| 05 Dec 2008 |
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Lebanese consumer prices still climbing despite lower costs
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05 December 2008
BEIRUT: Prices of basic commodities in Lebanon have either remained the same or rose slightly in the past two months despite a drastic drop in these items from the countries of origin, the head of Consumer Lebanon said on Thursday. "Our organization has been checking the prices of basic commodities such as milk and cereals in supermarkets and groceries. So far nothing has changed. On the contrary the prices in some cases are going up," Zuhair Berro told The Daily Star.
According to Consumer Lebanon, the prices of basic commodities have gone up by 2.83 percent in the month of September alone.
"The price index for two years and three months has jumped by 50.33 percent. These figures dispute all the claims that the prices of commodities are falling down," Consumer Lebanon said in a statement.
The government agreed to raise the minimum wages by LL200,000 ($133) for both the private and public sector employees in an attempt to weather the high cost of living.
But this meager raise has actually angered the trade unions and teachers who went on strike two weeks ago, forcing the closure of all private and public schools.
The authorities and importing companies claimed in the past that prices of commodities are rising because of the rise in the prices of oil and the depreciation of the US dollar.
But since the prices of oil fell to less than $50 and the US dollar regained some of its strength against the euro currency, the prices of basic items did not change, according the consumer advocate.
Lebanon imports 70 percent of its needs from Europe and some Arab countries.
Economy and Trade Minister Mohammad Safadi said on Wednesday that the prices of basic commodities would fall in the coming few days after the food importing companies promised to submit a list of the actual prices of all imported products to the ministry.
Some of the supermarket owners told Safadi that the prices of cereals and olive oil have fallen by more than 30 percent in the past few days.
They added that their margins of profit from the sale of basic commodities is considered very reasonable.
Safadi promised to crack down on merchants who manipulate prices and said the ministry intends to raise the number of inspections it coducts from 40 to 140 in the near future.
But Berro argues that that prices will never come down to low levels if the government does not eliminate exclusive dealership rights.
"How can we pretend to be a free-market economy when the government protects the exclusive dealers? The authorities are nothing more than free policemen for these companies because they will seize any product that enters the country without proper papers showing that he is the exclusive dealer of these items," Berro said.
A source who spoke on condition of anonymity told The Daily Star that many officials at the Economy Ministry are being bribed by some merchants to ban the entry of cheap products into the country.
"These profiteers will use all their resources to ensure that no one will compete with them fair and square. It's a pity. The merchants and companies are much stronger than the government," the source said.
© Copyright The Daily Star 2008.
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