THE market is afflicted by price volatility, determined not by cost of production and a fair profit, nor by demand and supply but by manipulation and hoarding of even essential commodities used by low income groups.
In the absence of strong and independent regulators, the market abuse is rampant- not a healthy sign for the development of a competitive emerging market.
The government’s overarching objective of economic growth propelled by private sector, ties its hands for any action aimed at breaking up of the cartels or for updating laws that could protect the interest of the consumers. Its sole prescription is to increase supplies through imports with uncertain impact on prices.
The unchecked price hike tends to remind the consumer that the market lacks a human face and the government is helpless about it.
So, prices of sugar, wheat, automobiles, cement and farm inputs etc continue to rise on one pretext or another including what is stated to be increase in domestic demand. Since the revival of the economy, the market is in the grip of speculative fever.
Looking at the price pattern of some of the major traditional industries , it would appear that competition is giving way to cartelization, which may eventually retard the development of the emerging market and economic growth.
While the emerging free market within national boundaries does empower individuals, partnerships, business firms and corporations with operational freedom within official policy framework, this freedom is not being exercised with responsibility. If the market rules of game are violated, independent and strong regulators are not there to protect the interest of the consumers.
The volatility in prices brings the issue of market abuse into the realm of governance or that of political economy. And the key to good governance lies in making the State Bank, SECP, OGRA etc autonomous so that special interests having access to corridors of power, are unable to influence the government to take decisions contrary to national policies formulated by the representatives of the people in the parliament. The consumer’s interests are not sacrificed for the benefit of a few. It should not be forgotten that it is the consumers who provide the producers the market for their goods and services.
The Central Board of Revenue should be made autonomous to do away with the SRO culture that is designed to suit individual enterprises. The lingering crony capitalism should not stage a comeback. The Federal Statistical Bureau should be independent so as to lend credibility to the inflation figures.
Laws against monopoly, cartels and oligopolies must be updated and regulators need to be strengthened, more so when state-owned monopolies like KESC and Pakistan Steel have been sold to the private sector.
But these issues are linked to a much bigger issue of democratic governance. Democracy is about sharing rights and the responsibilities linked to it. Authoritarianism and good governance are mutually exclusive.
