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Gulf Arab governments tackle higher food prices

Gulf Arab governments tackle higher food prices

Food price rises are less risky in the oil wealthy Gulf, but Saudi Arabia may see some public anger.

February 3, 2011 11:34 by

Countries in North Africa and the Middle East are urgently seeking ways to soften the blow of surging food prices for their citizens, alarmed by protests against authoritarian rulers from Algeria to Yemen.

Unprecedented demonstrations have erupted around the region, triggered by events last month in Tunisia where President Zine al-Abidine Ben Ali was forced into exile in Saudi Arabia by a population provoked by high unemployment and unaffordable food.

On Tuesday more than 200,000 Egyptians crammed into the main square in Cairo, answering the call for a million people to make their voices heard against the 30-year rule of Hosni Mubarak, as discontent over years of authoritarian rule exploded into demands for regime change.

Food costs are among the grievances of demonstrators around the region as global food prices hit record highs in December, above levels that prompted riots in 2008, according to the U.N.’s Food and Agriculture Organisation, which warned prices of cereals, oilseeds, dairy, meat and sugar are set to climb.

Arab attention is keenly focused on Egypt, as wheat prices, already up on supply shortages caused by drought in Russia and floods in Australia, continue to climb to multiyear highs on futures markets closely watching unrest in the region.

“The government has to take care, monitor prices and improve salaries so that they avoid what happened in Tunisia and spread to Algeria and Cairo,” said Raeda al-Farooki, a mother of four, at a large supermarket in Saudi Arabia’s port city of Jeddah.

“Onions were about 5 riyals ($1.3) per kilo two years ago and now are around 10. Imported food is even more expensive, but the worst part is that there is no increase in salaries,” said Farooki, who lives on six thousand riyals ($1,600) per month.

Algeria, Libya and Jordan have either relaxed food taxes or duties on food imports or cut prices of staple food, and Kuwait recently introduced a generous stipend and free food for its citizens until March 2012 to ease the pain of higher costs.

There is also simmering unrest in Yemen, the poorest Arab country, where 40 percent of the population lives on less than $2 per day.

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