Market should function naturally: minister
While rising commodities prices present a major problem, the government should refrain from exercising price control mechanisms, the minister for commerce said.
THE government should avoid exercising price control mechanisms on basic commodities, says the minister for commerce, despite the fact that rising prices present a major problem for many around the country.
Union Minister for Commerce U Than Myint urged yesterday that the market should be allowed to function naturally, despite the inflation that has beset the economy in the past year or so.
His statement followed a question from Bago Region MP Daw Khin Hnin Thit (NLD; Padaung) about whether or not there is a government plan to keep a lid on basic commodity prices.
U Than Myint said the ministry is keeping a watchful eye on prices, working in cooperation with merchant associations and wholesale centres to compile daily commodity prices around the country.
He says market controls mean a supply chain can’t function properly, and can tend toward the development of black markets. The government should look to examples of economic policies deployed successfully in other countries as a means for providing long-term support for the manufacturing and trade sectors, he said.
The minister noted commodity prices are not surging, but the prices of some goods are fluctuating naturally off the back of demand and supply.
“Under our evaluation, there are no dramatic fluctuations,” he said.
The ministry doesn’t control commodity prices directly but it has allowed import of some goods that are also produced domestically, when necessary.
“For example, we have allowed importing of green peas and white shrimp,” he said.
The development of the agricultural and livestock industry should be safeguarded by tax concessions on fertilisers, insecticides, equipment and spare parts, he said. Raw materials for animal food and pharmaceuticals used in the production process are also exempt from commercial tax, he said.
MP Daw Khin Hnin Thit observed that the falling value of the kyat has left many struggling – a fact that has been impervious to political shifts.
“The gradual rise in commodity prices is a major challenge for people under the new government. The previous government couldn’t fix this problem either. We found no drops in prices, but they continued rising after the new government took office,” she said.
Daw Khin Hnin Thit said that the income for rural producers is not in step with the price of their goods once they hit the market – something she believes explains the difficulty Myanmar has had when it comes to improving living standards among the general population.
“For the minimum wage, people get only K3600 per day. The lowest salary for employees is only K120,000 a month. They are the majority in the country,” she said.
Daw Khin Hnin Thit persisted, saying she was not satisfied with response from the commerce minister.
Speaker U Win Myint stepped in, saying that the minister could opt to answer her question at a later date. The minister took up the offer, saying he would formulate a more comprehensive answer and provide it in a written letter.
Myanmar’s inflation was 2.82 percent in 2011-12, then climbed in 201213 to 2.85pc. In 2013-14 it rose to 5.7pc, increasing again in 2014-15 to 5.9pc. In 2015-16, it hit 11.44pc.
Things have shifted somewhat, the Union minister observed, with inflation figures for November 2016 at 8.26pc.
He indicated that Myanmar’s ongoing inflation woes are down to a number of key factors, including the increased amount of currency raised during the last two years.
Exports have decreased due to crop damage from flooding, and the price of natural gas has fallen. The market has also had to contend with increased transportation charges, wages and service expenses, he said. Market speculation plays a driving role.
“Commodity prices have risen due to increasing demand, and the demand has increased due to rumours and expectations of the public,” he said.