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Abu Dhabi pay raise stokes fear of foodstuff price surge

ABU DHABI — Citizens and expatriates have hailed the decision of General Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Chairman of Abu Dhabi Executive Council, amending the grades and salary structure in government departments in the Abu Dhabi emirate, in line with the directives of the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan.

Most of them said the decision has fulfilled their hopes and it would bring the emirate government’s performance on par with international standards.

However, Engineer Farey Hassan Al Mazroui, director of the Parks Department in Abu Dhabi Municipality, said the increase in prices of foodstuffs is the issue at the moment.

He said the increase in salary is like a grant from the leaders of the state and it should not be exploited by unscrupulous elements.

He stated that whenever the government has sought to raise the standard of living of citizens and expatriates, some greedy traders or agents have tried to take advantage, particularly by increasing the prices of essential commodities.

High prices

While pointing out that controlling prices was also the responsibility of the individual in the first place he urged people to refrain from buying things that are unjustifiably priced. He added that the regulatory bodies in both the Abu Dhabi Municipality and the Ministry of Economy are working with earnestness to control the market and prices.

Ahmed Rashid Al Amary, chairman of the Division of Public Services at Abu Dhabi Municipality, said the decision to amend salaries and grades would lead to an increased desire by the private sector to compete with the better performance of the government departments.

He added that competition between private and public sectors will improve efficiency and increase productivity, which is consistent with the planning of the emirate of Abu Dhabi.

He urged the traders not to exploit the increase in salaries and see it in an economic perspective, because higher prices will lead to the reluctance of consumers from purchasing.

He demanded strict government control on markets and prices so that the traders do not get a chance to raise prices and tax the consumers.

He noted that the decision will also benefit the expatriates and help improve their standard of living.

Rashid Al Hajiri, from Zayed Foundation for Humanitarian Care, said the recent increase in salaries no doubt represented a leap in the income of the nationals and the expatriates.

He asked the traders not to raise prices indiscriminately on the basis of the increase in the salaries of labourers in some sectors of the state.

Abdel Rahman Abdullah Bakharmah, from the banking sector, hoped the increase in salaries would not lead to a spurt in house rents and prices of fuel and foodstuffs. He, too, called for strict price controls as past experiences have showed that increase in salaries has resulted in price rise as well.

He added that the decision of General Shaikh Mohammed to increase salaries will, no doubt, have an impact on the labour market in the private and public sectors, which will have to raise salaries to attract skilled manpower.

D. Ahmad Redha, economic expert on consumer protection issues at the Ministry of Economy, confirmed that the fresh increase in the salaries of local government departments in the emirate of Abu Dhabi would not be offset by high prices, because the recently-enforced Consumer Protection Act prohibits random price hikes.

He added that the Rent Act stipulates that the maximum increase in rents should not exceed 7 per cent per year, which

means that rents will not witness great leaps. Hence, the argument by some traders that high rents were behind the rise in prices is not acceptable.

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