“If the public authorities have multiplied the measures to fight against the high cost of living, their effectiveness remains limited due to the lack of solid evaluations and the structural complexity of overseas economies”, estimates the Federation of Overseas Businesses which organized a conference on the subject last June. “Overseas economies face significant constraints”, underlines the document reporting on these discussions.
Geographic distance lengthens supply chains and increases transportation costs. Insularity imposes additional logistical constraints. The narrowness of markets limits volumes of activity and prevents economies of scale from being achieved.
Fedom points out the obvious : “The high cost of living results above all from an imbalance between price and income. At constant prices, it is the level of income and access to employment that determine real purchasing power. However, overseas territories have lower employment rates and higher income inequalities than in France.. This discrepancy largely explains the tensions around purchasing power and the importance assumed by the question of the cost of living.. »
The conference resulted in the definition of three areas of work to better understand this controversial subject. : a rigorous evaluation of existing regulatory systems, deepening international comparisons to identify the most suitable approaches, and finally “the implementation of coherent economic policies, growth oriented, taking into account the diversity of territories”.
