The interconnectedness and vulnerabilities of Caribbean economies have been exposed yet again as Barbadian and regional consumers hold their breath over the looming threat of a major port workers’ strike in the United States.
The planned industrial action could not have come at a worse time as consumers here struggle with high food and energy prices and supermarket expenses erode the disposable income of most households.
The Conference Board, a nonprofit group comprising over 2 000 companies in the United States, has argued that the East Coast and Gulf Coast port workers’ industrial action will have serious economic fallout for the world’s largest economy.
With the US already divided and preparing for a presidential election in under two months, the grouping contends that even a one-week shutdown could cost the economy US$3.78 billion.
The group’s analysis of the high-stakes negotiations for pay increases was that the strike was likely to affect 36 East and Gulf Coast ports which handle more than half of American container volume and about US$3 trillion in annual international trade.
These are enormous figures, and the local private sector is already signalling that import costs will likely shoot up even further during the peak Christmas shopping season.
Within the American economy, the strike would occur at a time when retailers are reportedly scrambling to complete their importing inventory to assure consumers their desired items will be available.
“A port strike would paralyse US trade and raise prices at a time when consumers and businesses are starting to feel relief from inflation . . . . There’s no easy Plan B. While shippers have already begun diverting some cargo to the West Coast, capacity for such alternative options are limited,” assessed Erin McLaughlin, a senior economist at The Conference Board.
These developments have again highlighted the island’s vulnerability to external shocks such as geopolitical tensions, pandemics, and climate change activity, which have all meant bad news given the effect on prices and the constraints on people’s purchasing power.
The pandemic period is often used as a reference point when discussions are had about the need for Barbadians to take the matter of food security more seriously.
During the 2020 to 2022 period, attention to agriculture was heightened. So focused were the discussions that the Caribbean Community (CARICOM) developed its 25 by 2025 agenda.
A communique from the last Heads of Government Conference in St Georges, Grenada, suggested that regional governments were still focused on reducing the food import bill by 25 percent by the year 2025.
It outlined that by the first quarter of 2024, CARICOM member states had recorded a “30 per cent achievement of targets set and a 12 per cent decline in real imports, equal to a quarter of a billion dollars”.
We know that statistics can be a dangerous thing, but what it suggests is that our leaders are aware how exposed our populations are to the sudden changes in global affairs and producing more of what the region eats is a valuable protective barrier.
Despite our regional efforts, there is much more than needs to be done to insulate consumers from the external shocks.
Commentary on the situation by the Barbados Manufacturers’ Association executive director Shardae Boyce should serve as an important touchpoint on which to spur urgent action.
“Our members depend on inputs from around the world to manufacture their goods and we’ve put them on guard [this] impending strike [may cause] some disruption . . . to shipping. Our members have been very proactive during the pandemic, and they have certainly learned a lot from the pandemic in terms of storing their inputs to ensure that they do not run out. However, we are not immune from things like this,” she stated.
On the other hand, Norman Rice, the president of the Transportation Intermediaries put it this way: “If this strike happens, it will have a serious impact on the supply of goods to this region. It will result in delays and shortages of goods being landed. In addition, there will be an impact on costs as we will see the shipping lines imposing congestion surcharges and repositioning surcharges to ports that are not affected by the strike. These surcharges will result in increased landed costs, which in turn will be passed on to the consumer.”
What we in Barbados are witnessing is a repeat of a situation from which we have the capacity to extricate ourselves by getting serious about food security.
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