Competition Commission forced by the SC to discourage competition

Has anyone noticed the Supreme Court's recent instructions that the Competition Commission Pakistan fix the price of sugar? I'm assuming that it is not entirely awake to the irony of a competition watchdog fixing prices. Its Econ 101 Mr. Chief Justice. The way to ensure that sugar finds its optimal price is to strictly impose anti-cartel laws. If each sugar mill is setting its price independently, the retail cost will come down automatically: without an agreement between mills, it is in the interest of every mill to keep its prices as low as possible to get an edge over the competition.

Fixing prices may seem like a more surefire way of doing things but it has proven to be impossible to implement so far. Plus, its notoriously difficult to determine the optimal price. But suppose the government does manage to enforce an ideal fixed price, if and when the production costs of sugar increase, the fixed price will drive mills to bankruptcy, creating a genuine supply crisis. And if the government then decides to raise the price for legitimate reasons it will have a political disaster on its hands. Better to let the market take care of all that and let the CCP do its real job.

How Industrialist Greed is a Good Thing a.k.a. Why You Should Vote for the PPP Again

You have to give Prime Minister Gilani credit for finding a silver lining where none seems possible. The sugar crisis is apparently a godsend for Pakistanis. You see we consume way too much sugar. At 25 kilos of sugar per person per annum, we beat sugar consumption of Indians (14 kilos), Bangladeshis (11 kilos) and the Chinese (10 kilos) by a mile. And you know nothing good comes from having sugar. Just cavities, diabetes and obesity. If the News is to be believed, Mr. Gilani is very alarmed. He is worried sick about this nation’s health.

It can only be a good thing then that the government has failed to stop the price of sugar from skyrocketing to around Rs. 50 from Rs. 25 earlier this year. Right? Lets make the people pay through their nose for their gulab jaman and jalebi addictions. They’ll only thank the PPP later when they are saved those costly trips to the dentist. Come to think of it, maybe this should be the centerpiece of the government’s health policy. And its education policy. Kerching!

And just to show us how serious Mr. Gilani is, he has told his cook to cease and desist: no more sweet dishes on the Prime Minister’s table till further notice. In one fell stroke, Mr. Gilani has rid himself of inflated sugar bills and cavities. Genius!

But wait! There’s more. If we all follow Mr. Gilani’s shining example, sugar consumption will plummet and the greedy industrialists will have to bring their prices down. See? The Pakistani people will get something even sweeter than ras gullahs. Revenge!