Biggest dose of its kind expected to raise fuel and foodstuff prices in Yemen next month:Feared dose coming [Archives:2003/697/Front Page]

December 25 2003

Mohammed bin Sallam
Reliable official sources told Yemen Times that the prime minister has announced the approval of the long-awaited and feared economic dose that would affect all walks of life in the country will be effective next month.
The sources added that the recent hike in prices of certain goods was relatively insignificant and was intended to measure the public response to a greater hike. The government, according to the sources, wants to see how the public would react to such smaller doses before it puts into implementation the new dose, which is expected to raise the prices of virtually all goods in the country, early next year. The upcoming dose will be the biggest of its kind since the government started its economic reform program in 1996. The dose, which is expected to ignite public outrage, will include an increase of 50% to prices of all oil products including benzene, diesel, kerosene, etc. This hike is expected to affect the prices of all other basic commodities, whose prices may be doubled or tripled.
On the other hand, the government expects to compensate citizens by raising public employees' wages by 100%. The government will also be reducing customs tariffs to a maximum of 5%. Based on this step, the customs tariffs of imported vehicle and computer-related imported material will be exempted.

Parliamentarians protest
But parliamentarians have already sensed this intention before the actual dose is implemented. In sessions held last week, a heated debate was witnessed in the parliament about the recent sudden increase in wheat and bread prices, which was then followed by a wave of price rise in of other commodities.
Parliament members blasted the government's inability to control the rise in prices and hold accountable the merchants who took advantage of this rise. This comes after the parliament canceled the decision to form a committee specialized in trade and industrial affairs, which will study this sudden increase and propose appropriate actions to be taken by the government to stop it effectively.

Sales tax opposed
Furthermore, the parliament also protested the proposed bill to impose a new tax of 10% on sales. This law received furious opposition from the public and trade community. The opposition forced the government to delay the project until 2004, but this postponement did not prevent the launching of the 'one million signature' project, which aims at collecting the signatures of one million persons opposing this bill.
Economists believe that the sales tax will definitely have a negative impact on 90% of the population, which comprises of 18 million citizens, who live below the poverty line.

Bakeries closed
Meanwhile, the government acted last week in closing down some bakeries that were told to have not followed standard regulations on quality of bread production.
However, bakery owners across the country had requested the government to halt the increase of wheat prices, which as they claim, caused tremendous losses to their businesses and made them raise bread prices one fold. Prices of wheat have steadily went up recently from YR 2,400 to YR 3,000.
Al-Shumou Weekly newspaper said in its last issue that a number of bakery owners said that wheat parcels seen in the market recently were actually part of US aid to Yemen, and the government cannot in any way attempt to sell it or allow others to do so.