Arab news: Experts are calling for stricter measures to curb the Kingdom’s underground economy, which thrives during busy seasons such as Eid.
Many food items and other products produced illegally were dumped on the local market during the holidays.
“The Kingdom loses large amounts of money to this illicit economy, which it could spend on infrastructure projects,” said an analyst.
Underground economy refers to illegal activities that generate income not accounted for in a country’s gross domestic product (GDP).
Saad Al-Buainian, an expert, said that underground economy accounts for between 20 and 30 percent of a country's GDP around the world.
“In Saudi Arabia, a minimum level of the international rate can be applied to judge the size of the country’s illicit economy, estimated at around SR400 billion,” he said.
Analysts said that unlicensed food manufacturers cashed in during the Eid holidays by regularly supplying local supermarkets, which sold their products with a mark-up. They said that these manufacturers believed that only an expiry date is needed on their products.
“They should, however, be in possession of permits to operate,” said another analyst.
Aside from these unlicensed food manufacturers, there were others who also cashed in, such as mobile vendors selling various items.
Saudis traveled all the way from Qassim and other parts of the Kingdom in their pick-up trucks to sell watermelons in the Saudi capital’s main thoroughfares for a quick buck.
“They are unlicensed vendors because they don’t issue receipts and, therefore, there is no way that their activities can be accounted for in the local GDP,” an economist said.
GDP is the monetary value of goods and services produced within a country’s borders in a specific time period and is usually calculated on an annual basis.
There were also ambulant vendors selling various food products in family strongholds during the Eid holidays, such as zoos, parks and resorts, who sold soda, water and popcorn to visitors, making good profits.
There were other vendors who also sought to make a profit by selling carpets, blankets, perfumes and cell phones, among others.
Individually, the amount of money made may be marginal, analysts said, but collectively, profits form a huge chunk of the underground economy.
Estimates of the underground economy in certain countries may not be accurate, added Al-Buainian, but “this gives us a rough indication.”