UN call to halt poverty spread

from the Gulf Daily News

POVERTY could spread across the Gulf if urgent action is not taken to reduce inflation, says a senior United Nations (UN) official.

People from poorer background face being priced out of the market when buying property and foodstuff if the trend continues, said Bahrain-based UN resident co-ordinator and UN Development Programme resident representative Dr Khaled Alloush.

"If you say that everybody now is eating well, if the price of food doubles many people will try to skip certain items," he told the GDN.

"Normally inflation hits the middle and lower classes the most and they will try to cut their living expenses. These will be people who are not able to afford the price rises such as the elderly and unemployed so it will be the disadvantage groups who will suffer the most."

Dr Alloush praised Bahrain for trying to limit the impact of rising inflation on consumers from poorer background such as subsidising basic commodities like flour, meat and petrol.

But he warned the policy was not a long-term solution and could only be done for a maximum of around 10 years without damaging the economy.

"The policy is very costly in the long-term and many countries have deserted it because the gap between the cost price and the subsidised consumer price was extremely large," he said.