Record oil company profits keep making the rich richer and the middle class poor.
AMMAN: Even as it enriches Arab rulers, the recent oil-price boom is helping to propel an extraordinary rise in the cost of food and other basic goods that is squeezing this region’s middle class and setting off strikes, demonstrations and occasional riots from Morocco to the Gulf.
In Jordan, the soaring price of oil led the government to remove almost all its costly fuel subsidies this month, pushing the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more.
In Saudi Arabia, where the inflation rate had been virtually zero for a decade, it has reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.”
The resurgence of inflation has many causes, from rising global demand to the monetary constraints of currencies pegged to the weakening U.S. dollar. But one cause is the skyrocketing price of oil itself, which is creating unheard-of riches for governments in the Gulf even as it helps push many ordinary people into poverty.
Food imports are a big part of the problem and something we need to consider here in Coos County given our staggering trade deficit.
