Kingdom Takes Steps to Check Price Rise

Kingdom Takes Steps to Check Price Rise
 
JEDDAH, 6 May 2008 — Saudi Arabia yesterday adopted a series of important measures, which included plans to invest in agricultural and livestock projects in foreign countries, and establish a holding company to manage such projects, to curb rising commodity prices and ensure food security.
“The Council of Ministers approved long-term and short-term arrangements for the adequate supply of essential commodities and to control their prices in the local market,” Culture and Information Minister Iyad Madani said after the Cabinet meeting at Al-Yamamah Palace in Riyadh.
The meeting, chaired by Custodian of the Two Holy Mosques King Abdullah, also set out mechanisms to implement the program adopted by the government earlier this year to control prices, the Saudi Press Agency said. “The new measures are aimed at reducing the financial burden caused by the big jump in prices of essential commodities as well as agricultural and animal products,” the Cabinet said. It urged the Ministry of Commerce and Industry to prepare a comprehensive study on the Kingdom’s future food requirements.
The new measures come after inflation in the Kingdom hit a new record of 9.6 percent last month. Saudi Arabia has already cut customs tariffs on food such as frozen poultry, dairy products and vegetable oils from 20 to five percent.
Levies on building materials such as paints, gypsum, electrical cables and plastic pipes were reduced to five percent while duties on wheat products were completely eliminated. The government then introduced subsidies, cost of living allowances and welfare payments to help citizens cope with unprecedented price hikes.
The Cabinet also disclosed plans to establish new warehouses by the private sector to store foodstuffs and directed the Ministry of Commerce and Industry to coordinate with other government agencies to allocate land for the purpose. The meeting instructed the ministries of Islamic affairs, education, culture and information, and commerce and industry to enlighten the public on the need to rationalize consumption.
Spelling out long-term measures to curb prices, Madani said the ministries of agriculture and commerce and industry would present within two months a report to the Cabinet of a comprehensive survey it is conducting on investment opportunities in agriculture, cattle and fisheries in other countries.
“Experts will be appointed to conduct a detailed study on the Kingdom’s future food requirements to achieve food security, build strategic storages of essential commodities, and set up infrastructure facilities for the purpose,” Madani said. The Cabinet has given the ministries of commerce and industry and agriculture two months to present the study.
Meanwhile, the Foreign Ministry will prepare draft agreements for Saudi Arabia’s external investments in agriculture, cattle and fisheries within two months. The agreements will include necessary incentives and guarantees for such investments.
The Cabinet also instructed the ministries of finance, agriculture, and commerce and industry to conduct a feasibility study — due within three months — on setting up a holding company in which the public and private sectors will have stakes to manage agricultural and animal investments in foreign countries.
The Cabinet meeting also decided to expand the Kingdom’s agricultural, animal and fisheries investments abroad and said such investments should not be concentrated in a single country, Madani said.
Saudi businessmen will be encouraged to invest in the sector by providing them with credit and finance facilities through public finance institutions. “This will enable supply of these products at reasonable prices and ensure food security at medium and long-term levels,” Madani told SPA.
The Cabinet said finance for infrastructure projects required for agricultural and animal investments in foreign countries would be arranged through the Saudi Fund for Development, and regional and international financing institutions. The ministries of finance and agriculture will prepare the mechanism to purchase agricultural products from Saudi companies investing in foreign countries.
The Cabinet meeting urged the Finance Ministry to provide necessary financial support to the Ministry of Commerce and Industry in order to acquire necessary human and material resources to carry out its mission in the right manner, especially to monitor prices, and implement the laws related to commercial data, combating trade fraud and ensure fair competition.
Earlier, King Abdullah briefed the ministers on the outcome of his recent talks with Palestine President Mahmoud Abbas in Riyadh. The Cabinet urged big powers to shoulder their political and moral responsibility toward the Palestinian people and take quick steps to prevent Israeli atrocities against them.
“The Quartet countries jointly and individually should translate their declared stands toward Palestinian national rights and the right of Palestinians to establish a state. They should also confront Israel’s expansionist policy and its racist separation wall,” the Cabinet said.
The Cabinet inducted seven new names to the board of directors of the Supreme Commission for Tourism and Antiquities. They are: Dr. Adnan Wazzan, Abdullah Al-Muqbil, Dr. Saad Al-Rashid, Muhammad Bakr, Taha Al-Quwaiz, Abdullah Al-Baziee and Dr. Saadoun Al-Saadoun. The Cabinet also approved new regulations for state prizes and set the definition for illegal possession of arms and ammunitio