Cartelization – a menace for Pakistan
The topic is not a new subject for our society and markets. The people of Pakistan have remained under the grip of one or more cartels since its creation. History proves this issue and we have witnessed volatility of this issue and counter actions of the past regimes to address this problem. However it has developed new dimensions in last few months and has significantly targeted the population of our poverty ridden country. We need to ponder on its causes, the consequences it has ensued in our daily lives and the remedial measures to counter its threat in the wake of Covid 19 pandemic. The popular talkshow Dunya Kamarn Khan ke Saath of 16th June 2020 has highlighted some pertinent observations and solutions to this problem. I have pasted following link for the interested readers to watch and listen the participants who have briefly painted a grim picture of our markets under the unlawful influence of such cartels.
The cartels are groups of people involved in various businesses particularly in supply of food commodities and in control of their price in a country where corruption and nepotism is rampant. They tend to manipulate the market for their advantage and to fetch unchecked huge profits. The consumers are at the mercy of these cartels and helpless to oppose their dealings.
The main cause of this problem is the absence of any regulatory frame work enacted by government and enforcement of its laws if exist. While Government of Pakistan has made some efforts in establishing a body known as Competition Commission of Pakistan as per provision of constitution however it is utterly dormant in carrying out its functions. Another area of concern is lack of governance by local bodies under the jurisdiction of provincial governments. The price control committees provide a mechanism to deal with this issue however due to political and social issues the committees are inactive to the detriment of poverty ridden peasants.
The solution of this problem is the breaking of market hegemony of these cartels through creation of competitive environment. The above mentioned Competition Commission of Pakistan has necessary mechanism to build up a frame work in order to access local markets. A comprehensive market strategy may be adopted making effective use of electronic and print media that would be needed to accomplish this task. The utility stores corporation needs to be reorganized with more resources to access local markets in towns and villages. Moreover the price control committees be made more authoritative under the control of commissioners and deputy commissioners, in case of villages and towns it is the AC.
The prevalent environment under Covid 19 pandemic demands that government needs to adopt strict measures to provide relief to common man.PM has already initiated inquiries and investigation against Sugar, flour and fuel cartels with raids and arrests. However government still lacks sufficient will to disrupt the market hegemony of these cartels. The government may impose heavy penalties and sealing their sale outlets to ensue deterrence. These actions could certainly improve the environment and restore confidence of people in the government.
Mufti Muhammad Khalid
Email: mufti_khalid@hotmail.com
The writer is a retired Air force officer who has a passion for reading and aims to pen down his thoughts with this beginning.
dear babar thanks for compliments.
there are other cartels in Pakistan such as Drugs cartel, dairy cartel, meat and poultry cartel, fruit and vegetable cartel. these cartels control markets on their own whims. except for drug cartel which is under the monitoring of DRAP(drug regulatory authority of Pakistan) others are working freely without any check from federal or provincial governments.
the consumer is generally at the mercy of these cartels. however in present age of information technology the consumers may make use of social media to highlight the malpractices of these cartels and to invite government channels to address this issue.approaching judiciary would be an expensive option for the public due to various social moral and economic issues.
competition commission of Pakistan is the sole body which has necessary legislative and constitution provisions to deal with this problem. however it is again a federal subject. at provinces we have price control committees under the control of commissioners who have full jurisdiction to implement government polices.
after the incorporation of 18th amendment in the constitution our country is facing a dilemma of power sharing and authority. the provinces have become the landlords and do not pay heed to any credible advise of federal government.
Good article. some questions:
1. In addition to sugar and oil, are there also some other major cartels in Pakistan?
2. Any examples of such cartels?
3. Is there anything that a commoner can do to reduce the impact of this cartel? 4. So is it that the government need to introduce some tough new legislation to address this issue, or to update existing legislation to give it teeth, or fairly and strictly implement the existing legislation, or revamp the regulatory bodies to make them stronger? any thoughts?