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There is danger when government meddles in a free market economy. Too little government control and it has no effect; too much, and it can create shortages in the market. A recent example of the latter is Zimbabwe where President Mugabe dictated that certain basic foodstuffs should not be sold above a government stated price. As that price was below that for which retailers bought them, the items soon disappeared from the shelves and were not replaced. Such severe measures will never occur in the UAE. The government would be more understanding and retailers will seek alternative cheaper sources, even if of lower quality.
However, the question is whether it is right for the government to dictate prices. If it is considered acceptable, then why stop at rice, chicken, eggs and water? The weekly shopping basket has many other products for which price controls could be imposed. And why just food? Why not rented property? The prospects of price controls on everything can be limitless if so desired. And surely it will keep inflation down. But then the UAE would be practicing a different economy.
If the authorities desire realistic prices then there should be a level playing field for all and it should put an end to all subsidies in all areas. Supply and demand will then dictate market forces. That will ease the burden the government has in dictating prices.
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