The cost of services and products in Bahrain is expected to surge by at least 35 per cent before the year-end due to the impact of Covid-19 on the nation’s economy.
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MPs are seeking to prevent Bahrain from facing the same fate as other nations affected by Covid-19 through joint schemes, programmes and initiatives between the government and the Shura Council.
A proposal to raise the line of basic life needs, calculated at BD336 for social welfare by the Labour and Social Development Ministry, to BD500 has been presented by five MPs led by Mohammed Buhamood.
Salons and hairdressers opened last Wednesday after two months of closure with services costing 100 per cent more.
However, cinemas, massage parlours, fitness centres and gyms and sheesha cafés have remained closed.
“Nothing is set to return back to the old system or cost,” said committee chairman Ahmed Al Salloom.
“For instance, salons and hairdressers are restricted to providing just 10pc of their original services, with strict health and hygiene measures, though necessary, costing more.
“When the other closed businesses reopen, they, too, will have to operate under reduced capacity, with extra costs being shouldered by the customers.
Mr Al Salloom, who is a Bahrain Chamber of Commerce and Industry (BCCI) board member, said business moves in a cohesive circle.
“An increase in the cost of one service will lead to an increase in the cost of related services.
“For example, a salon with a monthly revenue of BD1,000 earlier could see a drop by B300 or BD400 even with increased prices, resulting in reduced spending on necessities by the owner or employees.
“This will, in turn, lead to other traders in the market raising their prices since their sales will go down.
“By this chain reaction, by year-end the cost of services and products will increase by at least 35pc.”
Bahrain in March launched a BD4.3bn economic stimulus package to offset the effects of Covid-19, which included paying for wages of Bahrainis in the private sector for three months, deferring loan instalments for six months, shouldering utility bills for three months, waiving government fees and helping small and medium enterprises.
“The government needs to tell us how much has been spent from the BD4.3bn so far and what it intends to do with the remaining amount as we work for the future together,” said Mr Al Salloom, who is also the chairman of the Bahrain Small and Medium Enterprises Development Society and Bahrain Parliamentary Bloc president.
Parliament public utilities and environment affairs committee vice-chairman Ahmed Al Demistani said it is just not closed businesses that have been hit by Covid-19; even those that were open faced a drop in sales as people stayed home.
“We have received government assurances that the wages and allowances of Bahrainis will continue being secure and that new support packages were in the pipeline.”
Mr Buhamood said the government commitment to secure wages and allowances for Bahrainis needed to be supported with new social welfare schemes to manage the expected 35pc increase in the cost of services and products.
“Until the economy recovers, the 35pc has to be absorbed by the government to ensure there are no imbalances through new anti-inflation schemes that sees the introduction of further categories and more payments.”
The Cabinet said last month that it will slash the operational budgets of ministries and government departments by 30pc.
A number of construction and consulting projects will also be rescheduled to absorb emergency and emerging expenses to combat the spread of the virus.
Justice, Islamic Affairs and Endowments Minister Shaikh Khalid bin Ali Al Khalifa told legislators on May 17, Bahrain is expected to fully overcome the effects of Covid-19 within around two years.
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