Necessity of a guided market

Trade Marketing Development, Cooperatives and Consumer Services Minister Bandula Gunawardhana in an exclusive interview with the Daily News said that timely intervention had succeeded in maintaining stable and reasonable prices of essential commodities like rice, milk powder, cement and LP gas.Certain private traders desired to make unreasonable profit but the strategies of the Government prevented it.

Question: Your Ministry has a direct impact on the public as the one responsible to ensure that people are given the opportunity to buy essential goods such as food at reasonable prices. During the past two years what were your achievements in this respect?

Answer: At the time I took over the Ministry I had to face three severe challenges. Terrorism had become a menacing threat. Internationally there was an oil crisis and the biggest food crisis was threatening the world after three decades.

But today we have been able to overcome these crises. We are in a position to be happy about the defeat of terrorism as well as having a stable and reasonable prices.

Q: There was a theory that trade and commerce as well as national resources should be managed by the private sector without state intervention. In our country too the governments followed the policy of not intervening in these areas. Good examples were the privatization of the CWE and selling the LP gas monopoly to Shell. Any comment ?

A: Leaving trade and commerce in the hands of the private sector without any government intervention is not a suitable policy. The government and the cooperatives should intervene in the market .

There should be a guided marketing system in a country. Therefore, for the first time after several years we adopted the policy of controlling the maximum prices of certain goods. If we had not done so the prices of some of these goods would have risen beyond reach.

We took steps under the Consumer Protection Act to stop the escalation of prices as well as hoarding of goods by certain traders. We were also able to set up a consumer court to uphold the rights of the consumer.

Q: Some people point out that the prices of certain goods had beyond the limits of affordability in recent times. Is it true?

A: It is correct that such a situation existed about one year back. If the prices of rice rose at the rate of prevalent at that time a kilogram of rice could have been more that 150 rupees today.

The importers of powdered milk requested that the price of a pack of 400 grams of milk powder should be sold at Rs. 320 but today a kilogram of rice is Rs. 70 and a pack of milk powder is Rs. 260.

It was possible to maintain these prices as we adopted a policy of state intervention. We have opened 100 Lak Sathosa outlets including those in the North and East. We also have 316 Coop Super outlets islandwide. Even in small towns 1000 mini Coop City Shops will be opened in the current year at a cost of 300 million rupees.

Q: In the past there were many problems in the state and cooperative sectors when they were expanded. Will we not see waste, corruption and fraud when they are further expanded?

A: Already a procedure had been adopted to prevent such evils. Surprise checks and auditing are in place to prevent such abuses. Inter-cooperative competitions to select the best among them are also being organized. This will help them to improve.

Q: During emergencies like the tsunami the Cooperatives were used to distribute relief to victimise communities. During the recent past attempts were made to do away with cooperatives. Now their importance is once again emphasized. Why ?

A: In addition to the public and private sectors the cooperatives function as a third force. President Mahinda Rajapaksa therefore allocated one billion in Budget 2009 to develop cooperative societies.

He also proposed to waive outstanding loans and the cooperatives were revived and the distribution of essential goods is done by the government through the cooperative societies. We have opened 354 Coop City super shops and 1000 mini Coop Cities will be opened in townships during 2009 with an allocation of 300 million rupees from the budget. A wide service for economic development is rendered by the cooperative societies.

The best example is the Kotapola tea producer cooperative that is manufacturing the best tea. In addition there are cooperative hospitals and production societies that contribute to national economic growth. Therefore the government is working towards developing this sector with a greater emphasis.

Q: During the past three decades the terrorist group led by Prabakaran had sabotaged the development of the country. When compared to other Asian countries like Malaysia, India or Indonesia we are not in a happy position today. In addition, weak rulers and bureaucrats are also responsible for this state of affairs. How do we develop our country at the national level?

A: I would wish to remind you about a statement made by a Finance Minister of Singapore. He said if you are in the farm work, if you are in a factory, work or in an office or a school work and even if you are at home work, there is no development without working continuously. This fact is true for us too. If we work honestly other weaknesses will be dispelled.

Q: The day of ending terrorism is not too far. What is your outlook for the future?

A: At least for five years all political parties should get together to develop the country. I believe that we have the opportunity in the recent history of our country under President Mahinda Rajapaksa now.

Politics should be likened to a religion and now all political parties should unite honestly to work together with dedication to develop the country. If that cannot be done it would be meaningless to be in politics.

(This interview was by L.S. Ananda Wedaarachchi)