Customs procedures contributing to high food prices
Staff Reporter- SKNVibes.com
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| Dr. the Hon. Timothy Harris, Minister of Foreign Affairs, International Trade, Commerce and Consumer Affairs |
BASSETERRE, St. Kitts-A recent report filed by the World Bank has stated that many Caribbean countries have inefficient customs practices that cost millions of dollars which are then passed on to consumers in the form of high food prices. However, Dr. the Hon. Timothy Harris, Minister of Foreign Affairs, International Trade, Commerce and Consumer Affairs contends that external forces are responsible for the rising food prices experienced in the Federation.
The World Bank report reads "Food products entering a Caribbean or Central American country often are subject to multiple delays, unnecessary direct costs, and losses and damages that further harm consumers". Through careful study the report claims to have found that “customs clearances are particularly poor in the Caribbean, typically taking three to five days, compared with one day for Chile and three days for all of Latin America."
The report goes on to assert that the Caribbean spends double, if not triple the amount of GDP on logistics compared to the expenditure of countries in the Organization for Economic Cooperation and Development.
Though the World Bank report did not specifically study the Eastern Caribbean, its assertions appeared to be Caribbean-wide and come at a time when many citizens of the Federation have questioned whether or not the government has taken enough action toward relieving the financial strain on lower income families. ~~Adz:Right~~
Harris stated in an interview with SKNVibes.com that he was confident in the actions of government to cushion rising costs, especially the removal of the consumption tax which would “provide the most significant relief for citizens.”
Ambassador Rosalyn Hazelle, Permanent Secretary in Harris’ Ministry warned however, “if we are not seeing any impact in the country, it is not because [government officials] are not trying. It is because there are other external forces that are driving costs up.”
Harris added that government is “hoping do an evaluation on the waiver of the consumption tax and then make a judgment” as to its effectiveness before the 2009 budget is passed. He stated that if the consumption tax was determined to be ineffective the government would look at other policies, such as a reduction in the Common External Tariff to provide the necessary relief for citizens.
In a closely related issue, the minister noted that he was concerned about a “lack of diversity in the marketplace” in regards to imported food and estimated that Rams handles around 60-70% of the market and therefore have significant control over import market value.
The World Bank report ultimately stated that how well each Caribbean nation weathers this current crisis will take time to unfold, but also suggested that “the payoff to sustainable policies is high, as history suggests that poorly designed schemes - typically those introduced under crisis conditions—are difficult to change later” and can be detrimental to the long term economic growth of a country.
