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Government’s long term vision: Let market forces determine prices

Government’s long term vision as far as price controls and regulations are concerned, is to minimise regulations and let market forces determine prices.

This was highlighted by the Permanent Secretary for Industry and Trade, Shaheen Ali, yesterday at the 2013 Fiji Business Forum at the Holiday Inn Suva. But, Mr Ali said, price regulation will be maintained in areas where there is a necessity and where intervention is absolutely required.

“Such sectors would include basic food items and essential services, in order to ensure all Fijians are able to afford basic necessities – which the Constitution entitles them to,” he said.

“The Fijian Government is continually carrying out assessments and reviews with the view to providing parity, accessibility and confidence in the economy.”

Commerce Commission agrees

Commerce Commission chairman, Dr Mahendra Reddy, shared similar sentiments as Mr Ali. He said the commission wanted businesses to self regulate themselves and work according to certain guidelines on its own. But, Dr Reddy said price controls would need to be kept in place until such time when they see perfectively competitive market throughout Fiji.

“This will be until we see smaller number of households in Fiji vulnerable, until we see the economy grows and people are doing well everyone would be happy,” he said. “But until such time when we see less number of poverty-stricken households – we need to have someone independent look at this.”

Price control issue

Mr Ali stressed that the issue of price control was the source of serious debate not only in Fiji, but the world over and has often come under criticism in Fiji, at times, unfairly.

“Often these measures are viewed from a narrow self-interest perspective, when such policy needs to keep in mind our national interest and interest of all Fijian, especially the disadvantaged,” he said.

“Therefore, any pricing policy set by Government needs to be consistent with the supreme law of the land,” he said. “Fiji is not alone in utilising this policy tool; countries such as China, India, PNG and New Zealand all still maintain a certain degree of price control to optimise market conditions.

”He said the main objective of price regulation was to ensure fair and reasonable prices for basic necessities, including essential services, especially in sectors where competition is insufficient. “As policy makers, we need to ensure that there is a balance between regulation and the free market,” Mr Ali said.