“Armageddon is upon the world,” exclaimed a rather animated lady. “This world will soon be no more,” she submitted. “This war in Ukraine is the final battle that was talked about in the Bible,” she warned.
“Guh home guh siddung and wait fi the end then, nuh,” said a man with a thick bundle of envelopes. The quietude of the tax office was now totally gone as laughter erupted.
Like the folks who were in line at the tax office last Thursday, Jamaicans have different perspectives on the war involving Ukraine and Russia. Whatever our position, one thing is sure, most of us are feeling the biting effects of Russia’s unprovoked attack on Ukraine.
There is a direct relationship between the troubles of the Russia-Ukraine war and rising prices here at home, regionally, and globally. Yet some among us are gleefully riding the waves of insufficient awareness. They have taken to the highways and byways, preaching that spiralling inflation and the attendant hardships are squarely the fault of the Andrew Holness-led Administration. It is wrong!
LOOMING GLOBAL FOOD CRISIS
The world is going through a series of crises as a direct consequence of the mentioned conflict.
The Ukraine is one of the breadbaskets of the world. When a global breadbasket is no longer able to produce, the entire world feels the negative impact because we are a global village.
The reality is, and has always been, “no man is an island”.
Placing the blame for rapidly rising food prices squarely at the feet of the Holness Administration is a narrative that flies in the face of basic facts.
At the time of writing, the World Trade Organization (WTO) had reported that just over 25 million tons of grain were in storage in Ukraine. Another 25 million tons, the WTO said, were near ready for harvesting. However, many shipping ports in Ukraine have been severely damaged. Heavy fighting continues, and Russian warships patrol strategic ports located near the Black Sea and the Sea of Azov to the south of the Ukraine.
Precious tons of grain, urgently needed to feed millions in countries across the globe, could soon go bad. Food price experts are dreading the global ramifications.
Russia and Ukraine play a pivotal role in the global food market. They are net exporters of many of the crucial cereal crops, such as wheat, corn, and barley, needed by the world’s people. Both countries are also major exporters of sunflower oil.
Consider this: “With sunflower oil in short supply, demand has increased for olive and rapeseed oils. As a result, all are now being rationed both in store and online in a number of major supermarkets. Shoppers are restricted to three bottles of cooking oil each in Tesco and two in Waitrose and Morrisons.” (The Daily Mail, April 23, 2022)
Hannah Ritchie, head of research at the reputable publication Our World in Data, summarises the centrality of Ukraine in global food security: “Ukraine has been one of the world’s largest contributors to the World Food Programme [WFP] — the UN agency that provides food aid to countries in crisis. The head of the WFP, David Beasley, estimates that it provides 40 per cent of its wheat.” (Our World in Data, March 24, 2022)
Today, the WFP is sourcing food to send to war-torn Ukraine.
OIL PRICE MONSTER
We have known for a long time that when the price of oil increases, its impact is felt in every nook and cranny of this country. Oil prices were inching up before Russia invaded the Ukraine on February 24, 2022. Since that awful invasion, the price of oil has increased considerably.
Those who are trumpeting that the Holness Administration is cruelly pulling a lever to increase the price of oil are living in la-la land.
The World Economic Forum (WEF) in an article entitled ‘Russia is the world’s largest exporter of petroleum products — but what exactly are they?’ noted the following: “Although ranked third among oil-producing nations, the International Energy Agency (IEA) says that, in terms of all oil products, Russia is the world’s largest exporter to global markets and the second-largest crude oil exporter after Saudi Arabia.”
Said the WEF: “Russia’s output includes naphtha, which is used as a solvent; vacuum gas oil, which, like naphtha, can be used to increase gasoline (petrol) output from refineries; gas oil, also known as red diesel, which is used in farm machinery; and fuel oil for home and industrial heating boilers.”
Right quick, some are going to bellow, “But Jamaica does not buy oil from Russia.”
Those people need to understand that we live a severely interdependent world.
A recent article in The Economist noted that the Russia-Ukraine war has resulted in the pulling of some three million barrels of Russian oil a day from the global markets. This happened at a time when China was buying massively more oil to feed its economy, which had just started to gain some renewed momentum after months of lockdowns because of the novel coronavirus pandemic.
Round about the same time as China was reopening its economy, numerous countries around the world had just started to reopen and reboot their economic capacities.
One does not need to be an oil expert to see that demand was significantly outstripping supply and, therefore, the price of oil would skyrocket.
On the eve of Russia’s invasion of Ukraine on Febraury 23, 2022, oil surged above US$100 for the first time since 2014. During the peak of the escalation phase of tensions between Russia and Ukraine, that is, between January 2022 and mid-February 2022, oil prices jumped by US$20.
Those who shout that the Holness Administration has turned on unnecessary hardships on the citizens of this country via now-frequent increases at the gas pumps need to have their heads examined. Political parties exist to acquire and retain State power. No sane Administration puts a knife to its own throat and cuts it.
THE CHOICES BEFORE US
“Well, OK, I get it, global supply is outstripping demand and is causing oil prices to rise through the roof in Jamaica,” some might admit.
“Mr Holness must, therefore, lower the gas tax,” others will doubtlessly reason.
On paper that might sound like a good idea. But how would the Government then treat with the mounting demands and skyrocketing costs associated with the novel coronavirus pandemic; increasing clamour for more resource allocation for schools, hospitals, prisons; repair and construction of roads; protection of the most vulnerable; and dozens of contending priorities?
Where is the money to come from? Either the Government is going to borrow more or it is going to burden us with additional taxation. As I see it, those levers are suicidal in the current context.
I believe increasing borrowing or taxes, given the hardships in the country, would be the equivalent of throwing gasoline on a fire. Some would want that to happen because they think it would draw them nearer to power. We must not be led astray.
Those who say we should increase our debt stock should harken back to the very painful consequences of debt restructuring in 2010 under then Minister of Finance Audley Shaw and the second debt restructuring in 2013/2014 under then Finance Minister Dr Peter Phillips.
And those among us who are tacitly suggesting on political platforms that we should turn on the printing press and begin to dole out millions here and there do not mean this country any good.
With the rate of inflation running at close to 12 per cent, printing money would be the equivalent of Jamaica committing financial suicide. Jamaica has travelled that road before and the results were near catastrophic, not for the well-to-do, of course, but for the working poor and the middle classes.
Recently, I heard suggestions from Opposition quarters that Jamaica should consider postponing its debt payments. Apart from the obvious negative impact on our international credit ratings, a postponement would mean higher repayment costs and greater hardships for the majority of Jamaicans for years to come. Debt postponement makes no sense!
WHAT TO DO?
As I see it, the Holness Administration should stick to the current financial management trajectory that it is on. We must avoid the pitfalls of Sri Lanka, for example, at all cost.
If Jamaica were to follow the ludicrous suggestions of some, we would then have no one to blame but ourselves, when we again become the laughing stock of the region and the international financial global community.
I believe that it is to the credit of the Holness Administration that, notwithstanding the huge financial challenges of the novel coronavirus pandemic, Jamaica has not sent home any civil service workers like some of our sister islands.
Maybe some among us need to look across at what is happening in Barbados.
Consider this: “Workers at State-owned enterprises are being put on notice that there are still more layoffs to come as Government seeks to manage a huge wage bill.
“We’ve sent home, so far, just about 1,000 [people],” Prime Minister Mia Mottley said today on the call-in programme Down To Brass Tacks on Starcom Network Inc. “There are still a few more layoffs, what I call the peak structural layoffs, to come in one or two State-owned enterprises.
“The prime minister said the additional layoffs will come during phase three of the Government’s restructuring programme for the Barbados economy.” (Barbados Today, Febraury 10, 2019)
TROUBLE ALL AROUND
Those who do not pay close attention to what is happening with many of our Caricom neighbours, and those who have adopted the persona of a recluse might not have noticed that the global economic and social meltdown caused by the rapid and unprecedented impact of this pandemic continues to send shock waves around the world.
I have not seen any alarming headlines like this in our local dailies: ‘St Vincent Gov’t may soon be unable to pay salaries, pensions, NIS — PM.’ (Jamaica Observer, April 7, 2021)
Neither have I seen this kind of headline in our media: ‘Antigua Government says it cannot pay bonuses or advances to public sector workers.’ (Jamaica Observer, December 12, 2020)
A great deal of damage has been done to this country because of highly irresponsible utterances from the political podium.
Hundreds of Jamaicans have died violently because of careless political talk. Dozens of our citizens have suffered life-changing financial loss because of idle talk on political platforms.
A microphone seems to be an intoxicant to some of our past and present leaders.
It is not a secret that many of those who have done great harm to this country via the use of highly flammable language and ludicrous promises, used as cruel forms of bait and switch, are now living quite comfortably overseas.
The dreadful scars of misdirection by misleaders are still evident all around Jamaica. I have adumbrated many instances in previous articles.
Approaching the 60th year of Independence, we must resolve to listen very carefully to the political utterances of leaders on the political hustings and accordingly, hold them accountable.
GOOD SUGGESTION, MR COUSINS
Opposition spokesman on agriculture Lothan Cousins, during his recent contribution to the 2022/2023 Sectoral Debate in the House of Representatives made an impassioned call for praedial larceny to be treated as organised crime.
Said Cousins: “It is common knowledge that some criminals are trading meat for guns and, as such, prey on farmers. The change in the Act [Praedial Larceny (Prevention) Act] with other measures would demonstrate that we are serious about supporting and protecting our farmers from praedial thieves.” I agree 100 per cent.
I hail from a farming district and I know exactly what happens to a farmer and his family when they lose their crops to miscreants who practise reaping where they don’t sow. Praedial thieves, in my humble view, calculatingly deny farmers of the ability to adequately feed their families. This, to me, is an act of terror, and the State should treat with it as such. These malefactors must not win!
Garfield Higgins is an educator and journalist. Send comments to the Jamaica Observer or firstname.lastname@example.org.