Labour Market Regulatory Authority

Price Survey Report

Introduction

This survey was undertaken by the Policy Development Department of LMRA. The survey was aimed to serve as an alert for price changes in consumer products that were expected to result from introducing the labour fees on expatriate labour employers. The survey's time frame spans from November 2006 to June 2009. The results were published in the LMRA's quarterly newsletter for labour market indicators starting from Q3 2007 and ending at Q2 2009.

This link presents you with the survey report that was authored by the data gathering team at that time.

The Report

The LMRA's Policy Development Department has undertaken conducting a simple survey to serve in alerting the changes in consumer prices in the Kingdom. This is part of the process of enforcing the provisions of Law No.(19) of 2006 with respect to the Regulation of the Labour Market in which Article 4 about LMRA's Functions Jurisdictions as follows: To collate and analyse data and information and statistics related to the economic situation in the Kingdom and in particular the Labour Market, so that the Authority will be the principal source that releases the accurate intelligence and information and statistics related to the Labour Market in the Kingdom. The authority will update and manage this data and information continuously in order to represent the true picture of the economy in the Kingdom. The Authority will prepare a report which will be published in the appropriate media to be determined by the Board in a manner that everyone concerned has access to the reports. (1) The provisions of Article 42-C of the decree state: The Authority prior to proposing any fees must take into consideration the rules and regulations set by this law, and that any change in the fees must be done pursuant to studies and commercial surveys with regards to the impact of these changes in fees on the GDP in the Kingdom, in particular to that which pertains to inflation and the Consumer Price Index.(2) The above will be achieved through compiling data about the kinds and prices of goods of various sources and markets on a regular monthly basis.

This survey seeks to give a clear and simple picture of the changes in market prices and impact of the new policies in terms of rises and falls to serve as a basis for LMRA's representatives in adopting new policies and decisions that may have positive or negative effects on the market. Indeed, it will help in investigating their relationship with the Labour Market policies; hence this survey will give a clear picture of the market conditions before and after applying the policies and will serve as an alarm bell in cases of steady and unjustifiable price increases.

This survey will serve as a base for a new index that has been developed by the Policy Development Department for measuring and providing alerts for changes in process. This index is called the Consumer Price Alert (or CPA). The index is designed to monitor and calculate change points in terms of price increases and declines to alert us about the overall situation of consumer prices whose components include the cost of foreign labour. It should be noted that the percentage of foreign labour is relatively high in certain sectors. The most important of these are the small industries sector in which foreign labour represents a very high percentage estimated at 91%, followed by the restaurant and hotel sector with 88%, contracting sector with 84% and the trade exchange sector with 76% (3).

This index is totally different from the Standard Consumer Price Index (Price Basket) which is followed by the Central Informatics Organization. It is also different from the regular monitoring of prices by the Ministry of Industry and Commerce. The Consumer Price Alert does not measure the inflation rate and it is not possible to measure through it. In addition, it is not based upon calculation of the Gross Domestic Product but it is only an alert index to investigate the reasons when the market is affected by the new policies introduced by LMRA, especially the control of the effect arising from the introduction of the new foreign labour fees upon consumer prices.

The difference between the Standard Consumer Price Index and the Consumer Price Alert lies in the fact that the latter depends upon a group of commodities that are likely to be influenced by the labour fees as they are often goods and products that heavily rely in providing them upon foreign manpower. It also differs in its calculation from the Standard Consumer Price Index as it does not depend upon calculating the weight of each commodity.

This survey was undertaken by specialists of the LMRA Policy Development Department and was closely monitored by LMRA analysts, statisticians, researchers and supervisors. We hope that this survey will achieve its objective and will provide useful and valuable information for the policymakers. It is hoped that it will give a clear picture from which we can get the special data and indicators required by analysts and researchers in their work to reflect positively upon the political and economic conditions in the Kingdom. We would like to seize this opportunity to express our thanks and appreciation to everyone who has co-operated with us in the data collection, classification, processing and analysis. The results of this survey are the fruit of the efforts made and the joint co-operation of the LMRA Policy Development Department team.

Labour Market Regulatory Authority

(1) Official Gazette- Law(19)- Part1- Article (4)- paragraph (2)- issue 2741 for the year 2006- the 59th year- page 68.
(2) Official Gazette-Law(19)- Part3- Article (42)- paragraph (c)- issue 2741 for the year 2006- the 59th year-page 84.
(3) Rates are taken from the Establishment Survey Data- Establishment Survey- CIO/LMRA- March 2006.
 

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