The Productivity Council’s tripartite consultation on the rising cost of living has unearthed some significant findings, as it sought to identify the reasons for the hike in the cost of goods coming into the island.
To this end, Dr. Roland Craigwell and Dr. Winston Moore, lecturers in the Department of Economics at the University of the West Indies, Cave Hill Campus, conducted a survey of 51 companies under the broad theme: The Cost of Living: Determination, Duration and Frequency of Price Changes in Barbados.
Dr. Craigwell reported one of the main findings of the probe was that the price of fruits and vegetables increased every two months due to high importation costs.
He said: "Every month, 40 to 50 per cent of goods in Barbados undergo a price increase.?? In fact, some food items recorded an average double-digit price hike last year."??
The economist also revealed that of the 51 businesses surveyed in 2008, which included three construction companies and 22 manufacturing firms, 46 per cent believed that higher import prices accounted for changes in their prices.
In response, fellow researcher Dr. Moore, noted that while there were a number of factors that fuelled individuals’ perception that the price of goods was constantly increasing, he believed that the amount of money spent on food by consumers across the board needed to be examined.
He added that based on the Barbados Statistical Services’ retail index, 33 per cent of Barbadians’ monthly income was spent on food. "The reason for this is that food prices tend to have a greater range of fluctuation.?? Therefore, if these households spent the majority of their income on food, they would tend to notice the changes more, particularly given that changes in food prices are said to occur more frequently than with other goods."
Meanwhile, Director of the Sir Arthur Lewis Institute of Social and Economic Studies, Professor Andrew Downes, in his examination of the Efforts and Strategies Needed to Reposition the Manufacturing Sector in Barbados, stated that in order for the manufacturing sector to survive, it must utilise modern manufacturing technologies.
The findings of the survey of 200 businesses, revealed that since 1990, the sector had been in decline, despite several incentives to boost it. The probe also uncovered that 80 percent of sales had taken place in the domestic market, with CARICOM being the main exporter.
While acknowledging that the global economic climate, called for a new business ethos, Professor Downes advised the players in the manufacturing sector?? to take advantage of opportunities in the export market.
He said: "A modern manufacturing sector must gear up to serve global markets, as we cannot depend essentially, on CARICOM alone."
The study showed that an audit of the businesses indicated that many of the manufacturing plants had poor layout of their operations and equipment, and utilised outdated technologies.
"There is a high awareness of trading agreements, but certainly, they [manufacturers] do not exploit them… So, when we look at the EPA, CARICAD and so forth, these things are out there but, we are not getting takers for these particular agreements," he declared.
Professor Downes and Cheryl Fitzpatrick-Payne, Senior Manager, Advisory Department at KPMG, also presented a paper on The Popularity and Benefits of Performance-Improvement Strategies in the Private Sector.