Inflation: A Reason for the Birth of Class Struggle in Maldives

Thursday, February 28, 2013

Source: Department of National Planning

Inflation refers to a persistent rise in the general price level. Inflation in the Maldives is measured by the Consumer Price Index (CPI). The CPI shows a weighted average of the prices of a general ‘basket’ of goods and services purchased by consumers. Each product in the index is weighted according to its relative importance (price relative) in the total consumer expenditure.

Department of National Planning has reported on Monday (February 25, 2013) that the island country depending on foreign imports has experienced an Annual CPI of 4.33 per cent for the last year (from January 2012 to January 2013). Despite the arguments put forth against rising price level by the then opposition in January 2012 to continue strike until the previous government was toppled on 7th February 2012, ordinary Maldivians are adversely affected in the post coup 12 months.

Cost of Education rose by 22.84% over the year
The worst hit area is ‘Post-secondary non-tertiary education’ (+22.84%) which laid a huge burden on the poor self-financed students residing in Capital Male for their higher education as higher education is highly centralized to the Capital. These students are forced to spend their family income for rent and food in the world’s most densely populated capital city, leaving their siblings in the rural islands fighting for their daily bread.

Prices of goods and services related to Pre-primary and primary education increased by 10.40% reducing the affordability for the low income islanders who mainly depend on fisheries for living.

Pensioners are worst hit due to soaring inflation
These soaring prices of goods and services related to Pre-primary, Primary and Post Secondary education has changed the living of the fixed income groups into miseries. The purchasing power of the pensioners and the old who depend on the monthly state pension of MVR 2000 is now exposed to vulnerability due to the rise in education cost accompanied with the 6.65% rise in the prices of games and toys that they buy for their grad children.

On the other hand, the richest 100 people who control the whole economy have enjoyed a significant rise in their income as they directly increased the prices of the goods and services before the present paralyzed government. This has increased the income gap between the rich and the poor giving birth to a new form of class struggle. 

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