Lesser buying power for the dollar

Department of Commerce’s economist James Santos said the increased prices of fuel, with its domino effect on goods and services, would mean lesser buying power for the dollar, at least in the next few months.

“The dollar this year will purchase less than what it can purchase last year,” Santos said, noting how the fuel price increases have pushed up the prices of commodities. This will mean wary customers, who would be more reluctant to part with their dollars, even with retailers offering substantial discounts, he added.

An informal poll by the Saipan Tribune showed as much, with majority of the respondents saying no when asked if they are done with their Christmas shopping yet. The poll ran from Dec. 13 to 19. This reflects a national trend of people putting off their Christmas shopping to the last minute, with a majority hoping for substantial discounts as retailers become more anxious—and desperate—to get rid of their stocks.

Santos, together with Commerce Secretary Andrew Salas, advised consumers to spend intelligently, not just during the holidays but also beyond.

“When you look at what’s happening with fuel prices, it’s really controlled by a few countries,” Salas said. “Stretching your money now is buying intelligently.”

Salas also said consumers should look at what’s happening in the world. “We’re not just tiny islands surrounded by water. Everything that happens internationally affects us.”

According to him, China’s economy grows at a rate of 8-10 percent annually, while its fuel consumption continues to increase. Salas said China’s fuel consumption would even increase with the expected increase in garment production, as quota restrictions on apparel are lifted beginning 2005.

Salas said the high demand for fuel would lead to higher prices, which would have corresponding effects on the prices of commodities.

Mass transportation saves bucks

“The government should look at mass transportation,” Salas said. “We need to make serious decisions now and not later.”

Salas said his department is in the process of drafting a plan for a mass transportation system on Saipan.

He said a plan would propose tapping the existing bus operators, saying that the government is not in the position to purchase new vehicles for a public transportation system.

Santos added that mass transportation run by private companies would afford these firms a viable business venture, which would help enhance economic activities.

The economist said people could also save some money by reducing fuel consumption, and the savings could be spent on other goods.

Easily, a typical worker could save at least $500 a year in using public transportation, added Salas, who said the fares could be as cheap as 50 cents.

“I’m ready to ride the bus,” the Commerce secretary said. “We want people to commute.”

Besides, Salas said the government should create a business-friendly climate on the islands, wherein government interference on the private sector is minimal.

“We have plans to assist businesses on-island not just for this holiday,” the secretary said. He said he would recommend the establishment of a one-stop government center, which would include representatives of different agencies, to ease the permitting process.

Salas also said he would recommend to the administration to get rid of six-cylinder vehicles and, instead, use smaller, four-cylinder cars.

Using his own pickup truck as an example, Salas said he spends about $42 just to fill his gas tank to full capacity. Sometime next month, Salas would trade his truck for a smaller car. “We need to live within our means,” he added.

While the celebration of Christmas has been highly commercialized, Salas reiterated that consumers should spend their money intelligently. “Don’t forget the true meaning of Christmas,” he added.