Haider Al Lawati - haiderdawood@hotmail.com - Increased consumption in the holy month of Ramadhan and the current economic conditions witnessed by oil-producing countries raise some questions on this continuing pattern of excessive spending on food products every year, especially in the GCC, which end up in the trash can.
GCC’s food import bill constituted 25 per cent of the total import value of $468 billion, or $117 billion in 2016.
This astronomical figure of the GCC’s annual imports of various goods and products from all over the world is matched with big spending by GCC citizens on the purchase of both consumer goods and other luxuries, which prevents many from saving for any future emergencies under the current conditions in the region.
Thus, the issue of savings has not only become a major factor on which family activities worldwide are based, but also an important means of achieving the development of nations. Savings is also preached by different religions, doctrines and laws, including Islam, which has become the focus of countries and governments nowadays, and advocated by international organisations that are promoting savings among communities as an important channel of social development spending.
Savings is an age-old practice, in which something is salted away for a rainy day. It starts with keeping a specific sum in a piggybank on a daily, weekly or monthly basis, or making monthly deposits in the bank for later use — within several years — in case of an emergency. In other words, a part of the money earned is saved for the future as a safety net against family emergencies and crises.
There must be increased awareness to educate society in general and families in particular, especially in the GCC, on the topic of savings, in order to achieve it by applying various considerations. These include laying the foundation for a monthly budget for the family to be directed towards necessary expenses whilst reducing luxuries that the family can do without and avoiding the use of credit cards easily provided by banks as much as possible — only for emergencies and for basic necessities.
Spending should be based on the family’s basic needs of food, shelter and clothing with some leisure and travel. Any excess money can be saved or used for long-term investment without depriving oneself or the family from the basic needs.
The head of the household, man or woman, will be better off adopting the culture of savings and passing it on to their offspring at an early age to learn how to fulfil the minimum amount of consumption in family life and try as much as possible to eliminate luxuries. This requires saving any excess amount either in the form of deposits in banks or through proper investment channels with financial returns such as trade.
Today, there are many institutions that provide a myriad of services for individuals to benefit from their savings in the education of children, health insurance at old age, annual profits from securities or bonds or bank deposits. In contrast, there are only a few studies that address such issues across the GCC, especially on savings by individuals or families.
This article sheds light on the concept of savings in the region and the success of government policies in mobilising people and raising awareness of the need to pay attention to the policy of saving both at the government, public, individual and private levels.
Moreover, it discusses obstacles facing savings policies in the GCC community along with an introduction of the policies adopted by the government during the past decades and hindrances and challenges these face in order to achieve much more in this regard.
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