by Surendra BISSOONDOYAL

The disturbing news about how Desbro was forced to close down is a matter of concern. The perception in the public is that this is the result of the misuse of price fixing. It is time we have a fresh look at this policy in the light of recent problems.

Basic necessities were subsidized and imported by government in times of shortages to fight monopolies and to safeguard the interests of customers. But then governments also wanted to fix the price of non-essential commodities and set up the State Trading Corporation to import such other products.

?As l?appetit vient en mangeant?, allegations of shady deals started to be made. If monopoly is bad and should be got rid of, this applies to government monopoly as well. The Permit Raj in India prevented the transformation of the Indian economy into a modern, competitive economy and gave rise to a parallel economy thriving on corruption. With the Permit Raj cut down to size the Indian economy is booming and is now a force to reckon with in the global marketplace.

But the battle is not over yet. The recent standoff between farmers and State governments which wanted to force them out of their land to give it to big investors for industrial development has given rise to a more civilized form of negotiation. Reliance, one of the top Indian conglomerates, is offering farmers three options to acquire their land for a mega project: Rupees 500,000 per acre; Rupees 60,000 per acre per annum in perpetuity and a share in the project.

The lesson that we should draw from this is that the best government is least government. Governments should not be in the business of trade, but should see to it that trading is fair.

It is with this in view that the UK set up the Office of Fair Trading (OFT) in 1973 as the UK?s "consumer and competition authority". In its 2005- 06 Report the OFT reminded the public that its aim is "to improve the welfare of customers by working to bring about competitive and efficient markets and by thwarting deceptive and coercive trading practices?

When markets are working well, good businesses benefit too. " The OFT has the power to prosecute business concerns which are abusing their position to make claims or profits.

In December 2006 the European Court of First Instance upheld a ruling by the EC that France Telecom had abused its dominant position. In 2003 France Telecom had been fined 10 million euros for its predatory pricing policy.

It is high time to set up a similar independent body in Mauritius and do away with the price-fixing saga, which can make Ministers and top Civil Servants suspect in the eyes of the public, apart from encouraging monopolies and cartels and creating artificial scarcities.