Prescribing Perception for the Pain of Prices
Zouk- la se sel medikaman nou ni!!

Lately, I have been finding much enjoyment in weekly tussles with a newly minted political friend. The young man, sharp of sardonic eye and wit; born under the right star; filled to the gills with contending political pedigrees; passionate and ceaseless in conversation, is named Chris. And we’ll leave it at that.
Here is the anatomy of our unending argument: Chris believes that perception is the most powerful of political factors; I say it is merely a short-cut to the truth, and truth is the ultimate tool of persuasion and conquest.
Chris has all the facts of hard evidence on his side. I have the promise of heaven. Chris is relentless. His list of the victims of perception is chronologically impressive: Kenny Anthony, Portia Simpson, John Howard and now, Owen Arthur - gone, baby, gone.
Arthur is freshest on the mind. Here was a man who’d tried his darnednest to convince his Bajan voters that it is leadership that counts. He was especially swollen with the pride of St. Peter over his record of managing Barbados: wholly non-ideological, purely technocratic, pragmatic and rational. Arthur’s stewardship from 1994 had been widely proclaimed as a success story. Barbados had largely escaped the attendant economic crises of the recent past. Following the recession of 1991-1993 the country became relatively free of the balance of payments, foreign exchange, external debt and inflationary problems that doggedly followed other Caribbean countries. His opponent on Election Day, David Thompson, had taken the country into the dreadful embrace of the IMF when the Tom Adams lookalike was last in charge of the country’s finances in 1994.
But, like the Saint Lucian Kenny Anthony, the Jamaican Portia Simpson, the Aussie John Howard, the record of great leadership in economic management could not stand up to the onslaught of insiduous perception fed a change-thirsty public by a new breed of political snake-oil salesmen, pollsters and assorted smart-men.

Feeding the Perception
Feeding the perception. The brand new phenom of our internet age. Perception is the refuge, the rock to which Stephenson King, as the archetypal flambeau, has always run. Confronted by the grave and complex economic reality that has finally caught up with Saint Lucia as a small country in a big world, he has resorted to the illusory perception that he has found favour with Saint Lucians in his government’s response to the commodity pricing crisis.
So today I have prepared a sword for Chris. I want to lay on him the weight of my construct of reality. It is as follows.

The Economic Philosophy
The fundamental economic philosophy that guided the monitoring and management of commodity prices in Saint Lucia during the administration of the Labour Government from 1997-2006 ensured a price policy that aimed at suppressing price spikes on consumers, particularly the most underprivileged persons in the population.
Whatever method was employed, the Labour Administration seemed mindful that increased consumption of basic products would not result in a lowering of nutritional and reasonable living standards.
Today, Labour and Flambeau supporters alike all recognize that we are firmly in the grip of a commodity price crisis. Since 2000, international oil prices have risen by over 350%, and the IMF’s food price index has increased by 200%.
But whatever the externally propelled pressures that are forcing prices through higher and higher ceilings, the overwhelming and singular responsibility of any self-respecting government is simply to mitigate and cushion the impact of higher prices on consumers.
An examination of the pricing-policy management record of the Labour Government during the decade of 1997-2006 provides strong evidence of its adherence to such a principle.
If one considers, as the most poignant example, the management of the price shifts in UL Gasoline (ULG) – a highly economically impactive commodity - the record would reveal that in the near ten-years of 1997-2006, the Labour government discharged incrementally over the period an aggregate ULG consumer price increase of 41.04%. This was in response to an aggregate increase of 360% in the average basket price of a barrel of crude oil.
But now in the space of a single year, this present administration has imposed a crippling increase of 34.20% on the pump price of a gallon of unleaded gasoline; a staggering increase of 45.7% on diesel; and devastating increases of 23.5% and 113.46% on LPG and Kerosene respectively.

The Bikini Address
The Bikini New Year Address by Prime Minister King was significant not for what was revealed but for what was concealed. Beneath the clichéd platitudes of challenges and responses, and the usual hackneyed promises of deliverance, lay an unstated admission that already, King has lost his way, and that the management and deployment of government revenue, both recurrent and capital, is in shambles, eight months into his inherited government’s first full fiscal year.

Open-eyed Saint Lucian observers will have noted the rapid deterioration of infrastructure and our rural communities, and would have heard the rumblings of disaffected workers and contractors on issue of late salaries and payments reflecting the shaky state of public finances. For all the pre-election bullshit of fiscal prudence, and three hundred million dollar cuts in recurrent public expenditure, the IMF January 2008 Country Report on Saint Lucia projected that for 2007, Central Government debt and public sector debt rose sharply over the 2006 levels.
In his address there was much ado by King about the consumption tax subsidy of $15 million granted to the petroleum sector over the first four months of 2007, when it is a well known fact that governments employ as standard practice the strategy of using the consumption tax mechanism as a tool of trimming and cushioning the effect of high market-volatility and frequent petroleum price bumps. If, to quote Trevor Philip we do the maths an annual $45 million ease on the fuel consumption of 60,000 vehicles, in the form of consumption tax subsidies, can be conceptualized as a rebate of $750 per vehicle owner. The collective political thank-you from a grateful citizenry could well come in handy, later.
Those who can tear themselves away from the quarrelsome talkshows should revisit, for the purposes of comparison, the various addresses of former Prime Minister Kenny Anthony on petroleum price adjustments over the period 2000-2005. In these policy statements, readers will find evidence of the then government’s incremental, judicious adjustments and responses to increases in imported fuel prices.

The Questions
One morning earlier this week, in the orange-coloured oasis of a bar across the road from the Vigie sable desert, three refreshingly intelligent youngsters tossed a question at the former Labour PM as he awaited his vehicle being washed: What would have been the response of his government to the pressures of escalating commodity prices?
His answer was willing and eager. An SLP administration would have pursued an aggressive strategy to protect and shield consumers and the productive sectors from cost increases.
More questions followed. Are St. Lucians satisfied that King and his team have:
• creatively and imaginatively pursued all the options available to lower duties;
• encouraged retailers to lower price mark-ups, given preference to energy-efficient and environmentally preferred products;
• established a more vigilant monitoring of prices for consumer protection;
• presented an outline of a comprehensive energy policy;
• developed measures to transform and modernize the retail and distributive sectors;
• included, as one criterion in arriving at price control levels and minimum guaranteed prices, the nutrient-cost concept so as to provide incentive for the consumption of more nutritious products.
• changed the orientation and operation of price control and subsidy programmes.
Elsewhere in the region, other CARICOM governments have attempted to combine food price control with a consumer subsidy on a graduated scale according to income position and more liberal price control levels are being effected to ensure that those employed in food distribution do not experience hardships.

The Fallout
Sadly, there is a nagging feeling that the worst is yet to come. Among our citizens flows a worrying anxiety about the inability of the King administration to expertly manage the growing crisis. Already, electricity consumers are feeling the impact of increased electricity bills; the transport sector may soon stall as drivers have emphatically rejected the government’s fuel price rebate; UWP victimization has now laid its claws on all classes and colours of Saint Lucians – red, yellow and now blue. A televised electronic poll concluded that nearly 90% of surveyed Saint Lucian consumers consider that they will be unable to bear the ruinous price increases in fuel.
The current prices crisis demands a leadership response that requires the enactment of anti-gouging and price fixing legislation. Anything less will mean near inevitable disastrous consequences for our fragile imported energy-dependent economy.
It is the considered view of many that the current round of hardships which is being unleashed in the wake of high consumer prices can be significantly mitigated if appropriate and adequate responses are made over the coming years by government, business houses, and individual citizens.
In a real sense, Saint Lucian consumers and businesses have become the victims of the less than aggressive creation and implementation of appropriate government policies. One such deficiency is the government’s position on the Petro-Caribe Agreement. Through the agreement, Venezuela offers special low prices and payment conditions for oil to Caribbean countries. PetroCaribe has already begun to distribute crude and refined oil products to some Caribbean countries at cheaper prices and at concessionary conditions more favourable than other dealers in the area.

The Future
What of the immediate future, and what are the issues that need to be managed? The reality is continuing upward trends in the international oil price and sharp rises in direct living costs via transport and electricity increases. These trends also mean indirect price increases across the board as businesses of all kinds try to maintain profit margins.
As the three friends climbed into their SUVs, one could sense the question tugging at their minds: do Stephenson King and his fellow Ministers possess the skill, vision, knowledge and rapport with the private sector to obtain the desired degree of cooperation with consumers and business enterprises in order to strike a balance between enterprise profitability and consumer satisfaction?
The truth may not matter as long as the snake-oil salesman can sell gullible folk the prescriptive perception that everything is alright. Sa con sa!