New laws should be introduced in response to the global crisis to create a balance between supply and demand across all markets and economic sectors, says an expert on food and consumer issues.
Oil revenues should be invested in developing human resources and the agriculture industry to reduce the money Arab countries spend on food imports.
And efforts should be made to curb overspending by families, Hassan Al Katheri, a former Vice-Chairman of the Emirates Society for Consumer Protection, told Seven Dubai – 7dubai.com .
“I think the crisis requires a package of laws regulating supply and demand in all sectors,” he said. “This would benefit both the dealer and consumer and restore active trade movement in the UAE.
“The crisis requires short-term solutions designed to restore confidence in markets and bring back balance. It also requires medium and long-term solutions involving all government and private bodies.
“In addition, officials and the media should talk about the crisis in a transparent way. All those things will help us to weather the storm and support Arab economies.”
He said the cost of food and drugs had fallen all around the world because of the downturn but remained unchanged in the UAE.
“The prices of electronic devices have fallen but prices of food and drugs haven’t,” he added. “This issue is related to Arab food security as the Arab countries spend between $20 billion (Dh73.45bn) and $25bn a year on food imports. The Arab World imports 90 per cent of its food needs from Western countries.
“We should create a kind of economic integration and spend part of the Arab World’s oil wealth on joint Arabic agricultural and industrial investment as well as on the development of human resources.”
Recent figures revealed that consumer spending by families in Dubai now totalled Dh37bn per year. “Huge efforts are needed to change the negative aspects of the prevailing consumer culture in GCC and other Arab societies, especially in the fields of food, energy, cosmetics and clothes where we see lavish spending.
“This has resulted in an increase in the level of personal loans and some have been jailed for spending in a way that does not take income into consideration. I think family expenses could be cut by a third if consumer habits changed.”
Al Katheri said a reduction in rents was inevitable, adding: “The correction will be in the interests of tenants and will include both apartments and offices. That will help motivate the economy and restore the law of supply and demand.”
He said consumer protection measures in the Arab World still had a long way to go before they matched those in the West.
“The situation of consumers in the UAE is very similar to that of their counterparts in all Arab and GCC countries. There certainly is protection for consumers in the Arab countries, though the level of protection differs from one country to another. But this protection does not yet take into account current worldwide developments such as globalisation, freedom of trade and transparency.
“I think new laws are needed to combat monopolies, prevent markets being flooded with goods, ensure fair competition and regulate advertising.
“We need to differentiate between official consumer protection departments and non-government consumer protection societies. There are a limited number of consumer protection societies in Arab countries and Qatar and Kuwait, for example, have no such societies.
“Some think the presence of a consumer protection department is a substitute for consumer protection societies, but there is a big difference between the two concepts. Non-government societies spread awareness among consumers, defend their rights and interests and represent them before judicial bodies. Government departments, on the other hand, apply the law.”
He said the expenditure of resources on consumer protection in GCC and other Arab countries was running at less than half the level in the West.
“Developed nations such as the US, Australia and European countries have gone a long way in the area of consumer protection. The annual budget of one British consumer protection society is around Dh1bn while the sales of its publications are worth Dh600 million.
“It employs more than 250 specialists in different fields such as electronic devices, cosmetics and auto spare parts. This results in a high-quality service for consumers who receive the results of scientific research.
“If a person wants to buy a car he will know a lot of information about safety and comparisons in terms of quality and price from looking at these publications, and he might save as much as 30 per cent as a result.
“In addition, laws there take everything into consideration in the interests of consumers. For example, if a dealer wants to run a promotion he should have a minimum number of items available for the promotion. Also he should provide a sufficient range of goods in stock during a sales period and not mislead the consumer.”
He said consumer protection was a new concept in the GCC and welcomed the setting up of a special department by the Ministry of Economy.
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