Fiji Fights

Inflation

from a Suva correspondent Fiji’s commercial community is currently running a wary eye over the government’s newest proposals to fight inflation.

The Suva Chamber of Commerce has appointed a special subcommittee to make a study of the proposals which have passed the House of Representatives and now go before the Senate.

Among the points which will come under particular scrutiny is a new formula for controlling prices. Some items deemed “essential” will have the actual price fixed at a particular level, instead of fixing the percentage of profit. During the price freeze (due to end June 29), the govern ment’s first phase in the anti-inflation battle, mark-up margins on imported goods were controlled. But this did not prevent prices rising.

If the overseas costs went up, or shipping costs rose, the actual price in Fiji increased correspondingly, although not the shopkeepers’ profit.

For people whose incomes were frozen solid, the fact that shop keepers did not actually make more money meant little. What they saw were rising prices, while their capacity to buy remained static.

There was plenty of bewilderment and heart-burning among wage earners and shoppers, as the volume of puzzled complaints and queries to the Fiji Consumer Council can testify.

In the June parliamentary session, the Minister for Commerce and Industries, Mr Mohammed Khan, admitted the freeze had not been

100 per cent successful. However, he claimed it had some effect, as shown by a drop of 1.3 in the con sumer prices index. Much of this drop can be attributed to lower prices for Fiji produce because of seasonal influxes and price controls.

Imported groceries, clothing and household effects all rose consider ably.

The freeze was designed as a breathing space to give government a chance to work out phase two of the anti-inflation campaign.

The Minister described restrictions planned for this next phase as “fairly severe”. Apart from price controls, all pay rises in the country will be limited to a maximum of eight per cent or $5OO a year. Workers will not be able to apply for rises until a year after their previous increase. And unions will be allowed to decide the distribution of a per centage increase among the workers.

Phase two also sees the introduc tion of a National Economic Council to advise a controlling economic body, the Prices and Incomes Board.

These two bodies will have wide ranging powers over Fiji’s economy.