QUESTION TIME Getting prices to come down as oil tumbles is getting to everyone. But there is no need to get racial. Competition and regulation are instruments the government can use judiciously if the rhetoric is cut and the needful is done.

Certainly we can be sure that the way to bring down prices is NOT to boycott Chinese traders or Malay ones or Indian ones or Dayak, or Kadazan or whatever others. What we may - with emphasis on the word “may”- have to do is to boycott all traders who charge unreasonable prices.

Despite what  Agriculture and Agro-based Industries Minister Ismail Sabri Yaakob says there is no excuse to target any particular race as if they are the only ones who are responsible for high prices. Blanket boycotts don’t work, targeted ones might, the operative word being “might”.

As a former domestic trade and consumer affairs minister Ismail is surely aware that there are other means available for the government to control profiteering - the term used for those who make excessive profits from the sale of goods and services.

And he must know too that a boycott, especially along racial lines is a definite no in this multi-racial, multi-cultural country of ours where the championing of race is used by unscrupulous politicians to court popularity and support from the more extreme and vocal sections of the populace.

Malaysia is organised politically along racial lines and this has been going on after the second world war, a historical baggage over 70 years old. It is matter of public record that many of those who have advocated extremism in the past have ascended the ladder of politics much more rapidly. Ismail has regrettably chosen the expedient but less honourable path when he mixed up price with race into a single, explosive cocktail.

There are two pieces of legislation, both under the domestic trade ministry, which Ismail ( left ) headed not long ago, which helps in price control. The first is the Competition Act which was enacted to prevent the build-up of monopolies and oligopolies and to stop price fixing among key players.

The second is the Price Control and Anti-Profiteering Act which sets out measures to ensure goods which are price controlled are still available and empowers the government to step in when it is found that profiteering is taking place.

Between the two, the government has plenty of clout to ensure that there is fair competition among traders to ensure that prices are kept low and to deal with all manner of price fixing and profiteering.

For example, if the association of banana leaf restaurants sets the price of a basic meal at RM6, it may fall foul of the Competition Act because the process of setting market prices according to demand and supply is thwarted by an artificial floor price, effectively stopping competitive forces from determining prices.

Recovering genuine cost increases

But it is also incumbent upon the government to allow these establishments to recover genuine cost increases as and when that happens. The best way to do that is to relax requirements for the setting up of banana leaf restaurants so that competition will sort things out.

Similarly, if the associations responsible for school buses mandates a price increase (or cigarette companies, or breweries or airlines for that matter), they should have the Competition Act thrown at them for cartel-like behaviour.

One way of bringing down the cost of eating out actually does not have anything to do with food but water. There is an increasing trend among fast food joints and higher end restaurants to charge for tap water, or even worse refuse to serve tap water. That comes under profiteering because for less than a ringgit you get some 30 cubic metres of water - and that’s a lot of water.

In fact the domestic trade industry can easily help millions of consumers reduce the cost of eating out by decreeing that all food outlets must not charge for serving plain old tap water, either with ice or just plain old ‘suam’.

But while the former minister fumes racial epithets, trying to make that the reason why prices are sticky downwards, there is no visible action from the ministry he had previously headed to try and bring prices down.

Of course it is not all about regulation. You can regulate anti-competitive behaviour, you can stop profiteering but you need a philosophical as well as practical acceptance of competition as a means towards efficiency and therefore lower prices under a given set of circumstances.

Think about what that means. First you streamline procedures for setting up businesses. Anyone who satisfies set conditions should be given all approvals - automatically. Licences should be done away with completely in favour of meeting operating conditions.

If there are too many operators, the market will take care of that. If some operators are bullying their way to the top by initial heavy discounting to force out competitors and then dominating the marketplace, the Competition Act will take care of it.

But all that requires a commitment towards competition and towards streamlining all administrative blocks, which involves eliminating corruption. Is the government prepared to do that? Are the ministers prepared to stop pointing fingers and do the needful instead?

What’s required for prices to basically reflect input costs is liberalisation to allow as many market participants as possible, and fair and judicious enforcement of anti-competitive and anti-profiteering laws while streamlining approval processes.

It’s as simple as that.

P GUNASEGARAM is founding editor of business news portal KiniBiz .