Prices
Antillean Prime Minister Emily de Jongh-Elhage’s plea to the business community to keep prices down as much as possible in this time of skyrocketing fuel prices and transport cost makes sense. The last thing businesses on the islands need is to put consumers in a position where they cannot make ends meet.
Why? Because raising prices will make the islands less attractive as tourism destinations as well as places to do business. It could also put consumers in a situation where they must either try their luck elsewhere or stop buying some of the products they had been using.
Keeping the buying power of the population as stable as possible is important in economic terms, because if it decreases too much too quickly, it could seriously affect the same businesses now asked to keep their prices at a reasonable level. One cannot expect businesses to take a loss at the cost of their own employees, of course, but if there is some financial space they could consider absorbing the increased cost at least partially, in the interest of their clientele, until the oil price and related prices stop rising.
How long that will take is anybody’s guess, but one would have to assume that things will normalise in the long run. A stronger US dollar could also improve the situation and the new US administration that takes office in January 2009 will almost certainly try to achieve that.
But as sympathetic as the prime minister’s plea sounds, her government can also do something about, for example, the excise tax on gasoline, even if only temporarily. That will cost both the Central and St. Maarten (25 per cent) Governments some money, but the positive effects on the economy could compensate that at least partially. St. Maarten’s request to reduce the turnover tax should also be considered seriously, especially because the islands are expected to take more action and assume more responsibility on matters such as law enforcement as they prepare for their new statuses.
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