The exorbitant price rise in essential commodities and rentals have made the lives of Saudi Arabian citizens as well as the migrant workers miserable. It may be contradicting to the image of oil rich Saudi Arabia which is considered to be the most prosperous nation among the Gulf Co-operation Council (GCC). Surprisingly, the Saudi society comprises of middle and low income group and the prevailing high inflation has made even subsistence difficult for the citizens.
Saudi Arabia is enjoying an unprecedented economic boom fuelled by record oil prices, yet the food prices and space constraints are putting pressure to the economy. The latest figures put inflation for December 2007 at 6.5 per cent, up half a point from the previous month and it should be remembered that it was just 2.2 per cent towards the end of 2006.
GCC’s recent agreement of common market access will also put more pressure on the markets in the coming years. Some economists point out that Saudi Arabia’s over dependence on US dollar is one of the reasons for the food price hike. Incidentally, the country heavily relies on food supplies and other essential commodities through imports. Experts believe that revaluation of their currency, riyal against dollar may bring about some relief to the already stretched commodity price market.
The economists bring forth various reasons but a poor man to fill his child’s belly is of primary concern in an atmosphere like this. The only relief the citizens have got so far is subsidies on imported rice and baby milk. Saudi Arabia’s king Abdulla has instructed the country’s economic planning authorities to take remedial measures on war footing to contain inflation. Last October the Shura, members of the king’s advisory council convened to discuss national wage hike to compensate for inflation.
As a result, last week the government has declared a salary hike from 20% up-to 80% for healthcare workers. The citizens and migrant workers expect that the intervention by the king would bring either the inflation down or they would be moderately recompensed through some channel.