Ratio Magazine :: The Inside Track to East Africa’s Economies - Ratio Blog: Homework Instead of Price Controls

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Ratio Blog: Homework Instead of Price Controls

Monday, 05 July 2010

Stories of character development and personal struggles make for great movies: The baddie who keeps getting away with being a baddie, the good person struggling to stay good against temptation, the conflicted one seeking redemption. Like everyone else, I like to crash out in the evening after work and be entertained, and I prefer such stories to car chases. And you don’t need to go far: Just switch on the 9pm news, and hey presto, the whole range from high drama to high comedy, with lots of human interest.

Gideon Moi, shining liberation hero of the grassroots, humbly emerging into the limelight after years of fighting for the rights of the disenfranchised. William Ruto, heroic defender of the unborn life, a storyline that almost works if we ignore for now that he still has a question or 20 hanging over his head regarding the very much born-already lives of those killed in, and hunted away, from the Rift Valley. The latest instalment was the popular uprising in parliament, the call to arms to fight for the defenceless, the televised revolution: We must feed our people! MPs have practically taken to sleeping in the cold and wet fields in solidarity with the hungry, steadfastly refusing to back down in the face of cold, heartless capitalism. Feed our people, no matter what price we may have to pay.

Actually, no: Because they propose to wage this heroic, selfless war through price controls on basic foodstuffs and fuel. That’s where I believe someone has truly lost the plot of whatever play we’re watching. Price controls, dear members of parliament – now, really? So old school, and not in the charming way of Gucci re-releasing stunning handbag models from the 1970s. As a policy, it contradicts the government’s professed free market approach. Had they spent five minutes on research, MPs would also know that it’s usually an unproductive move: if food production becomes unprofitable because the sales price is capped and doesn’t take into account the production costs, then food producers will stop producing food – which doesn’t quite strike me as the solution to the problem. And yes, food producers here include all those small farmers that you also occasionally go on the barricades for, too.

In principle, food should of course be affordable. But to take the Neanderthal club of price controls to this problem is cheap populism and resolves none of the issues that affect the costs food production: high electricity costs, shabby transport infrastructure, defunct agricultural outreach services, a generally difficult and therefore costly business environment, and so on. Take another look at that list: because it’s your MP homework to fix this. That’s what you were elected for. So stop bailing out of that responsibility.

And I found the timing of the bill supremely ironic: It coincided with the two permanent secretaries who had been suspended over the maize scam quietly been reinstated. Internal Security Minister George Saitoti has reportedly said that three month suspension ‘was punishment enough’, a statement that betrays an odd grasp of both legal concepts and right and wrong. So we’re screaming for price controls – but two public officials get away with three months gardening leave after presiding over the sale of subsidized maize to corrupt middlemen who kept the balance and sold the maize into the market at the usual high prices? What’s with all the other political players who have been involved in fleecing the subsidized maize imports? It’s snoringly familiar: Large-scale theft, public complaints, commission of inquiry, crescendo – and great big nothing.

So in the variety show that is daily news, I almost fell off the sofa laughing when I saw Speaker of Parliament Kenneth Marende a few evenings ago: Prime Minister Raila Odinga had cunningly handed over responsibility for answering questions on the maize scam investigation to Minister of Internal Security George Saitoti. Marende clearly had no patience left for evasive maneouvres and told him, to all intents and purposes, to just bloody table that thing. I’m paraphrasing here. But judging from how Saitoti – who usually just wags an admonishing paternal finger – spluttered and fluttered his papers, Marende must have been onto something.

Republished with kind permission from The Star.

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