The Price Control – Draconian and Anachronistic
The imposition of price control has unquestionably and single-handedly been responsible for killing the entrepreneurial and business spirit in
As we enter the month of October, the month of reckoning for President James Michel, it is hoped that he will do away with this ridiculous invention as he embarks on his programme of foreign exchange liberalisation and economic reforms to fulfill his electoral pledges. Under this preposterous law traders and shopkeepers have been known to be fined up to Rs800, 000 or more for selling goods above the price control, even by one cent.
Small and recently established businesses encouraged by the SPPF were not spared the wrath of the dreaded price control officers. One such small shopkeeper who had just recently opened a small stationery shop in Trinity House had to close down abruptly after a visit from the price control officers which resulted in 8 counts of price control violation being filed against him and an Rs80, 000 fine swiftly followed in the Courts. The Courts warned the shopkeeper that if he fails to pay the fine he will be sent to prison.
As the economic crisis bites due to lack of foreign exchange, most merchants have resorted to the “alternative” or “black market” to buy more expensive foreign exchange. This necessarily means higher retail prices which the SPPF government used to accuse merchants of “profiteering”. The Government obstinately refused to acknowledge the source of the problem of high prices for obvious political reasons and consistently launched attacks on the merchants accusing them of making huge profits on “cheaply” imported goods. It was not surprising for many merchants to receive regular visits from the price control officers and subsequently charged for each item which they were deemed to be selling above the controlled prices. This resulted in the merchants being charged with a multitude of price control related offences; sometimes as many as 20 offences in each charge, each attracting a minimum mandatory fine of Rs20, 000.
Although regular visits from price control officers have become less frequent, the abolition of the price control regulation cannot come soon enough. If abolished or repealed, it would also help to restore the entrepreneurial spirit of the Seychellois and even help to bring prices down. The folly and effects of the price control is obvious for all to see and many have experienced its cruel impact first hand. It is one of the many economic disasters of the SPPF Government over the past 30 years. In any event, with the abolition of the import permit regulation for most imported goods many are questioning the “raison d’etre” of keeping the price control regulation. The “Coup de grace” is therefore long overdue. It remains to be seen whether President Michel will have the courage to oblige.