Ministries can't stop meddling

The meddlesome Ministries are at it again. The UAE’s Higher Committee for Consumer Protection, under the Ministry of Economy, is telling private business what they think constitutes a right and proper price rise. Water, rice, cement and fast food suppliers are affected.
The move is a response, reportedly, to a 30% price hike by Oasis water during the summer. Consumers complained and the Ministry felt it should act. Could they not have told consumers to buy another brand of water?
The meddling is the latest example of a culture of Government interference, and comes in the same week as the UAE commits to backing a Bahraini proposal to set a six-year visa cap on unskilled worker visas. And it is not unique: in the run-up to its presidential election, Russia has imposed price controls on basic foodstuffs, and plans an export tariff on wheat. China already controls prices; other importers, including Egypt, Jordan, Bangladesh and Morocco, are increasing subsidies or fiddling with their tariff regime.

The government is right to be concerned about the cost of living for the very poorest in the community, but price fixing is not the solution. It distorts the market, prevents the most efficient flow of capital and undermines business. If consumers won’t pay high prices, someone will find a way of selling at a cheaper price. It shows a lack of trust in free enterprise and that meddling is the default-setting.