Economic burden [Archives:2007/1067/Opinion]

July 12 2007

By: Awatef Al-Shara'abi
What is the most recent change in the international pricelists as many people speak about? Their talk about changes in the international pricelists may or may not convince citizens that the geographical factors and rapid growth of world markets are among the reasons behind price hikes. Anyway, the ordinary citizens understand that any international price rises don't continue unchecked compared to the local price hikes that keep on skyrocketing in a daily basis and a dramatic way. Stupidity of consumers in most of the developing countries is one of the reasons behind price hikes as they don't attempt to rationalize their consumption of foodstuffs and other commodities. In addition, heads of households don't care for selecting their necessities according to their purchasing powers and regular incomes.

At the level of small families, individuals may find numerous alternatives to any unavailable commodities in lieu of waiting for the end of the deadline, which is set by monopolizers of certain products, and then buy them with higher prices. Lack of awareness and education in this area constitute one of the concerns among consumers, whose sufferings exacerbate over time.

Here, we concentrate on two primary reasons behind price rises and the poor living standards in several countries. These reasons are represented by the growing demand (the purchasing power) supported by the rising supply of cash in the economy while at the same time, there is a stability or reduction in the macro production of commodities and services, plus the increased production costs including electricity and water bills, facility rents, taxes and so on. Despite all this, the production costs continue increasing in the developing countries, particularly taxes, which greedy tradesmen use as a justification to monopolize certain commodities and raise prices.

No doubt that tradesmen exercise monopoly of commodities that helped prices to skyrocket, plus the primary factor represented by the rising purchasing power as a result of increased wages due to developments and changes that took place in the economy. All these phenomena are symptomatic of export of oil and the attempt to bridge the big gap between incomes and price levels via raising wages.

The supply of local currency doesn't exist in abundance except in the Gulf States, and this in turn causes the greatest economic burden, which is the inflation or the skyrocketing prices as a result of the increasing purchasing power in these countries. But the persisting problem in the majority of the developing countries is that of the low purchasing power against foodstuffs and products with expensive, medium or low prices with poor quality in the absence of trade competition and the unavailability of alternatives to various commodities and products with varied pricelists. These pricelists are supposed to be stabilized and announced periodically. But, due to the lack of rationalization of consumables and the presence of monopoly climates, prices of foodstuffs continue to increase.

Additionally, thanks to the indifference of the concerned governmental authorities and lack of consumer awareness, which, if it exists, helps consumers be aware of what they need, what the basic necessities are and what they should buy from the list of products and services. Sometimes, consumers are found to rush for buying commodities that led to spreading many economic diseases such as poverty, inflation and prohibitive prices, which will not stop at any level as long as consumers are still unaware of their top priority necessities and at the same time the government agencies as well as the NGOs never direct their efforts and practical strategies toward curbing the spread of economic diseases and citizens' sufferings.

Source: Al-Thawra State-run Daily