JEDDAH/Riyadh, 27 August 2005 — Interior Minister Prince Naif has instructed all regional governors and other administrative officials to take effective measures to prevent price rises of essential commodities following Monday’s royal decree raising salaries of public servants.

He urged the governors to take appropriate steps to prevent traders from exploiting the royal gesture. Municipality and Commerce Ministry officials have been asked to monitor markets to take action against violators.

The prince’s directive comes amid complaints that prices of certain goods, especially foodstuffs, had gone up 15 percent in some shops, raising concerns about inflation among both Saudis and expatriates.

Many Saudis and expatriates including economists had expressed fears that the pay increase would cause inflation and price increases of essential commodities and had called for measures to prevent that.

According to Asharq Al-Awsat, a sister publication of Arab News, the Ministry of Commerce and Industry has received a large number of calls from Saudis complaining about price rises, in some cases reaching about 15 percent. And the ministry responded by announcing that its inspectors will carry out surprise checks to monitor prices and take deterrent action against those violating the regulations.

Mazen Abdullah, secretary of the committee for combating commercial fraud, said most complaints were about hike in prices of foodstuffs, cement and fodder. He said prices of sugar bags had gone up from SR15 to SR25 while small gas cylinders rose from SR15 to SR21.

The committee sends squads to inspect shops and markets when it receives complaints and take punitive measures against violators. The ministry’s toll free number to inform about price increase is: 800 1241616. It will accept such calls from 8 a.m. to 2 p.m. on official working days and from 9 a.m. to 9 p.m. on Thursdays and Fridays.

In a recent press statement, Finance Minister Dr. Ibrahim Al-Assaf also emphasized the need for monitoring markets to prevent price rises. However, he said the increase of prices would be “very limited” in an open economy like the Kingdom.

Labor Minister Dr. Ghazi Al-Gosaibi said yesterday that the minimum pension given to Saudis contributing to the social security system of the General Organization for Social Insurance (GOSI) and their heirs would be increased by 15 percent from the first of Ramadan (Oct. 4). The GOSI has also raised the minimum monthly wage limit for mandatory contribution to the pension scheme from SR1,200 to SR1,500.

Meanwhile, more companies from the private sector have announced a 15 percent salary increase either for Saudi employees or for their entire staff, including expatriates, in response to the call from the government.

Speaking on behalf of the Board of Directors of Aldrees Group of Companies, Abdulmohsen Aldrees said they have decided to grant a 15 percent pay rise for all their Saudi employees in line with the royal decree.

A similar increase was announced by the Riyadh-based Arab Sea Co., whose general manager Muhammad Al-Suhaibani said the measure was intended to underline the private sector’s support for the government’s progressive policies.

In Dammam, Nasser Al-Melhem, general manager of Muhammad Saleh Al-Melhem Co., sanctioned a 15 percent pay increase for both Saudi and non-Saudi employees.

A similar gesture was shown to all its employees by Toon City Jeddah, a recreation firm, whose owner, Sulaiman Al-Abdullah, hoped that the move would have a positive impact in boosting productivity and creating a healthy environment at the workplace.

The Al-Baha Chamber of Commerce and Industry also declared a 15 percent rise in the salaries of its Saudi employees. The chairman said the decision reflects their spirit of solidarity with the Kingdom’s leadership.

Welcoming the royal decree and the response it generated from the private sector, Abdulmohsen Al-Murshid, a Saudi journalist, told Arab News that as a goodwill gesture the private sector and also government organizations should give at least a five percent increase in the salaries of their expatriate work force. “After all, they are working for the same organizations and contributing to the economic development of our country.”

Said Al-Shaikh, chief economist at the National Commercial Bank, played down any negative effects of the pay rise, although prices were expected to surge, especially in terms of services provided by the private sector. He said that overall “it will have a positive influence on the Saudi economy.”

The wage increase, Al-Shaikh added, would encourage the private sector to boost productivity, give a shot in the arm to the economy and help create more jobs. It would also improve living conditions, especially of the poor and middle class citizens.