The statement of Vice Prime Minister Bitici confirmed what we all already knew - since the prices in the EU and other countries are galloping, they are going haywire in Macedonia.
Probably no one even imagined that Vice Prime Minister Bitici will exclaim in disappointment: "If food stock exchange prices in the EU has increased by 11 percent, here it has increased by 46 percent. It is not ethical."
Really odd. A government that showed little understanding of the low standard of citizens and that deepened the social differences by raising the salaries of the public officials by 78 percent, is now surprised that the traders are following her example in an attempt to make as much money as possible in the food supply crisis.
The problem is actually more ethical and less of a market legality issue, but at the same time it is rooted in the weaknesses of the policy which, on the one hand, wants to show concern for the people, but on the other hand, does not want to lose the support of the business in which the large trade chains that increase the prices participate. There is no other explanation, except a race for making profit if, for example, a kilo of avocados in the low-budget retail chain Lidl (this is not an advertisement but an illustration) can be bought for 1.5-2 euros, and here it is 6.5 and up to 10 euros for the nicer variety.
The same goes with fruits such as blueberries, blackberries, raspberries, or walnuts, almonds and other products from this category, including vegetables and other products from the food list.
The Vice Prime Minister's statement has otherwise confirmed what we all know - since the prices in the EU and other countries are galloping, they are going haywire in Macedonia. There is no other word to explain what is happening because, whenever one reenters the sale centers, there is nothing but new, higher prices.
According to the MakStat database of the State Statistics Office, in the period March 2020 to August 2023, the prices of food and soft drinks grew by 45.7 percent. But the situation is almost the same in other areas as well.
Prices in transport grew by 38 percent, in housing, water, electricity, gas and other fuels by 32.3 percent; furniture, household goods and household maintenance by 27.4 percent; restaurants and hotels by 41.5 percent; alcoholic beverages and cigarettes by 22,7 percent; recreation and culture 17.8 percent; and other goods and services 23.5 percent. The total price increase is 33 percent.
Low wages, high prices
On the other hand, the inflation in the EU is in decline. In August last year it was 10.10 percent, and further decreased to 6.10 percent by 31st of July 2023. Inflation in North Macedonia is also declining - according to official data, the inflation in our country is now lower than in European countries, which directly confronts Mr. Bitici's statement about the enormous difference in price increases and raises the question of the merchants greed.
In August 2022 inflation in our country was 14.2 percent and in August 2023 it is 5.6 percent which indicates a drastic change in the environment, but only in the environment and not in the prices, because they are moving upwards and threaten to lead to a disaster in the family budgets.
To illustrate the situation, we will compare the value of the consumer basket today and in the past. The minimum consumer basket according to the trade unions in July 2023 for a family of four is 48,620 denars, in July 2021 it was 34,128 denars, in July 2019 was 32,653 denars, in July 2016 it was 32,218 denars while in July 2014 it was 32,083 denars. To be fair, both the minimum wage and the average wage were also increased.
Source: pexels.com
In December 2016 the average salary was 23,457 denars a now it is 36,527 denars, while the minimum wage of 10,080 is now increased to 20,175 denars. However, it is clear to everyone that the minimum wage and the average wage do not follow the real cost of living of the average citizen.
Everyone knows best how they live now compared to two, three or more years ago. Even with the price reduction interventions by the government, the average Macedonian citizen is impoverished, and this can be seen on daily basis on the streets and by the crowds in front of low-budget outlets.
If those places were once reserved for pensioners only - no disparagement, but this ascertainment is due to the low pensions - now buyers from the so-called "middle class" can be also seen there.
Undoubtedly, the pandemic also played its role in this economic and social tragedy of today. It significantly slowed down the economic growth. The same goes for the war in Ukraine, which hit with all its ferocity on the foodstuff and resources such as grain, and on energy without which the modern life of today cannot be even imagined.
We should also throw in to the picture the climate changes that directly affect the yields in agriculture, and the governments in Macedonia, at least so far, have not been searching for solutions.
Another issue is the current capacity of the Macedonian economy, and the policy to deal with these challenges. The fact that the war threatened the economic well-being of the European countries only reduced the possibilities of the Macedonian economy for activities in that field because the more powerful and the richer got to the alternative resources faster. And that should not surprise anyone. This is precisely the motivating factor for countries and communities to win international positions so that they can at any time meet the interests of their citizens.
Vucic's sandwich made the day in the region
We made a quick comparison of how countries in the region are dealing with this new poverty situation. According to Bloomberg Adria, the virus of price reduction that affected the region started from Montenegro, reached Serbia two weeks ago, and then affected Croatia and Macedonia.
In March of this year, the government of Montenegro introduced the "Anti-inflation basket" which included 25 products and limited prices. Merchants had a choice whether to participate in this promotion and which basket products to sell at limited prices. The model was then taken up by the Croatian government, which also froze the prices of three-dozen foodstuff and items.
In Croatia, however, the government has at least asked traders to revert the prices to the level of 31st of December 2022. The inflation in this country from the region, which is also an EU member, is 7.8 percent.
In Serbia, starting from 20th of September, the prices of 20 foodstuff were reduced. It is inevitable to mention the comedy of the Serbian President Aleksandar Vucic who accepted the challenge of the editor-in-chief of NIN, together with two Ministers, to have bread and salami for breakfast with mayonnaise, to be the first to taste the products with reduced prices that they offer to the people.
Mr. Vucic used the event to show that three men can eat for 580 dinars (about 290 denars) because the salami, yogurt, bread and mayonnaise are discounted.
This incident was met with ridicule throughout the region, because it reflected the hypocrisy of the rich and privileged towards the ordinary citizens. According to Ipsos survey published on 6th of September, Serbia, together with Greece and Portugal are the three acute countries in Europe where the decline in purchasing power is dramatic. In the same survey, 89 percent of citizens surveyed in ten European countries indicated the rapid growth of prices as the reason for the reduced purchasing power.
In Bulgaria last month, a big spike in the basic foodstuff happened again, but the government focused its efforts on calming revolt of the farmers and grain producers after the end of the embargo on the import of Ukrainian grain.
The never-achievable salaries of public officials
In Macedonia, the government requested the prices of 24 categories of foodstuff to revert to the level of 1st of August 2023 and plus be reduced by 10 percent of the then price. As a mechanism against price increases, the Government will also propose a Law on unfair trade practices which should curb traders and have positive impact on the family budgets, but it will take time until this proposal is adopted, and according to the experience so far, it will certainly be put into the machinery of political games.
Although this government measure can be understood as an act of empathy and responsibility towards the citizens, they still see the government as selfish.
The reason for that, as mentioned above, is the astronomical increase in the salaries of the President of the country, the Prime Minister and the Ministers, the speaker of the Parliament and MPs, judges, prosecutors, mayors and other elected and appointed officials.
Their monthly salaries are now over two thousand euros, which compared to the average salary of about 36 thousand denars in the country, is really a fantastic amount. To make the irony bigger, the bombastic announcements of Prime Minister Kovachevski that they will revise the coefficients for calculating the salaries of officials did not yet materialize.
Seen in that context, the Government, following the folk saying "God first created a beard for himself and then for others", no matter how much it tries to show the opposite, left the citizens at the mercy of inflation and the rise in food prices, throwing them crumbs while providing themselves with financial commotion to overcome this unprecedented crisis and rise in food prices.
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