Not feeling ease
by Donna Sealy, Latoya Burnham and Emmanuel Joseph
Barbadians need to separate their wants from their needs, and in doing so they might realise a reduction in their own living costs.
That was the frank assessment of new Minister of Industry, International Business, Commerce and Small Business Development, Donville Inniss as he threw out an invitation to retailers and wholesalers to meet with him on their concerns regarding the contentious issue of the cost of living and prices across the board in Barbados.
And even so, the minister told Barbados TODAY late this evening that he did not believe the granting of concessions to the newest established warehouse club was as big a factor in reducing the said cost of living as was being touted.
In a direct response to questions about the impact of duties and concessions on the prices at which outlets could offer goods to Barbadians, Inniss said he believed the issues raised by the special rates given to Cost-U-Less in particular needed to be “put into the public domain” because there were some “half-truths being spread as truths”.
“There are some who believe that Government would have bent over backward for Cost-U-Less and I don’t know that that is true. Cost-U-Less came as a foreign investor and there are some concessions that would have been passed on as foreign direct investment among other things,” he said.
He then challenged other clubs that operated as direct competitors to apply for concessions, questioning: “If they did not apply should they now be complaining that they were not granted [concessions]?”.
“People argue that Cost-U-Less should have resulted in reductions to the cost of living but you have to look at the factors that affect the cost of living. There are costs in the international markets relating to where people source their goods, the volume of goods, cost of shipping, related to insurance, related to getting items out of the port and such. Then there are other issues relating to the cost of the business itself.
“There are some who would have come and set up a no-frills operation and therefore would not have the kind of charges and overheads that others that decided they wanted large locations, air conditioned outlets, large staff, and those factors where costs would be higher. So we have to compare apples to apples.”
One thing society had to guard against however, Inniss said, was the use of the issue of concessions as an excuse.
Management at the most recent price club, Cost-U-Less warned that while low prices was its business, it still had to remain competitive and would not drop prices willy-nilly.
Roland Wehrmeijer, manager of the store which has been the source of much discussion since it was granted concessions on setting up and for operating here for some time to come, said there were a small number of items where consumers would see lower prices than anywhere else.
He said too that there were others that they would be adjusted as time goes on, but warned that this did not mean they could expect to see a massive fall across the board any time soon.
Meanwhile, operators of the locally-owned Shop Smart Inc. told Barbados TODAY that factors like duties, VAT and other taxes were to a large extent determining what they could offer for their goods.
An official there said that there were local industries manufacturing items years ago that certain tariffs and duties were implemented to protect, but some of these had long since gone out of business, but the duties remained.
“I would hope that the new minister of commerce would take a look at some of these archaic and draconian duties which are often applied to items coming into Barbados and find a way of lowering them,” said the warehouse official.
On his end, Inniss told Barbados TODAY: “I am willing to listen to any business that wants to discuss these issues with me. I’ve been meeting with the stakeholders — I’ve met with the Barbados Chamber of Commerce, the Small Business Association, the private sector association, BIBA and when those consultations are completed I am hoping to bring them all together to look at the way forward.”
But the minister said he believed the issue facing Barbadian was two-fold relating to the “cost of living and the cost of high living”.
“Having come from the Ministry of Health, I have to ask if we do not have a two-fold problem. The first is the high cost of living which is driven by fuel prices, the cost of operation and then the second issue which is the social issue of the cost of high living, where we really have to separate our wants from our needs…
“We have to determine what are the wants and what are the needs. If we get everyone to look at reducing their own costs – how much electricity they use, how they use cell phones, how much they spend on clothing; how often they absolutely need to cook – everyday, then we might find that it leads to a 10 per cent reduction in their costs at home,” said the minister.
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