Monday, October 29, 2007
EDITORIAL: The priceof survival
FEDERATION of Malaysian Consumers Associations secretary-general Mohd Sha’ani Abdullah has renewed the call for a Price Commission as a measure against the rising prices of essential items and household goods. Such a commission, he suggests, “could act as a watchdog for consumers” in monitoring prices. But such functions are already carried out by the Domestic Trade and Consumer Affairs Ministry, which would cast such a commission as an extra-governmental layer in price monitoring, presumably to curb the unfair inflation of prices at points of sale by unscrupulous merchants and traders. Reprehensible as such gougers may be, however, they are not the chief architects of the sort of inflation now chipping away at the value of a ringgit and diminishing Malaysian households’ ability to maintain themselves in the manner to which they’ve grown accustomed.
These are realities that consumers must recognise. The price of oil is at present over US$90 (RM300) a barrel, spiking in spot trading into the three digits that are clearly in its near-term future. While fuel-pump prices remain heavily subsidised in this country, the government has warned it cannot keep doing so indefinitely. The civil service pay rise this year, intended to blunt the edge of fuel price hikes arising from a reduction in fuel subsidies, sadly achieved two predictable outcomes: inflationary pressure and complaints of inadequacy. There may be some mileage, however, in looking at electricity and telecommunications tariffs in the light of the substantial profits being made by the national corporations in these sectors, and addressing the costs of these components of the average household’s living expenses.
But governments can only do so much to keep prices down in the face of global realities. Price caps on controlled items, it must remembered, have a depressive effect on producers and retailers of these items. Extending such ceilings risks distorting the economy and compounding future burdens, which is too high a price to pay for allowing present society to continue living in a fools’ paradise of artificially depressed prices.
Sunday, October 28, 2007
Set up a price commission
PATRICK SENNYAH
Are the increasing prices of goods beyond the government’s control or are enforcement efforts simply not effective enough? Federation of Malaysian Consumers Associations secretary-general Mohd Sha’ani Abdullah and Deputy Domestic Trade and Consumer Affairs Minister, Datuk S. Veerasingam share their thoughts on the issue with PATRICK SENNYAH
Q: What is the feedback that Fomca has received on the increasing prices of goods and how severe is its impact on the people?
A: We are continuously getting calls from the public, but the problem is that the Domestic Trade and Consumer Affairs Ministry seems reluctant to admit that prices are indeed rising.
However, Fomca has found that prices of goods are gradually but definitely increasing. The government is not doing enough. They claim they are monitoring and controlling the situation but obviously this has not been effective.
A: They should use the available avenues, either through their elected representatives or even the ministry hotlines, to voice their dissatisfaction and frustrations.
They cannot sit back and accept the excuses and statements made by the minister.
Consumers these days are aware of their rights and they will not accept lame excuses. Consumers should voice their grievances to those who can actually do something about them.
Q: What is Fomca doing to assist the consumers?
A: Fomca can only do so much. We can highlight the problems to the authorities but we are only one voice. Based on the response we have received from the ministry so far, they (ministry) feel that they are doing enough and there is no cause for worry. However, based on our feedback, the ministry’s actions are insufficient and consumers, especially those in the lower income groups, are finding it very difficult to manage.
The government says it is doing this and that, but clearly they are not helping the people enough. Sure, they have increased the salaries for civil servants and we are grateful for that.
However, with the escalating prices and with fuel prices going up, the government must realise that consumers, even with the salary revision, may face difficulties in making ends meet.
We cannot point fingers at the traders, they are affected by changes in the global market and adjust their prices accordingly.
Q: So, what is your solution then?
A: Perhaps it would be timely for the government to consider our proposal for the setting up of a Price Commission. This commission could act as the watchdog for consumers and with the help of consumers, it could effectively monitor prices, especially for essential items.
The commission would be responsible for studying the justification behind any price increase, including tariffs for water and electricity.
If the justification behind the increase is not substantiated, then the commission could make recommendations to the ministry for the relevant action to be taken.
Q: Who should sit on this commission?
A: We sent a proposal to the ministry two years ago and till now, we have not received any feedback. The commission should include economists, government officials and those with legal background.
