20080901 jim saksi press statement on fair trade act

8/8/2019 20080901 JIM SAKSI Press Statement on Fair Trade Act

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Dear Editor,

As an NGO concerned in the welfare of the society, JIM (Jamaah Islah Malaysia) wishesto invite the government to tackle the grouses of the abrupt rise of cost of living amongMalaysians with the Islamic spirit of prudence and justice in mind. Among the grousesthat has been repeatedly highlighted is on the simultaneous and steep increase of the

prices of essential goods and services whenever the ceiling prices of input materials areincreased.

JIM understands the need of the government to fix the prices of certain essential goodsand services in protecting the welfare of the underprivileged section of the society,while at the same time maintaining the competitive nature of private businesses inoffering their best products and services to the consumers. Therefore, JIM hopes thatthe government rectifies the loopholes of the Price Control and Supply Control Acts thatmay cancel out the positive benefits of the proposed Fair Trade Act which will be tabledin the Parliament end of this year.

Trade collusion has always been the coping mechanism for producers to maintain profitin the presence of government supply intervention (through price ceiling, quota,monopoly etc). Hence, JIM believes the recent call towards the de-monopolization of PUSPAKOM serve as a positive sign that the Malaysian businesses and consumers wantgreater efficiency of trade in Malaysia through proper implementation of anti-competitive regulations and policies in line with the principles of transparency,accountability and integrity.

Both Pan Malaysian Lorry Owners Association (PMLOA) and Pan Malaysian BusOperators Association (PMBOA) have been welcoming the call to abolish PUSPAKOM’smonopoly albeit their own respective anticompetitive and cartel-like business practicesafter the recent pump price hike. Northern states’ lorry operators affiliated with PMBOAhad been reported to collude into a 35% rate increase strategy in June 2008 andKenderaan Transnasional Berhad (KTB), a member of PMBOA, had misconstrued the

CVLB’s setting of bus fare’s ceiling price as a valid excuse to get into a price fixingscheme with its rival, Seranas, on the highly competitive Federal Highway bus route inAugust 2008.

Prices of transported goods were hiked with similar indiscretion as the PMLOA members’trade collusion, and the public transport industry had failed to streamline theiroperations (for the benefit of the users) the way they streamline their profits (for thebenefit of their shareholders). In the end, any other businesses not directly impacted bythe fuel hike have no choice but to increase the prices or reduce the quality of theirdeliverables to remain competitive and everyone within the economy will end upnegatively affected.

Various texts in the Quran and the Prophetic Traditions regard monopolistic and tradecollusion behaviors as detrimental to the facilitation of the exchange of private goodsand services that is supposedly to justly serve the rights of all involved parties. Likemodern economists, past Muslim jurists well-versed in economics have allowed pricecontrol mechanism only in trades where the interests of the general public can’t be

justly served by the free hands of the market forces.

Such trades, which involve public goods and services such as public transportation andpublic service concessions (such as vehicle inspectors, highway operators and water



suppliers) must be made thoroughly accountable to the stakeholders through stringentmonitoring of key performance indicators, the way standardization of weights andmeasures are enforced to ensure fair trade during the Prophetic era in Madinah. If thetrusted providers with exclusive rights to deliver public goods and services fail to shapeup, they must be rightfully asked to ship out.

With rightful distribution of risks and responsibilities between the relevant authoritiesand the private investors, a fair level of playing ground with high degree of accountability can be achieved. The exclusivity of rights to deliver public goods andservices must be properly managed by the elected government servants with the rakyatas their sole beneficiary, and without destroying the competitiveness among privateinvestors in delivering their best.

JIM wishes that the government as a responsible caretaker of the consumers andbusiness owners interests will be able to formulate and implement a prudent and justFair Trade Act so that the current trend of rapidly increasing cost of living can be halted,or even reversed.

M Zulkarnain HamzahCommittee of Good Governance and Social Justice, JIM

Reference

The Star - Wednesday June 4, 2008Fair Trade Act needed to curb malpracticeshttp://thestar.com.my/news/story.asp?file=/2008/6/4/nation/21445124&sec=nation

The Star - Thursday June 5, 2008Lorry operators in northern states increase rates by 35%http://thestar.com.my/news/story.asp?

file=/2008/6/5/nation/20080605164334&sec=nation

The Star - Sunday August 31, 2008Transport Minister studies requests to remove Puspakom's exclusivityhttp://thestar.com.my/news/story.asp?file=/2008/8/31/nation/22212727&sec=nation

PS The writer owns hard evidence on price-fixing scheme between competing CityLiner Selangor (subsidiary of KTB) and Wawasan Sutera (owned by Seranas) bus operators.

http://thestar.com.my/news/story.asp?file=/2008/6/4/nation/21445124&sec=nation








20080901 jim saksi press statement on fair trade act

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