I was surprised by the explanation of the director general of the Madinah branch of the Ministry of Commerce that the recent increase in the prices of several commodities had no link with the announced pay increase for government employees. The official added that the rise in prices has been going on for the past two months — since the global rise in crude oil prices which in turn increased the costs of shipping and packing. Indeed!
If the prices of essential commodities had been increased two months before the announcement of the pay increase, then why was there another increase as soon as the pay rise was announced? Does this suggest that we may expect a double rise in prices when the employees actually get the increased salary? The official added that the ministry, through its inspectors of commercial fraud, would closely monitor price changes and movements in all markets. When they observe any unjustifiable rise in prices, the concerned merchants will be summoned for explanations. He also said that though complaints from the public have been increasing, so far there have been no arrests. Since the ministry has already provided an official excuse for the price increase, it apparently will not be in a position to arrest a trader violating the rules and every trader will naturally use the excuse offered by the ministry.
While merchants attribute the higher price of milk powder to the withdrawal of farm subsidies in European countries apart from the rise in the exchange rate for euro, should Saudi consumers send letters begging European countries to reestablish the subsidies so that the price of their products do not increase in the Saudi markets? As for the increase in exchange rates, we have been hearing about that over the past two decades since car prices jumped to very high levels. The explanation given by the ministry was that it was because of the high exchange rate of the Japanese yen. Later when the yen fell, there was no change in the price of cars here.
Businessmen need not waste time thinking about justifications for raising prices; the ministry will invent even more than they need. Yen price may have fallen or gone up yet the car prices went on climbing. Traders in our country need not bother about raising prices because the ministry invents justifications.
