Waiting 19 Hours for Gas in a Lifeless City – The war in Syria is now an economic one and a visit to Damascus shows how people are struggling to find essentials.
CRIMSON TAZVINZWA, AIWA! NO!Inflation in the Middle East is typified by the same economic factors affecting most Sub Saharan AFRICAN countries.
Across the world, surging international food prices have become a major cause for concern and topic of debate. This is especially so in the Arab world, which is home to some of the largest food importers and where rising food prices have been one of the factors in recent political unrest.
In the context of ongoing political developments, governments across the region are responding to the rise in commodity prices with hikes in fuel and food subsidies, civil service wage and pension increases, additional cash transfers, tax reductions, and other spending increases. These measures will help poor households maintain their purchasing power and limit further increases in domestic food prices.
How should central banks—whose task is to prevent general price increases that would further cut into peoples’ incomes—react? What inflation metric should they target?
In my mind while Africa has some of the most valuable resources on the planet, the continent has not been able to cook its own food and eat it. There is an inherent problem of over-dependance on imports (some of which are most basic- foodstuffs for instance) and this costs money; and consequently eats into forex reserves.
If the Middle East and Africa need to curb inflation in the long term they will need to do four things: invest, produce, manufacture and export (trade). This approach does not only bring in money but also employment.