Falklands : Credit Crunch - It's Time to be Practical
Submitted by Falkland Islands News Network (Juanita Brock) 19.01.2009 (Article Archived on 02.02.2009)
However, our business patterns and thinking need to change before any kind of loan would be successful.
CREDIT CRUNCH - IT’S TIME TO BE PRACTICAL
An Editorial by J. Brock (FINN)
Banks are going to have to take another look at what businesses they need to lend to as the climate is poor for borrowing money in manufacturing – for example - because people may not be able to buy some products on completion.
Firstly, I think that banks should protect peoples’ savings – the present economic situation is not their fault. Savers have worked hard and put money away for pensions - for education – for homes so that they could have security and/or assets without having to go into debt.
In this present climate loans should to go to entities that are producing the basics like food so that prices can come down far enough for people to afford it. There are masses of people who are going without basic needs like food, warmth and shelter as a result of the financial mess we find ourselves in.
This leads to a very unhappy and possibly volatile society. The Romans used bread (and entertainment) to great affect in smoothing the edges of a poor economic situation. And, there’s nothing to stop us from analysing this to see if some lending can go temporarily to food and entertainment industries until we get on our feet.
However, our business patterns and thinking need to change before any kind of loan would be successful. We are thinking and acting too much like we did when the economy was good by using the same methods and techniques that messed us up in the first place. Perhaps a change of gears and a lesson in prudent prioritising would do us all a lot of good.
Instead, people who have means are still acting as if the economic crisis will end tomorrow. This has to change.
Here in the Falklands people are still reeling from an article in Penguin News about the placement of 2.5 tonnes of fresh produce on the rubbish tip because the farmer could not sell his product to a certain market and didn’t shift enough of his tomatoes when he halved the price.
People could have been put to work processing tomatoes, peppers and cucumbers for the needy and/or distributing them to a place in the centre of town – even the charity shop – something – anything - but throwing good food away.
The experiment of cutting the price in half for one product – tomatoes - had strings attached in that people needed to travel out of Stanley during the shop’s normal business hours to buy the produce. The two-week experiment worked poorly for the farmer because the numbers of additional customers realised 15% with the price down by half and this was not what he had hoped for.
He didn’t take account of the elderly, for example, who are house-bound and didn’t know of the two-week deal, or people without transport. We all can’t eat fresh tomatoes until they come out of our ears but can preserve them for future use. For example, this farmer could have stewed and frozen them for sale later.
Granted, the goods belonged to the farmer and he could do with them as he pleased but we are still paying around 50p each for a medium sized tomato in these difficult times. He could have got a good reputation and some return on the £7500.00 he consigned to the tip by being more community minded. Regardless of the reason for over-production, disposing of food on the tip spoke louder than the Argentine economic terrorism that caused his problem. A good reputation is also worth money and calling the media in to record the dumping of eatable food, in my opinion, is not great for the farmer’s image.
Not all the affects of the economic down-turn have yet reached the Falklands but it doesn’t mean we shouldn’t take this into account when making future plans for business, education, assets or just plain living.
My own prediction is that we will get through this with flying colours but must change our living, spending and saving habits as well as becoming more community minded in order to sustain economic growth after this is over.