A ceiling will be imposed on the price of essential foodstuffs like lentils and flour in order to maximize Algerians' purchasing power.
By Nazim Fethi for Magharebia in Algiers – 24/02/10
Algeria will subsidize 15 basic food products and limit their price in an effort to cope with runaway inflation, Commerce Minister El Hachemi Djaâboub announced last week.
"We've found that some traders are abusing the system and taking advantage of their dominance," Djaâboub said on national radio on February 13th. "Enforcement officers are aware of these practices and can do nothing. We've decided to intervene to bring order to the market." Price ceilings will be placed on dried legumes, sugar, tea and coffee, as well as other groceries, whose prices soared in recent months, Djaâboub said.
Lentils, on which many families depend for sustenance, have reached 140 dinars per kilogram, while the price of sardines has soared from 250 to 400 dinars per kilo.
"The state can intervene and fix prices of certain products" in accordance with the existing Competition Act, Minister Djaâboub told APS on February 10th. "Unreasonable increases" in the price of essential products, such as milk and flour, allow the government to intervene, he added.
A new law is also in the works to expand the list of subsidized products.
"Currently, we're working on a new law to modify, amend and complete the Competition Act," the general director of the Trade Ministry's economic control and fraud repression department, Hamid Boukahnoune, said at a seminar on February 4th.
Revising the law will allow the state to intervene in situations of unjustified price increases to guarantee regulation and prevent monopolies from arising.
"We must be aware that the current law allows the state to intervene to fix only the price of certain products…The new bill will allow the state … to intervene [and] fix the profit margins and prices for all products, especially those currently facing problems, such as fruit and dried legumes", added Boukahnoune.
Under the proposed law, the Commerce Ministry will have the authority to fix the profit margins and prices of products and services through an executive decree, determined on the basis of price margins suggested by relevant experts and the as-yet-unformed Competition Council, Djaâboub told APS.
Food importer Hamid Soltani is outraged by the new measures and claimed that Algeria is returning to a state-controlled economy.
"This 'profit margins' excuse is a cover-up to prevent us from working freely," he told Magharebia on February 14th.
"I used to import dried legumes from Turkey, and they were sold at a reasonable price (less than 80 dinars a kilo)," he said. "The Turks decided to grow something other than dried legumes, which explains their scarcity and high price at the moment. If sugar is expensive on the global market, is it the Algerian traders' fault?"
Retailer Said Kharroubi is also frustrated by the government's response to high prices.
"Instead of encouraging Algerians to grow these products locally, the government wants to impose prices in exchange for social peace," he told Magharebia on the same day. "We will not sell for a loss."
Halim, a student, said the problem of regulating food costs cannot be easily solved by a price ceiling.
"The government often reacts with laws that are never implemented. The traders always find excuses to increase prices…I think the government has no political will to put an end to the parallel economy, which satisfies the consumption of millions of Algerians neglected by the government."
Source: Magharebia.com
Link: http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/features/2010/02/24/feature-03.
By Nazim Fethi for Magharebia in Algiers – 24/02/10
Algeria will subsidize 15 basic food products and limit their price in an effort to cope with runaway inflation, Commerce Minister El Hachemi Djaâboub announced last week.
"We've found that some traders are abusing the system and taking advantage of their dominance," Djaâboub said on national radio on February 13th. "Enforcement officers are aware of these practices and can do nothing. We've decided to intervene to bring order to the market." Price ceilings will be placed on dried legumes, sugar, tea and coffee, as well as other groceries, whose prices soared in recent months, Djaâboub said.
Lentils, on which many families depend for sustenance, have reached 140 dinars per kilogram, while the price of sardines has soared from 250 to 400 dinars per kilo.
"The state can intervene and fix prices of certain products" in accordance with the existing Competition Act, Minister Djaâboub told APS on February 10th. "Unreasonable increases" in the price of essential products, such as milk and flour, allow the government to intervene, he added.
A new law is also in the works to expand the list of subsidized products.
"Currently, we're working on a new law to modify, amend and complete the Competition Act," the general director of the Trade Ministry's economic control and fraud repression department, Hamid Boukahnoune, said at a seminar on February 4th.
Revising the law will allow the state to intervene in situations of unjustified price increases to guarantee regulation and prevent monopolies from arising.
"We must be aware that the current law allows the state to intervene to fix only the price of certain products…The new bill will allow the state … to intervene [and] fix the profit margins and prices for all products, especially those currently facing problems, such as fruit and dried legumes", added Boukahnoune.
Under the proposed law, the Commerce Ministry will have the authority to fix the profit margins and prices of products and services through an executive decree, determined on the basis of price margins suggested by relevant experts and the as-yet-unformed Competition Council, Djaâboub told APS.
Food importer Hamid Soltani is outraged by the new measures and claimed that Algeria is returning to a state-controlled economy.
"This 'profit margins' excuse is a cover-up to prevent us from working freely," he told Magharebia on February 14th.
"I used to import dried legumes from Turkey, and they were sold at a reasonable price (less than 80 dinars a kilo)," he said. "The Turks decided to grow something other than dried legumes, which explains their scarcity and high price at the moment. If sugar is expensive on the global market, is it the Algerian traders' fault?"
Retailer Said Kharroubi is also frustrated by the government's response to high prices.
"Instead of encouraging Algerians to grow these products locally, the government wants to impose prices in exchange for social peace," he told Magharebia on the same day. "We will not sell for a loss."
Halim, a student, said the problem of regulating food costs cannot be easily solved by a price ceiling.
"The government often reacts with laws that are never implemented. The traders always find excuses to increase prices…I think the government has no political will to put an end to the parallel economy, which satisfies the consumption of millions of Algerians neglected by the government."
Source: Magharebia.com
Link: http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/features/2010/02/24/feature-03.
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