The recent announcement of the eight percent inflation rate for November was met with some concern for the same reasons I mentioned in my Nov. 21 column where I discussed the four outcomes of inflation. Again, I say that I am not an economist nor prophet. I can only speak as a countryside entrepreneur with experience on how inflation affects business operations and growth prospects.
What I do know is that inflation that remains persistently high is not good for the short-term resilience of majority of businesses, and will hurt long term prospects for them to grow. Costs rise, sales volumes for some may shrink, and the risk of laying off personnel increases. Having said that, if the conflict in the Ukraine or near oil producing areas persists and global oil prices remain high, then we will need to check on the inflation numbers again, since this, along with food prices, constitute the bulk of family expenditures.
Thus, with the recent startling announcement of an eight percent inflation rate the immediate questions in the minds of many are: Will it extend beyond the first quarter of 2023? Since we now know that our inflation is fed by demand overpowering food supply, will the plans to boost local production deliver bumper crop harvests in time to lower inflation rates? Can we shift our transport and energy system to depend less on expensive, imported fossil fuel?
Simply put, old and comfortable suggestions, particularly those that demand short term fixes against long term change (even those passed around in social media) may not be enough to deal with new complex problems. The hard truth, therefore, is that there are no easy answers to these questions. There will be adjustment pains, and the discussions to weave solutions will be very contentious.
Nonetheless, we will all need to join the discussion and seek ways to lower inflation. I believe that answering the questions will require deepened discussions on the process of how our food is supplied and distributed and how the most vulnerable can afford food, how that is being sold, how our energy is sourced and distributed, and how our transport system is organized.
The first action should be to plant as many vegetables as we can, especially in the urban areas where prices of these commodities are higher. This will ensure that a percentage of food stocks which are grown nearby, will cost less to transport to consumers.
Condominium corporations, especially those managing medium-rise building complexes with landscaped gardens and jogging paths, can instruct their staff to plant vegetables in those areas. Those can be sold to residents and neighbors. The same staff can start producing compost from food and organic wastes to fuel the production. It takes the political will of homeowners to get it done.
Another is to accelerate the electrification of our transport systems. The lower our dependence on imported fossil fuels is, the better.
It’s time we all join the conversation, share practices and seek solutions that will bolster our resiliency against the effects of inflation. Feel free to share.