The government plans to re-enforce article 10 of the Competition Protection and Monopoly Prevention Act (CPMPA), according to Minister of Industry and Foreign Trade Hatem Saleh.
The Citizens Against Price Rise Association (CAPRA) recommended reviving article 10 of CPMPA, which stipulates that the prime minister has the right to set the price of one commodity or more when needed, or in the event of crisis.
Activation of Article 10 should not be interpreted as return to totalitarian economic policies that impose price lists on all commodities, but aims at regularising the market and protecting citizens from monopolistic practices of some traders, according to Mahmud el-Askalani, coordinator of CAPRA.
“The government dealt with businessmen and traders with the logic that they realise the interest of the country and that they take into account the social dimension, but unfortunately they were not at that level of responsibility,” El-Askalani said.
A number of monopolies emerged in the aftermath of the 25 January uprising and the ensuing political turmoil. Prices increased and some traders exploited loose government supervision to manipulate prices to make higher profits.
Price hikes were a persistent problem in Egypt under the ousted Mubarak-regime in that prices did not always correlate with patterns of supply and demand. According to economic pundits, the problem of price hikes during the past ten years is attributable to corruption stemming from the crony capitalist framework established during the Mubarak years.
El-Askalani argued that Ahmed Ezz, Iron and Steel tycoon under the ousted regime, exploited his position in the ruling National Democratic Party (NDP), to evade the CPMPA and thwart the enforcement of article 10, during the mandate of Rashid Mohamed Rashid, former Minister of Industry and Trade in Ahmed Nazif’s Cabinet. “Ahmed Ezz amended the CPMPA in his own handwriting,” El-Askalani said.
The existing legal framework does not provide adequate market regulations according to experts. “There are two separate laws; the Consumer Protection Act and the CPMPA,” said El-Askalani. A unified legal framework that imposes control on prices and prevents monopolies is needed, he said. A Fair Trading Act, as exists in Britain and other European countries, could regulate the market and avoid the potential for monopolies.
“The Citizens Against Price Rises Association has been lobbying to enforce such legal acts under the ousted regime and up until now, though our demands have been persistently met with deaf ears on the part of the government,’ El-Askalani said. He also stressed that the goal is to have a legal structure that preserves the rights of traders, producers and consumers. Market regulation is crucial for economic and social stability, which would translate eventually into economic development.