NO to Prices Regulation

Panamanian businessmen say the proposed regulation of prices is wrong, irresponsible and harmful.

Monday, December 10, 2012

A statement from the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP):

PRICE REGULATION PROPOSALS ARE INCONVENIENT

In recent days, different politic groups have proposed the regulation of food prices as a measure to counter the rising costs of basic goods, which remains a major concern for Panamanians.

Our guild is aware that this is a situation that needs to be addressed with priority, but, also, to be effective, actions should not go against the principles of free enterprise enshrined in the Constitution of the Republic of Panama. That is why we join the voices that consider that resorting to price regulation would be a wrong, irresponsible and harmful measure, first, for attacking the principle of competition, but more importantly, for the negative effects this initiative would have on food security.

The experience of implementing a freeze or price regulation in other countries, shows that these measures only mask the problem and ends up generating greater harm, because it does not incentive supply or production, thus resulting in shortages of the affected products, which often encourage black markets in which there is no price or quality controls by authorities.

We call on politicians to join in the search for solutions that are based on the creation of policies to improve technical support and provide incentives to farmers and ranchers, which strengthen the sector's growth, increase quality and productivity. Only then we will get a more diversified basket that is less expensive, healthier and more abundant, with all the benefits of free competition.



More on this topic

The Never Ending Price Controls in Panama

January 2018

For the seventh time since 2014 the Varela administration has extended the measure that regulates the maximum retail prices of 22 products in the basic basket, up until July 2018.

From a statement issued by the Presidency of Panama:

The Price Control measure continues to offer great economic benefits to Panamanians.  If not implemented in 2014, by instruction of President Juan Carlos Varela, the basic food basket would cost B/. 394.15 balboas, that is to say, B/. 80.04 more than what is currently paid for the 22 controlled products.

Panama: Proposal to Regulate Prices of Basic Foods

May 2014

President-elect Juan Carlos Varela has announced plans to establish price controls on food products in the basic basket.

The purpose of the measure, which would directly affect the prices of rice, cheese and meat and other products in the basket is to minimize the cost of living and prevent speculation on the part of suppliers.

The Risks of Price Control Decrees

October 2011

Any measure that seeks to control the price of any product will generate shortages, black markets and real increases in prices.

A statement from the Chamber of Commerce and Industry of El Salvador reads:

The Chamber of Commerce and Industry is calling on the authorities to consider that in El Salvador economic relations are governed by the free market system, which requires free prices, free competition and full legal certainty, and that state intervention is only legitimate when it seeks to avoid distortions that affect the free market, such as monopolies, unfair competition, systems of privilege and general subsidies, but not to regulate, arbitrarily, the prices of products and services.

Changes in Consumer Basket in El Salvador

December 2009

The country's new Consumer Prices Index will come into effect in the first months of 2010.

As consumption changes, authorities have decided to modify which goods are included in the basket used for measuring consumer prices.

"Héctor Dada Hirezi, Economy minister, explained they are close to announcing the new Consumer Prices Index (IPC), which would be implemented next year", reported Laprensagrafica.com.

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