His suggestion, while examining the government’s recent response to reports of price gouging, was among several interventions he proposed that the government may need to look at in order to mitigate against the current price increases being experienced around the world.
In a recent Facebook post, Walwyn, who served as Education Minister within the former government, said the Russia-Ukraine military conflict “will have implications on food supply and fuel well into 2023 as it stands”.
“Russia is the world’s largest exporter of wheat and Ukraine is the fifth largest. Together they account for 19 per cent of the world’s barley supply, 14 per cent of wheat supply, four per cent of corn and one-third of global cereal exports. Russia is the world’s third-largest producer of petroleum,” Walwyn reasoned.
He then added: “Houston, we have a problem!“
According to the former minister, this problem will permeate every stratum of the local economy. Giving a brief explanation of the economics relating to supply and demand, he noted that prices for items in low supply and high demand will steadily rise to meet the consumer’s expected demand.
“When the cost of doing business increases, businesses often assess their operations with a view to cutting cost and for most businesses, the labour cost is the first area that gets attention,” the former legislator argued.
He continued: “The knock-on effect of reduced work hours and possible layoffs will take a toll on every area of the economy. The stark reality of business in an economy like the BVI is that you cannot pass on every increase in the cost of business to the consumer. The market cannot always absorb it.”
Walwyn said while the planned interventions proposed by the Andrew Fahie-led government may be well-intentioned, they are “woefully inadequate”.
He called for a much higher level of intervention and said the government must do its part to keep the local economy intact.
“It must look at the current import duties and other fees with a view to reduce or suspend some of them. It must address the matter of the fuel variation charge on electricity,” Walwyn argued.
He also insisted that government must find ways to assist businesses to better access capital for operational purposes and meet with the business community to see how best they can assist businesses to ride out the current proverbial storm.
“The local business community has been under severe strain since 2017 and is in need of major support. The COVID stimulus, unfortunately, did very little to help businesses to keep their doors opened,” the former legislator posited.
He added: “We can get through this but it will call for strong, thoughtful and inclusive leadership. I hope that we can rise to the occasion.”