SLFP led coalitions with Marxist parties have by tradition opted for interventionist policies rather than laissez- faire economic policies as the UNP. They believed in acquisition of ownership, production and distribution. Nationalisation, imposition of bans by legislation and control of prices by government regulations were their policies which they swore by, till the Communist states collapsed and market economics came to be even by the former Communist empires.

In Sri Lanka, nationalisation and state intervention, even in our private lives - limitation of the number of guests at a wedding— proved to be disasters and led to the ignominious defeat of the Socialist government of the United Front. When the SLFP led People’s Alliance with Marxist parties returned in 1996 after 18 years, they did not change from market economic policies that prevailed. But there appears to be nostalgia lingering for state intervention and now with the economic scenario increasingly resembling that of the 1970s, the socialist itch of state intervention is evident. The call by the JVP to de- privatise the CWC is one such instance, even though it has been held up due to the government lacking funds to buy back the sold shares, is one instance.

With the cost of living sky rocketing and the government impotent to control it, the first step of price control has been announced. The government controlled Daily News, on Friday, announced that the price of bread is to be controlled soon on the orders of the Minister of Trade and Consumer Affairs, Mr Jeyaraj Fernandopulle. The stormy petrel of the SLFP, has announced that he proposed to maintain the price of bread at Rs 13 for a 450g loaf of bread. Macho moves such as this- ‘hitting the bakery ‘mudalalies’ who exploit the poor masses’—- is popular with the radicals amongst us, but quite often has proved to be disastrous to political parties in power.

The price control of bread in the seventies was one of those interventionist moves that caused the defeat of the United Front government. Price controlled bread issued on ration cards hit not only the rich but also the poor as well in their breadbasket. The poor quality of bread sold under extremely unhygienic conditions, quite often, by authorised political stooges of the government, the long bread queues and shortages are the nightmares of those who were unfortunate to be in this country at that time. Price control of essential commodities have often proved to be disastrous resulting in shortages, hoarding, adulteration and profiteering, quite contrary to the objective of providing such commodities at the cheapest possible price.

Mr. Fernandopulle is expected to hold discussions with bakery owners on this matter and reaching a satisfactory solution. It will be in the interests of all concerned.

The basic issue concerned would be whether the cost inputs in making a loaf of bread to specified weight and standards along with a reasonable profit to bakers, would equal the controlled price. If the cost of producing bread with the profit considered exceed the controlled price, then Mr. Fernandopulle will be hitting one and all below the belt right on the breadbasket. Bakers obviously won’t continue in business by making losses. Some may want to fold up and others will adopt ruses such as producing half baked soggy bread which will measure up to the specified weight but be unpalatable. Sri Lankans have gone through all this thirty years ago and would certainly not like a repeat performance.

We can well understand the plight of the government—fighting a desperate battle to control the rising cost of living caused by rising prices of commodities in international markets. But price control is not the answer, unless of course, unconscionable profits are being made. If curbing inflation through price control is possible; this world would be a happier place to live in.

Mr. Fernandopulle is quoted as saying that he has had discussions with Indian companies to purchase wheat at concessionary prices. That indeed is a way out. But will Indian companies provide us wheat below international market prices for the sheer love of Sri Lankans? While we hope they do, that unfortunately is not the way in the world of business. Earlier when the price of oil shot up a pundit suggested that we should make use of Mr. Jayantha Dhanapala to persuade Arab oil producers to sell oil at cheaper prices. Mr. Dhanapala, the able and distinguished diplomat he has been, unfortunately will not be able to perform the miracle of persuading Arab nations to sell us oil at prices below par.