Parliamentary panel rejects complete shift to free trade
Says hoarding denies the full benefit of fall in prices to consumers.
ISLAMABAD:
The government on Thursday confessed that the consumers could not get benefits of reduction in essential commodities prices because of hoarding as a parliamentary panel turned down an official call to completely adopt free market mechanism.
“Overall the international commodity prices are on decline since July but its impact will be visible after one and half month due to hoarding”, said Special Secretary Finance Rana Assad Amin here in a meeting of the subcommittee of the Senate Standing Committee on Finance.
The sub-panel has been constituted to review price hike and recommend measures to control the prices of the essential commodities. The Finance Ministry officials, however, cautioned that the declining trend may get reversed in January in the wake of reports that the world oil prices would soar due to increasing tension in the Middle East and the Gulf region.
The Special Secretary made an emphatic call to the legislatures to adopt single market mechanism-the free market, instead of experimenting both, the free market and the regulated one.
“The government has to decide between the state intervention and free market mechanism and if it decides for free market, the market forces will not disappoint”, said Amin.
However, his appeal could not impress parliamentarians who unanimously opposed the free market approach. “Ideally it is good to choose one system but practically it will leave people at the mercy of profiteers, hoarders and speculators”, said Senator Ishaq Dar, the sub-committee head and former finance minister.
Dar further said that free market was a wish of the West that wanted to control Pakistan’s agriculture market and at the same time the West was not ready to open its labour market for the country.
“The United States and European countries are still not free market economies in the true sense”, said Senator Sughra Imam of PPP.
Senator Professor Khursheed Ahmad said that the Finance Ministry should not blindly follow the free market notion of the West. He said only 30 per cent of the country’s economy has exposure to the world market while the rest is the domestic that is manipulated by cartels and profiteers.
The committee has a unanimous view that the government was unable to ensure price stability in the absence of administrative and magisterial powers. The committee asked the Finance Ministry to consult the stakeholders and give its recommendation in next two weeks on how to ensure price stability in the country.
Published in The Express Tribune, November 18th, 2011.
The government on Thursday confessed that the consumers could not get benefits of reduction in essential commodities prices because of hoarding as a parliamentary panel turned down an official call to completely adopt free market mechanism.
“Overall the international commodity prices are on decline since July but its impact will be visible after one and half month due to hoarding”, said Special Secretary Finance Rana Assad Amin here in a meeting of the subcommittee of the Senate Standing Committee on Finance.
The sub-panel has been constituted to review price hike and recommend measures to control the prices of the essential commodities. The Finance Ministry officials, however, cautioned that the declining trend may get reversed in January in the wake of reports that the world oil prices would soar due to increasing tension in the Middle East and the Gulf region.
The Special Secretary made an emphatic call to the legislatures to adopt single market mechanism-the free market, instead of experimenting both, the free market and the regulated one.
“The government has to decide between the state intervention and free market mechanism and if it decides for free market, the market forces will not disappoint”, said Amin.
However, his appeal could not impress parliamentarians who unanimously opposed the free market approach. “Ideally it is good to choose one system but practically it will leave people at the mercy of profiteers, hoarders and speculators”, said Senator Ishaq Dar, the sub-committee head and former finance minister.
Dar further said that free market was a wish of the West that wanted to control Pakistan’s agriculture market and at the same time the West was not ready to open its labour market for the country.
“The United States and European countries are still not free market economies in the true sense”, said Senator Sughra Imam of PPP.
Senator Professor Khursheed Ahmad said that the Finance Ministry should not blindly follow the free market notion of the West. He said only 30 per cent of the country’s economy has exposure to the world market while the rest is the domestic that is manipulated by cartels and profiteers.
The committee has a unanimous view that the government was unable to ensure price stability in the absence of administrative and magisterial powers. The committee asked the Finance Ministry to consult the stakeholders and give its recommendation in next two weeks on how to ensure price stability in the country.
Published in The Express Tribune, November 18th, 2011.