-term strategies such as reversing the fuel hike, lowering VAT on all food items, revitalising the agricultural sector, and incentivising farmers, it is essential to take a more informed and evidence-based approach.
While these proposals may seem attractive in the short term, they may have adverse effects on the country's economy and may not be feasible in the long term. It is crucial to identify the most effective solutions based on sound data and analysis.
The Social Development and Family Services Minister has made significant investments in improving the quality of life of citizens. The Government has developed a road map to recovery that focuses on short, medium and long-term measures to reignite economic activity, ensure social stability, transform the economy and society, and maintain the health and well-being of the people.
Minister Donna Cox explained that the Government continues to implement a safety net to cushion the negative effects of covid19 on the poor and vulnerable, with the ministry executing a one-off transportation grant to 175,000 people who were already receiving senior citizens' pensions, disability assistance grants, and food support to help them cope with the increase in fuel prices.
In conclusion, while the Government is committed to implementing social protection measures and nurturing a caring society to empower and transform the lives of citizens, it is essential to appreciate evidence-based solutions. The Government's efforts to maintain stable prices and develop a road map for recovery are commendable and should be supported by all.