Labor fees raise prices



JEDDAH: ARAB NEWS

Published — Saturday 15 December 2012

Last update 15 December 2012 1:27 am

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The Consumer Protection Association (CPA) reported a rise in consumer prices after the Ministry of Labor implemented its fee on foreign labor.
The chief executive of the Consumer Protection Association, Nasser Al-Toam, said his organization noticed prices rose in the wake of the Ministry of Labor’s decision to charge businesses an annual fee of SR 2,400 on each foreign worker.
Al-Toam said: “Price hikes were observed in some women’s shops, in the construction sector, and at car wash stations.” The CPA is currently reviewing these cases and will follow them up and report on the findings, he said.
“The decision to charge a fee on foreign labor was taken in haste and it will have negative implications for the consumer, as well as psychological, social and economic effects,” he added.
“If we look at the economic impact of the decision, inflation will impact the whole business sector and the consumer will have to bear the burden of the additional SR 15 billion in fees,” he said.
He demanded human rights organizations and the Shoura Council to intervene and challenge the charges.
“Most merchants have already begun to raise prices, while others say they cannot continue to bear the burden themselves. As a result, the consumer will no doubt have to pay for this decision,” he added.
Al-Toam said: "We are experiencing a decision-making crisis where no parties are consulted. There should be a gradual implementation of any decision like this, as well as alternative options. The ministry acknowledges some businesses do not employ Saudis at all, so I wonder why they are not subject to the same decision? Why do we deal with a wrong-doing with an even greater one?” he said.
The ministry will look into compensating those affected, he said, but this is not the right way to address the situation. No standards have been defined around this decision and will lead to corruption in some cases.
He said the decision to pay compensation is irrational and without foundation, and is just a waste of resources.
Al-Toam said various ministry departments could utilize their resources and work together to control consumer prices.
He hoped the Royal Court would intervene and freeze the decision until the impact of the fees on the consumer can be properly gauged.

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