Tweet
PRICES ARE OUT OF CONTROL
Naira Hayrumyan
Story from Lragir.am News:
http://www.lragir.am/engsrc/economy24919.html
Published: 17:29:46 - 25/01/2012
After the head of the Compulsory Enforcement of Judicial Acts Mihran
Poghosyan had sold his Catherine Company, the Anti-Monopoly Committee
fined it 10 million drams. Last year the committee revealed that
the company bought nitrate fertilizers for 6200-6400 drams and sold
for 10 thousand drams. The committee announced that the price must
be reduced to a reasonable level, namely 7000 drams. However, the
company went on to sell it for 7600 drams.
In Armenia, the state instrument for regulation of prices is used very
seldom, and in most cases it is due to some minor political reasons.
However, in terms of economic effectiveness, this instrument must
be used every day. And first it is necessary to create a legislative
framework for this policy.
What is a reasonable price? What law regulates the percentage of
markup by the trader? Is there a law in Armenia which regulates the
pricing of a product? Is there a law that prevents importers from
setting prices freely or at least a law that would provide for a
progressive income tax?
There is no such a law otherwise the prices in Armenia would not
exceed the average prices in Europe. The Armenian government prefers
not to conduct a price policy because it will affect the interests
of major importers. For this purpose, the exchange rate is kept low
to enable importers to set prices freely.
In the meantime, a state which declares itself as social cannot reject
the instrument of regulation of prices. Moreover, the absence of these
tools is conditioned by the commitment to the free market rules. After
all, liberal does not mean uncontrolled.
In any liberal country prices are free within the framework established
by the government.
In Armenia, regulation happens in an amorphous, reasonable framework
and only in regard to those businessmen whom the government wants
to punish.
The absence of price instruments is evidence that the government does
not pursue the interests of the society and protects the inflated
importers.
Naira Hayrumyan
Story from Lragir.am News:
http://www.lragir.am/engsrc/economy24919.html
Published: 17:29:46 - 25/01/2012
After the head of the Compulsory Enforcement of Judicial Acts Mihran
Poghosyan had sold his Catherine Company, the Anti-Monopoly Committee
fined it 10 million drams. Last year the committee revealed that
the company bought nitrate fertilizers for 6200-6400 drams and sold
for 10 thousand drams. The committee announced that the price must
be reduced to a reasonable level, namely 7000 drams. However, the
company went on to sell it for 7600 drams.
In Armenia, the state instrument for regulation of prices is used very
seldom, and in most cases it is due to some minor political reasons.
However, in terms of economic effectiveness, this instrument must
be used every day. And first it is necessary to create a legislative
framework for this policy.
What is a reasonable price? What law regulates the percentage of
markup by the trader? Is there a law in Armenia which regulates the
pricing of a product? Is there a law that prevents importers from
setting prices freely or at least a law that would provide for a
progressive income tax?
There is no such a law otherwise the prices in Armenia would not
exceed the average prices in Europe. The Armenian government prefers
not to conduct a price policy because it will affect the interests
of major importers. For this purpose, the exchange rate is kept low
to enable importers to set prices freely.
In the meantime, a state which declares itself as social cannot reject
the instrument of regulation of prices. Moreover, the absence of these
tools is conditioned by the commitment to the free market rules. After
all, liberal does not mean uncontrolled.
In any liberal country prices are free within the framework established
by the government.
In Armenia, regulation happens in an amorphous, reasonable framework
and only in regard to those businessmen whom the government wants
to punish.
The absence of price instruments is evidence that the government does
not pursue the interests of the society and protects the inflated
importers.