The economy in Anguilla is going through a very challenging period, and while one might argue that the very same thing is true about economies around the world, our circumstances are quite different.
There has been much talk over the last few months about hyperinflation – a real phenomenon affecting the entire world in recent years; and certainly, it has been affecting Anguilla from as far back as 2010. However, the reality of where we are right now is that we have an added dimension that is exacerbating the problem.
With hyperinflation, the cost of living is out of control and the cost of essential and luxury goods is increasing daily and at a rapid rate.
The new dynamic impacting Anguilla is stagflation where, in addition to inflation, we have an economy that is in a state of decline – people are losing their jobs while the cost of living is skyrocketing out of control. People are earning less money while spending more money on everything from food and medicine to housing and consumer products.
The questions remain: how do we survive in an environment like this, and how do we manage it?
One of the things that governments in major countries do, is to increase the interest rates as a means of slowing down the economy. When they increase the interest rates, purchasing of luxury goods such as cars and houses become unattractive as their acquisition is normally facilitated by large financial institutional loans. This can lead financially vulnerable communities into bankruptcy and despair and the world into yet another recession.
In smaller places like Anguilla, we do not have the luxury of influencing interest rates on the global market that would affect prices and the cost of living elsewhere. However, what we do need to focus on is how to ensure that the people of Anguilla can survive through the difficult period. What is required then, is for our government to tighten its belt and encourage our residents to be very, very cautious with spending at this time. If anything, disincentivise purchasing of non-essential goods across the board, while ensuring that the basic needs of people are met.
What we also know is that when people have to stretch their dollars, they tend to scale back on purchasing healthy foods. Instead, they substitute healthy food with food options that might be filling but not addressing their nutritional needs. Poor diet and bad eating habits could be possible factors contributing to the increased number of deaths on our island in recent years – unhealthy diets and stress from not being able to cope.
In this crippling and negative economic time, we have to focus on addressing the fundamental and essential things that are needed and hold off on purchasing a number of things that are luxuries. And while the introduction of the Goods and Services Tax (GST) has contributed to stagflation and hyperinflation in Anguilla at the present time, our government must recognise that to get through this, it cannot turn its back on the people and think that all will eventually be okay, the people will get through this, let us load on the taxes, etc. The reality is that people need the support and help of government during this period, as the economy is very limiting and some businesses are themselves on the verge of collapse.
Anguilla’s economy is an issue that we, as a small community, should talk more about and should creatively try to address. Are there things that we can make and produce, or services that we can provide that we can sell to the rest of the region or to the wider world? If so, we ought to be very bullish on pursuing those opportunities.
So, what is one thing for sure that we can turn to?
One lucrative thing we have as a country is fishing. Perhaps we ought to consider fishing as a viable whole-scale safety net. Providing fish for our own consumption and getting our fish to market in an aggressive way is one way to ensure a food supply and an avenue to expand our economy. While we appreciate our tourism product, we know it is not really delivering for our people. It falls way short – offering meagre wages and leaving persons unemployed for too many months out of the year. We know that we have to appeal to other markets to keep that product viable year-round, and we, as one community, have to keep touristic activities going on Anguilla to help to rebound the economy while at the same time ensure that we keep inflation under control.
Generally, the government’s policy doesn’t seem to speak to issues of inflation, but government can influence inflation by its methods of taxation and by some of its policies. We do admit that it is challenging and will continue to be challenging. The world has fear and apprehension that we might see a downturn in the global economy and that could spell disaster for all of us. To go into a recession while we have a depressed economy that is suffering from both hyperinflation and stagflation, couldn’t happen at a worst time.
It is imperative now that we become our brother’s keeper. It is imperative now that our government enacts policy that ensures that the basic needs of all of our citizens are satisfied. Let us encourage people – certainly from a government standpoint – to conserve, focus on healthy living and make sure that medical services are available to our people at a price that is affordable.
With the recent increases in medical services, the average person hesitates to seek medical care and waits until the absolute last minute to get help. There is also a great need for emotional support during this time.
Yes, regrettable, stagflation is real and hyperinflation is real too. This double-edged sword is something that is cutting through the “heart” of Anguilla, and impacting many persons around the world.
