Pengguna perihatin

2007/10/29

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.

But no government, no matter how authoritarian in controlling its markets, can command the weather to conform to human comfort zones. Droughts and floods — indeed, the entire panoply of effects wrought by planetary climate change — have adversely affected crop harvests worldwide. Lesser harvests raise the cost of wheat and corn, which ends up raising prices at the street-corner food stall, which then plays up into a political or election issue.

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.