Friday, June 27, 2014

Qaboos Keeps Price Controls

In Oman, Sultan Qaboos has put on hold a plan to scrap most price controls:
Oman’s ruler Sultan Qaboos Bin Said has put on hold the government’s decision to scrap price controls for most products after a public uproar triggered an intervention by his consultative council, state news agency ONA said.
Under new rules announced last week, retailers and traders no longer needed to ask the government for permission to raise prices, except for 23 basic items such as rice, tea and fish which remained controlled.
But after debating the new rules on Tuesday, the advisory Shura Council drafted a letter to the Sultan, recommending that he postpone their adoption until other laws protecting consumers and preventing monopolies could be enacted.
“The Council agrees completely with the principles of free-market economy and that the state shouldn’t intervene in the market, leaving it to the power of supply and demand,” ONA quoted the letter as saying...
The new rules had caused an unusual public furore in the the country, with hash tags objecting to the reform drawing tens of thousands of tweets, even though economists predicted only a minor impact on inflation.
It is not clear to me that the Shura Council knows what a free market means, if they linked support of one to a continuation of price controls.  In terms of regional politics, this shows the Gulf rulers are still attentive to public outcry, a sensitivity which was heightened by the Arab Spring.



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