Soaring GCC inflation hikes trade offences

(REUTERS)   

 

 

Soaring inflation rates have given rise to fraud and other trade offences in the Gulf as regional states step up the fight to bring prices down.

 

Most members of the six-nation Gulf Co-operation Council (GCC) have reported a rise in offences over the past few months, including manipulation by traders, smuggling of food products, over-pricing and monopoly.

 

The surge in such offences coincides with a sharp increase in rents and food prices, which are blamed for most of the inflation problem that has hit the oil-rich region hard and prompted unprecedented measures by some member countries.

 

Since the start of this year, UAE authorities have reported at least 50 cases involving over-pricing of cement and other building materials, sale of food products without announcing the real price and illegal storage of items with the aim of influencing prices and making higher profits.

 

Oman said it had uncovered 24 fraud and other offences in just one month while Qatar, which is reeling under the highest inflation rate in the GCC region, reported 73 cases of fraudulence, manipulation and over-pricing in March. Kuwait also said there were at least 20 fraud cases during February and March.

 

Although its inflation problem is still less serious than that of Qatar or the UAE, Saudi Arabia has emerged as the main victim of illegal practices that mainly involve smuggling of food and other products to areas in the country where they fetch higher prices.

 

While they have prompted stronger official action, these surging offences have created confusion among UAE authorities about their competency.

 

“There is no more co-ordination among the competent authorities and departments while the role of municipalities in monitoring prices is diminishing,” said Hussein Lootah, Acting Director-General of Dubai Municipality. “This has negatively affected efforts to control prices. The problem could worsen because the responsibility to monitor and control markets has become scattered. The Ministry of Economy is now involved on one hand and the numerous consumer protection societies on the other hand. They are interfering without any co-ordination and without the proper tools to control prices or even implement the necessary policies to solve the problem or calm down the market.”

 

In Oman, the country’s prosecutor said he had handled 24 trade fraud cases and associated offences in March. These included 23 cases involving manipulation of cement supplies with the aim to influence prices. Another case involved wheat flour fraud, while other smaller cases involving food were settled outside court. “Most of those arrested were Asians who sold the cement bag for OMR4 [Dh38], which is far higher than the official price,” Hussein Al Hilali said.

 

In Qatar, the official media reported that the Ministry of Economy and Commerce uncovered 79 fraud cases in March. These included 58 cases involving failure of dealers to announce prices, seven cases of selling bread at lower weight, one involving failure to comply with bread production standards and other cases.

 

In Saudi Arabia, by far the largest and most populous GCC member, at least 200 cases involving fraud and smuggling have been reported over the past three months. The smuggling activities by local dealers involve storing of wheat and other food products to sell them in other areas of the kingdom at higher prices.

 

Other cases included selling eggs, chicken, sugar, rice and other foodstuffs at prices higher than those set by authorities. They also involved failure of wheat traders to give enough supplies to bakeries and sweet factories, causing product shortages and consequently, further price increases.

 

 

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