According to Prime Minister of Barbados Mia Mottley, the Caribbean Community (CARICOM) is being advised to be ready for the effects of imported inflation as the continuous rise in the cost of living, which is fueled in part by rising gasoline costs among other things, is expected to continue unimpeded.
In his remarks at the 44th Regular CARICOM Heads of Government meeting’s closing press conference on Friday in Nassau, The Bahamas, Mottley said that while overall prices have started to decline due to lower freight costs and other cost-of-living-related factors, the region is not likely to fully benefit from this trend.
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“Regrettably, as we know, in our region and perhaps in other parts, when prices rise they hardly ever come back down. In our own country, we have tried to enter into a voluntary compact with the private sector and the labor movement to see the markups being contained and I say markups because the majority of what we use in this region, we do not produce. So we will import inflation because the inflation is coming internationally.”
The average cost of importing food into the area each year is over $5 billion USD, and the CARICOM Heads of Government have pledged to cut this cost by 25% by 2025. It is suggested that the CARICOM Agri-Food Systems Strategy be implemented in the Member States to assist in achieving this goal by paying particular attention to priority crops and products like chicken, corn, soy, meat (goat, sheep, and beef), rice, and specialty vegetables that are heavily imported into the region.
Mottley urged for the creation of additional fiscal headroom in such an event, citing the Barbados Initiative, which supports the insertion of a natural catastrophe clause that would mandate a temporary suspension of interest rate payments on debt owned by a country impacted by a climatic disaster.
“We need to have better terms of conditions for accessing finance to give us the ability to buy more, do more, and to be able to create that space so that we can do for our citizens more. This region is heavily indebted, not because of profligacy or corruption but because we continue to face serious exogenous shocks and also serious problems as it relates to the climate crisis,” she noted.
She continued, “Every time a hurricane or storm or flood hits, invariably it’s the governments that are carrying the costs of trying to restore people to stability. To build the houses, to deal with the infrastructure, to protect coastal defenses, and all of these things that eat into the space that you would normally have to provide access to education, and health and to be able to subsidize and promote some level of buffer between the citizens and the increasing cost of living.”
