Abu Umar | 

81 percent of individual spending goes into rents


ABU DHABI —A study by a parliamentary panel on price rise has concluded that rents accounted for more than 81 per cent of individual spending in 2007 as against an international average of less than 25 per cent.

The Federal National Council committee called on the government for 
reviewing laws and legislations regulating the real estate market and devise strategies for regulatory control 
over real estate investment and 
development to provide adequate housing for various groups and meet growing demands of commercial 
and industrial sectors. The committee also recommended review of the 
prices of fuels and subsidy on fuels 
used by industries to slash the cost of production.

“The prices of fuels in the UAE are the highest among the GCC countries. The general rise in prices of oil products have contributed to drive prices up though the UAE is rich in energy sources,” the committee on Finance, Economy and Industrial Affairs noted in its report. The recommendations were part of measures to bring down the high living costs.

The committee demanded the creation of a government body to study, monitor and propose government fees.

It believed that fees levied by local and federal government should be studied closely as they have a direct effect on the end-user as businessmen pass these on to the consumers.

It recommended chalking out time-frame plans for the food security project, including investment in other countries with rich natural resources, to secure essential food commodities.

It also urged the government to 
provide limited subsidies on rice, 
wheat, flour, sugar, milk powder, edible oil, drinking water and pharmaceuticals. The committee stressed the need for supporting the agricultural 
sector and encouraging the setting 
up of food processing firms and 
improving the competitive edge of the national economy by removing all barriers on the import of food commodities into the country.

The House also called for pegging the UAE dirham to a basket of currencies, in order to mitigate the negative impact on nation’s economy by the steep fluctuations in exchange rate against US dollar as well as other currencies.

Source : Khaleejtimes online, 24/5/2009

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