Monetary Council provides recommendations to deal with inflation
By Terresa McCall
Reporter-SKNVibes.com
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(L-R) Minister of State with responsibility for Finance (St. Kitts), Nigel Carty; Prime Minister and Minister of Finance (St. Lucia), Stephenson King; Governor of the Eastern Caribbean Central Bank, Sir K. Dwight Venner; Chairman of the Council and Minister of Finance (Anguilla), Victor Banks; Chief Minister and Minister of Finance (Montserrat), Lowell Lewis and Minister of Finance (Antigua & Barbuda) Errol Cort briefed the press on matters discussed by the Council during its 61st meeting.
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BASSETERRE, St. Kitts: THE Monetary Council of the Eastern Caribbean Central Bank (ECCB) has agreed to provide recommendations to Eastern Caribbean member states in dealing with the issue of increases in consumer prices.
The agreement was made on Friday during the Council’s 61st meeting held at the ECCB’s headquarters, St. Kitts.
According to a communiqué of the meeting, Council addressed a number of issues including inflation and noted that the underlying cause for inflation was the influence of external factors.
“Council noted that there were strong indications that the inflationary pressures were largely the result of the global aggregate demand shock which had impacted commodity prices, particularly, oil, metal and food. Council further noted that the depreciation of the US dollar was also a contributory factor and to a lesser extent, domestic factors arising in part from the lack of competition in the distribution system.”
The communiqué quotes the Council as agreeing that if the buoyancy of the economies is to be enhanced, “optimal interventions” would have to be utilised.
Recommended short-term initiatives include, “Public awareness campaigns to educate the general public on the causes of inflation as well as to shed light on how the inflation rate is calculated; (the creation of) programmes to assist the most vulnerable groups in society (and the implementation of) measures aimed at promoting improved local agricultural production in order to be better able to supply both households and the hotel sector.” ~~Adz:Right~~
Council also recommended medium to long-term initiatives which can be employed to boost the economies’ resilience to external shock.
These include the purchasing of commodities in bulk, “at an OECS level in a similar manner to that currently used for purchasing of pharmaceuticals under the OECS Pharmaceuticals Procurement Service”, the creation and implementation of “a local and regional energy policy geared at conserving energy”, “greater flexibility in the labour markets within the ECCU to allow for the free movement of skilled labour which would help to contain inflation caused by wage pressures; increases in productivity, particularly labour productivity by enhancing the skills of workers; the establishment of Tripartite Committees, where they do not exist, comprising representatives of the public sector, the private sector and labour unions to discuss issues related to wages, prices and productivity; (the introduction of) a global commodity information service to provide better trade information to importers which would facilitate negotiations with oversees suppliers (and the) establishment of an OECS Distribution and Transportation Company (ODTC) to address the deficiencies in inter-island trade by forging greater distributional links throughout the islands and providing fast and reliable transportation services for goods.”
In making these recommendations, the Monetary Council took into consideration a report issued jointly by the ECCB and the OECS Inflation Working Council (IWC) and noted that it (the Council) welcomes further work to be done in collaboration with the IWG, relative to the issue of inflation.
