The government decision to freeze fuel priceshelped curb the galloping rise in the Consumer Price Index (CPI), which measures inflation in the country, declared Rubén Arriola, from the ‘Gestor al Consumidor’ Consultancy, on the program This week.
For several weeks, the government of Daniel Ortega and Rosario Murillo has frozen Sunday increases in fuel prices in the country, details not known of the tax engineering who is behind that decision.
Arriola said that if the basic basket had maintained the trend forecast for the first half of this year, its current price should be 18,300 cordobas, “if the weekly freezes on oil derivatives had not occurred.” Instead, the Consultant calculates its cost at 17,270 cordobas, which differs slightly from the 17,219 that the Nicaraguan Institute of Information for Development (Inide) places it at.
All in all, this increase of more than 900 córdobas “makes it very difficult for consumers and users to access this basic basket of 53 products,” said the expert, warning that the family basket must be updated because the basic basket now it is more expensive, because households spend more money on personal hygiene products, due to the covid-19 pandemic.
Arriola said that food products that have become more expensive are rice, beans and corn, in addition to sugar and bulk oil, forcing families to reduce their consumption to make ends meet.
The expert reported that the Consultancy tried to influence the evolution of prices, sending a letter to the Ministry of Industry, Development and Commerce (Mific), in which they requested that the basic basket not be taxed. “With tax reform many items were taxed, including food and cleaning products, which caused their price to rise automatically, hitting the purchasing power of consumers”.
Neither the INE, nor the Mific
Before the decision was made to freeze fuel prices, they had a vertiginous increase that generated a wave of complaints from the population who claimed not only because of the high prices, but also because there was the perception that they were being scammed. when buying the gas cylinder for cooking.
The general complaint with LPG is that “the weight is not real, that it lacks two to three pounds, and this makes people continue to complain”, because the INE does not supervise butane gas companies, as mandated. Law 277, Hydrocarbons Law. “Before it was done quarterly, but now a long time passes without this work being done in defense of Nicaraguan consumers and users,” revealed the defender.
The other entity that should watch over the interests of citizens, such as the Directorate for the Protection of Consumers and Users, “does very little”. The expert’s thesis is that it has little staff and little budget, so the Consultancy ‘from the Manager to the Consumer’, does “what the Law allows us”, protected by the Citizen Participation Law and the Political Constitution.
“We were created and were born to support the struggle of consumers, especially with the issue of basic services, electricity, drinking water, cardholders, problems with banks… we have 220 claims for different topics: high consumption of electricity; lack of public lighting, failure of the company to install new electrical installations, new metering equipment, or to read the meters”, he listed.
One of the moments in which the absence of the State was most notorious was during the storm caused among the poorest strata, by the high prices reached by cheese.
“That was a time for the Mific, ex officio, to enter to investigate and make inquiries, based on Law 842. The Mific has the authority to carry out this investigative process, but ‘he rested on his laurels,’ using the excuse of the free market. Yes, there is a free market, but we cannot fall into speculation and illicit hoarding”, he pointed out.
Arriola relates that “in the days after the rise in cheese, we saw many producers who had hoarded the product, and were selling it in the old town of Managua. That means that the director of Diprodet, Freddy Rodríguez, did not take action on the matter, although it was the right time for the Mific to wash its face. Today the cheese is low. It is true, but it is because we are in the rainy season.”
The statistics of the Central Bank register a growth of 4.7% as of February, and an increase of more than 20,600 Social Security affiliates. Does this translate into any economic improvement? Is there any evidence of this growth?
I don’t see any evidence of that growth. It may be that they have hired more workers in the State. Maybe that’s why, but we see that the migration to the United States or Spain, have increased vertiginously, as well as the closure of companies. Let us remember that the economic and social crisis has been hitting us since 2018. We have already completed four consecutive years of economic crisis. Companies were closed. Others worked at half throttle. Others have left, and covid-19 came to finish us off, because more companies closed, others started working part-time, and that is reflected in the unemployment rate.
Data from the BCN say that the Nicaraguan economy grew 10.1% in 2021, although various international organizations placed it at 8%. Does it mean that there is no relationship between the macro, and the behavior of consumption and employment?
If you visit the sidewalks of Managua at noon and in the afternoon, you will see entrepreneurshipwhich is what a lot of people are now called -technicians and professionals- who dedicate themselves to other businesses, to other tasks that have nothing to do with their academic level: sales of fast food, roast chicken, nacatamales, of soup, and many canteens that proliferate on the sidewalks, both in the capital and in the interior of the country, because the unemployment rate has skyrocketed, making it difficult to pay for basic services, electricity, water drinking and telecommunications.
