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DateLine Sunday, 8 April 2007

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Government Gazette

Govt's move to reduce COL

With the Sinhala and Tamil New Year around the corner, traders and retailers make the highest profits, exploiting consumers to the maximum.

The Government taking cognizance of it took measures to reduce the prices of several essential items.

The Cost-of-Living (COL) has been generally used as an effective tool by successive oppositions to pressurise a Government. But the situation has changed drastically this New Year as far reaching decisions taken by the Government have been instrumental in slashing the prices of essential commodities.

When the Government initially looked at ways and means to find a solution to the rising COL, big-time importers of essential goods were summoned to Temple Trees for a fruitful discussion with President Mahinda Rajapaksa.

Under the initiative of the President, a mechanism was formulated to reduce the prices of essential goods. Eventually, the wholesalers agreed to maintain the maximum price of ten additional essential items, apart from the four items which already had a maximum price tag. The current open wholesale price on some commodities such as sugar is a couple of rupees less than what was agreed upon.

As the Trade Minister Bandula Gunawardena quite rightly pointed out at a recent news conference, only four items were declared essential items in the UNP's Presidential election manifesto of 2005. For example, a kilogram of sprats was stipulated at Rs. 185, that too only for a specified period of one year.

Thanks to the agreement reached between the Government and the Pettah wholesalers, it has been agreed to maintain the maximum price of Rs. 165 for a kilogram of sprats, which is much lower than what the 2005 UNP Presidential candidate Ranil Wickremesinghe promised.

As Minister Gunawardena points out, the prices of dried chillies and sprats have come down by a significant margin per kilogram.

Similarly, the prices of 14 essential items, including canned fish, dhal, green gram, wheat flour, potatoes and big onions, have dropped sharply after the agreement was signed. Political opponents, who look for opportunities to capitalise on achieving their ends, may argue where on earth could one buy those commodities at these prices. But economist heavyweight turned Minister, Bandula Gunawardena has drawn up made an effective plan to meet the challenge.

Though the previous Government destroyed the CWE, Minister Gunawardena has opened nearly 55 Lak Sathosa outlets to offer those essentials at affordable prices. In order to strengthen this mechanism and maintain an islandwide distribution, the Government would make use of 6,000 odd multipurpose co-operative outlets to offer essential goods at affordable prices.

There are ten economic centres, including those at Dambulla and Welisara, operating smoothly. The brainchild of Minister Gunawardena, the economic centre concept has thrown most middlemen out, thereby passing on that price advantage to consumers. Simultaneously, Minister Gunawardena has created a set of enemies who have been adversely hit by the new move, which makes both the wholesale and retail prices a public secret. Hence, the prices of those essential commodities are public knowledge and suppliers to government institutions and other establishments cannot quote the high prices they have been used to for many years.

The Trade Ministry has also given more muscle to the Consumer Protection Authority by invoking clauses of the existing Act, in the best interests of the public.This is not just the beginning, but a commendable effort by the Government to protect consumers. There have been wholesalers who made extraordinary profits at the expense of the poor consumers. Even though the prices in the international market have virtually been the same, many of our traders exploited the consumers to the maximum, especially during the festive season, be it the Sinhala and Tamil New Year or Christmas.

The Government has now found an effective mechanism to protect consumers against all odds. Instead of trying to take political advantages, it's the duty of a responsible opposition to support the Government in this cause.

No political party would like to remain in the opposition for too long. Losing 14 successive elections, including two Presidential elections is no doubt a long wait for any party. But that does not justify the UNP making use of the New Year to harm national interests. Responsible politicians should have an open mind and acknowledge the good initiatives even by their opponents. This is absolutely necessary if those politicians are genuinely interested in the well-being of their people, not merely their party supporters. Constructive criticism is welcome by all means so that the Government could rectify whatever weaknesses associated with the mechanism introduced to reduce the COL. Price control may not be the only solution to meet the challenge of the rising COL.

Fluctuations in world prices and stability of the rupee against the dollar are decisive factors. Nevertheless, if we could draw up a mechanism to curtail excessive profit margins by the middlemen, we would be in a position to meet the challenge. There may be certain areas that could be strengthened in this mechanism. It's the duty of all politicians, who too are consumers, to point out the plus and minus points and help Minister Bandula Gunawardena in his unrelenting efforts to protect consumers.

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