With the government employing tens of thousands of youths in a bid to reduce unemployment, the cost of groceries has risen by about 10 per cent, and the food inflation is expected to become even worse with the recent standardisation of salaries.
In the last 12 months, despite strict warnings from the Public Authority for Consumer Protection (PACP), shoppers have noticed a steady rise in shelf prices, as they fill their trolleys. They would know better than the inflation figures would suggest because higher grocery bills continue to cut deeper into their paychecks. The PACP may be fighting a losing battle with giant food chains dictating the terms, and not budging an inch.
There is no justification for this increase but retail managers are taking advantage of the new wealth in the hands of civil servants, and job generation for graduates.
The employees in the ministries feel that they are not able to avail the benefits of pay rise, originally intended to add to their savings post-retirement. Fresh employees now face the prospects of spending more to buy the same stuff. But the real casualties are employees from the private sector who receive a humble increment of three to five per cent per annum. Official statistics show that workers in the private sector outnumber the civil servants eight to one, taking into account both Omanis and expatriates.
Food distributors and supermarkets cannot justify the hike simply by asserting that they have increased the wages of their employees. Most of their workers would tell you they did not get a pay rise ever since they joined. Supermarket bosses would tell you that they are squeezing their profits very tight to keep the price hike marginal, but consumers know that it is not true. Their shopping bill is rising every quarter even though they have been buying the same amount of food.
Expariates on the lower rung of the pay ladder are hit the most by this unjustified hike in food prices. They feel the pinch when they see a big chunk of their already strained wages going towards the food bill. According to the PACP statistics, more than one-third consumers in the Sultanate are expatriates. If food prices increase to unprecedented levels, expatriates will do a quick calculation to decide if they want to continue to help the country's progress.
Oman will no longer be a favourable choice for the much needed expatriates because the private sector would not be able to compensate the wages to keep pace with regular rise in food prices.
On the other hand, those Omani families which are crossing the poverty line, thanks to the government's initiatives, will revert to their original social status.
Steep rise in food prices also has a deep connection with malnutrition, according to World Health Organisation (WHO) statistics. People from the lower income group are forced to compromise their health due to lack of food. The development of children is hit severely as their parents cannot afford food of good quality, according to the WHO. Talks are on about the government subsidising the prices of basic food items for Omanis such as rice, sugar and flour, similar to the pattern followed in other GCC countries.
However, subsidising is not a permanent answer. It will only add to the profits of food distributors without any justification. Subsidies also have a way of draining the state coffers and preventing the much needed fund from being spent on infrastructure. Instead of subsidising the prices of food articles on the shelves, the government may need to consider spending serious money on growing more food in the country by investing in local farmers. Locally grown fruits and vegetable cut down the import bills and taxes. The government needs to encourage local production of meat, eggs and milk as well.
Local harvests will give consumers a choice for cheaper products compared to expensive imported food. It is also a matter of national pride to see