Dubai World Conference for Consumer Rights..Government can control prices

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DubaiThe UAE government needs to use bulk purchasing power to break corporate monopolies and ensure consumers are not held to ransom, according to a world expert speaking at the inaugral Dubai World Conference for Consumer Rights. The conference, held under the patronage of Shaikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, was opened by Dubai Culture and Arts Authority Chairman Shaikh Majid bin Mohammed bin Rashid Al Maktoum at the Dubai World Trade Centre on Monday.

Keynote speaker five-time American presidential candidate and global expert on consumer rights Ralph Nader spoke about the role of governments in controlling the price of commodities. One way to do this was government procurement. Nader told Khaleej Times that the UAE government needed to direct its purchasing in ways that would break up the monopoly of companies in areas like technology or fraudulent materials, “because that part of it is a command economy”. He also reiterated the need for more transparency and freedom of information in the UAE, to enable consumers to make informed decisions and not allow corporations or cartels to fix prices.

In 2010, the United States Government bought $528 billion worth of commodities and services — everything from cars, pharmaceuticals and food to clothing, energy and appliances. “They could condition their purchases and say we want certain kinds of recycled paper, or safe cars for our employees.” These kind of ‘values’ were quite different to those of the 1960s when it was impossible to even get a mandate for seatbelts, he said. Nader said government, one of the biggest consumers in the country, could stimulate technological advances, enhance competition and develop standards through its purchasing power. For example, the US army was the one to develop standards for clothing many years ago, as well as give generic pharmaceuticals credibility — contradicting the drug company mantra that only patented drugs were safe. “There could be a whole conference here in Dubai on government purchasing to stimulate innovation, competitive pricing, and general well-being of all people.” However, government faced strong opposition from corporates which lobbied against “sensible government procurement” just as much as they lobbied against health and safety standards, he said. Prices in a civilised society should reflect its social, cultural, health and environmental values — and the wellbeing of consumers, workers and future generations had to be the final “yardstick” used to measure progress, he said. Some government interventions were necessary so as not to end up in a situation like the US health system — “a pay or die system” — where 800 Americans died each week because they could not afford health insurance, diagnosis or treatment.

“Price leads to death, injury and disease…this is not just something for economists.” Over three-quarters of anti-cancer drugs were discovered by tax payer-funded research and given free to the drug companies with no request for royalties or price constraints, but those companies in turn made millions of dollars annually from such drugs — often pricing them out of the range of seriously ill patients, he said.

However, without strong standards and policies, price controls also came with the risk of companies finding other ways to get around the regulations, such as cutting safety corners or comprising quality. And failing that, there would always be the black market — one of the more “creative patterns of corporate behaviour”. “Everything is connected to everything else … it all depends on the country’s larger system… does it have meaningful anti-monopoly law … labour and health and safety law…do consumers have a legal standing to fight, does the government encourage the free flow of information and transparency? Does it protect ethical whistleblowers? Does the government collect and advertise information about customer complaints? This is very important and can be easily done with computers today. We should be able to see what kind of trends are being reflected by complaints registered with a government agency.”

Department of Economic Development Director-General Sami Al Qamzi made the inaugral opening address, reiterating how important the conference was to uphold consumer rights and ensure practices like counterfeiting and commercial fraud were stopped. Nader also said later that along with renewable or sustainable sources of energy, food was another market to watch in the UAE, he said. “There has to be better labelling of food, because obesity is a huge problem in the United States. Child obesity is rising and I understand it is here in the UAE too…leading to things like high blood pressure, diabetes.”
The conference continues until April 3.

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