To wax lyrical, the sun has set on the spirit of free market enterprise but its moniker is brighter than ever. The EPRDFites have, to the last man, praised the virtue of their policy of “free market enterprise,” price caps, controls, and all.

They have gone the distance in condering how best to continue to impose price controls. What measures should be taken? Who is best positioned to implement these measures?

The fairness, balance, and effectiveness in designing the measures are yet to be counted among the policymakers’ strong suits. Their cherished hope for the economy’s compliance remains unanswered as the market refuses to fall in line. Supply retreats as demand grasps thin air.

Policymakers seem not to realise that they would have done better trying to woo the market into submission rather than bludgeon it over the head and drag it kicking and screaming to a dark cave.

Yet, a dark cave is exactly what they have dragged the market into. Using unoriginal and unimaginative methods, they have attempted to dominate with a Dergesque formula. It did not work then; it is not working now.

In the midst of all the clubbing and dragging, policymakers have overlooked one major detail. The existence of the Trade Practice and Consumers Protection Authority, as per Article 31 of Proclamation 685/2010. The proclamation goes on at length and in detail about the powers of execution and adjudication that have been bestowed on this authority, but to no avail.

The proclamation was printed in August 2010, and ratified by Parliament the month before, in June; yet, for all the words in print, there exists in actuality no such authority.

The proclamation does not call for a novel entity. It is based on the earlier Trade Practice Proclamation, which was ratified and then printed in April 2003, before being referred to the PM’s office in May 2010.

Unlike its successor, the 2003 proclamation resulted in a commission of inquiry chaired by Neway Gebreab, economic adviser to the PM. This body served as the examiner, judge, and jury of complaints submitted to it by an aggrieved party.

In spite of all the capabilities of this ambitious commission, it was scrapped due to a “lack of provisions needed to provide legal solutions for trade practice problems,” according to the corporate communications officer at what was then the Ministry of Trade and Industry (MoTI).

Apparently, the ministry wanted a bigger stick. A strongly worded amendment was hoped to discourage traders from manipulating the system. The result is that policymakers, in their zeal to provide a free market economic policy with the ensuing appropriate practices, have written the words for their ideal unit “to protect the business community from anti-competitive and unfair market practices.” The judicial powers and duties of the as yet unborn authority read much the same.

This new and improved authority was to have been the implementing arm of the Ministry of Trade (MoT) to micromanage the market. It is this ministry that has been charged with setting up and structuring the authority. While the director general is to be chosen by the Prime Minister, the nomination is to come from MoT, and rumour has it that the list of nominees is to comprise those who have served the ministry well in the past.

However, it is paradoxical that the very same ministry to set up this authority would be the one to decide that small vendors should put up with the raw hand they have been dealt, as the nature of business is sometimes taking a loss. Just as ironic is the PM’s threat to have state enterprises import supplies in abundance, seemingly to reduce prices and relieve consumers, but in effect putting importers out of business.

The reality remains that consumers have nowhere to turn to air their grievances against the suppliers of products or services.

If a customer has a meal in a restaurant and gets food poisoning, something that happens more often than it should, where can he go? Should a customer walk into a clothing store and be tricked into purchasing an expensive brand only to find out that the tags had been fiddled with, to whom does she turn for justice?

This authority was to have come to the rescue. Had it become corporeal instead of remaining only black ink on white paper, it would have had the power not only to regulate businesses but also to protect consumers. It would have been MoT’s fire brigade wherever there was smoke.
 
This authority was conceived for the protection of the consumer, as its name conveys. It would have been the enforcer of quality. Once born, it was to bring to justice the matters that cause conflict between suppliers and consumers.

Among the many duties described in the proclamation is that of ensuring market transparency, raising public awareness on certain issues that may arise, and curtailing unfair trade interests.
This is to include influence over mergers to ensure that one corporation or conglomerate does not corner the market.

There may be no need to go as far as price fixing if this law takes form and becomes an enforcement unit.

Specially equipped for investigation, the authority could idyllically conduct a survey of products and services and come up with a standard. Had this authority been in force before the eve of Genna 2010, the ministry might not have embarrassed itself so by imposing slapdash price caps. They might have known better than decreeing edible oil, without specifying which kind, to be sold at 16.50 Br per litre.

The initiated price caps might not have been so painful had the ethereal Trade Practice and Consumers Protection Authority proposed prices for products and services as well as an avenue along which to proceed after research. It would certainly not have fared worse.
It would serve as the filler for the gap in trade, giving advice to big and small businesses that may be unaware of their practices being in conflict with the consumers’ interests, before moving on to the ugliness of enforcement.

What is questionable is the manner in which this authority is tailored. To have one entity serve as investigator, prosecutor, judge, jury, and executioner is frightening.

Where has the legitimacy of checks and balances that come with democracy gone?

A guiding principle for this proclamation is that a business person with a “dominant position in the market” may not abuse it. Policymakers’ intentions are to protect the underdog in the area of trade. Unfortunately, for all concerned, “The road to hell is paved with good intentions.”

Using the public’s need for a champion, to create a Goliath of an entity with so much latitude in its dealings, can only lead to more grief. The public needs someone they can turn to when products and services lack quality; not an authority which has the right to kick down doors, flash an ID card, and rifle through drawers.

The very totalitarian approach to this kind of “justice,” should have died long ago with the Fascist movement. It seems as though the EPRDFites see its merit where most other governments have given up.

The state refuses to loosen its grip on the throat of the economy, but the tighter it clings, the weaker the market becomes. Interference in the minute dealings of the economy from the macroeconomic status has been proven time and again to be unhealthy for the market.