The previously unforeseen inflation has hit the Kingdom's population hard, but none have been hit as hard as low-income expatriates. Said Al-Sheikh, chief economist at the National Commercial Bank (NCB), expects inflation, the highest the Kingdom has ever seen in 25 years, to rise to a whopping seven percent this year. And that could mean even more bad news for that particular segment of the society. Official estimates put the number of foreign workers in the Kingdom at around five million, the vast majority of whom falling in the lower income bracket. This is the unskilled worker class, the average income of which ranging anywhere from SR400 to SR2,000 a month. They can be found working as cleaners, drivers, clerks and secretaries. “I never saw it coming,” said Hashim, a construction worker from Pakistan. “My weekly grocery bill used to come to around SR50. Now I have to pay more than SR80 to buy the same items. I don't know what to do, but I have to eat. He said the portion of his income he sends home has been shrinking with every passing month, and sometimes he was left with nothing to send. Ali Khan, a bachelor who works for a private company, was forced to take up sharing accommodations with two other men to be able to bear the rent. “The landlord raised the annual rent from SR10,000 to SR14,000,” he said. “For me, that was quite a shock.” Sharing accommodations is becoming more and more common now, not only among bachelors, but also among families who no longer can afford to pay the ever-rising rents. Mohammed Sayeed, a telephone operator with another private company, is mulling simply packing up and going back home to South Africa. “I am struggling,” he affirmed. “The cost of living and the prices of commodities have risen both here and back home, while my salary stayed the same, and it's no longer enough. And I don't think I'll get a raise any time soon.” Recent gradual and lump increases in government salaries, and the calls for private companies to raise salaries by as much as 40 percent, expatriates, and especially those with lower income, have been left out. Mushtaq, a driver, has not had a raise for the past six years. “I can hardly meet the rising costs of basic things like milk and eggs,” he said, “let alone having to send money back home.” Many foreigners who work in hospitals have not been given raises, either, but all hope is not lost. “I have never had a pay rise or benefits as the Saudis have had,” said Mansoor, a physician at a government hospital. “This time I am hopeful that non-Saudi employees will also get a raise.” Saudi Arabia's new Commerce and Industry Minister, Abdullah Bin Ahmad Zainal Alireza, said he will address the inflation issue. Citizens and expatriates are now waiting for him to fulfill his promise of easing costs and prices. The Kingdom's current inflation has been attributed to numerous reasons, depending on which economist you ask. But immediately feasible solutions are much dearer. Among the reasons is the fact that since 1986, the Saudi riyal has pegged to the US dollar, the value of which has been in a virtual freefall. The Saudi Arabian Monetary Agency, however, has repeatedly dismissed unpegging the Riyal from the dollar. According to Sheikh, the NCB economist, the biggest drivers of inflation are the strains of increased foreign labor and rising government expenditure. John Sfakianakis, chief economist at SABB bank, HSBC's Saudi affiliate, cites increasing housing costs as one of the main drivers of inflation. Inflation has hit the entire Gulf region. Statistics say that inflation is increasingly becoming a serious challenge in the six-nation Gulf Cooperation Council (GCC). Saudi Arabia, Oman, the UAE and Kuwait and are all embroiled in this problem, which is posing a threat to their economies. The inflation the Kingdom is seeing is highly unlikely to fall this year, says Sheikh. The Kingdom's challenge is to meet the demands in the job market in coordination with the desire of a sizable number of expatriates to relocate to other countries to meet the rising cost of living. The government has been determined to offset inflation by introducing allowances for its employees, as well as welfare payments, subsidies and tighter bank lending restrictions. The King had ordered recently that government employees be raised five percent every year for the next three years. Some private companies have also made pay hikes, but most expatriates have been excluded. Dr. Ibrahim Al-Assaf, the Saudi Finance Minister, had said earlier this month that there is no magic solution to the problem. He underscored the recent measures taken by the government, such as pay hike and subsidy for essential commodities to offset the impact of inflation, but warned that there was not much anyone could do that would have an immediate and positive impact. Businessmen say that the prices of commodities have risen in the countries from which they import them, often attributing that to rising oil prices. Saudi Arabia, however, is one of the cheapest places to buy retail oil products in the world. Gasoline and diesel are literally cheaper than water, so oil is not part of the problem, although some economists agree that it is part of the solution on a global scale. __
