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Price Controls Limiting Investment

This article is from Panama America, a Ricardo Martinelli owned media outlet, so the slant is critical of the current government's Price Control policies.

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The limitation of new investment and the development of new businesses are some of the consequences that the extension for a further six months of price control measures could bring to the Panamanian economy,

So have indicated some businessmen, who highlighted that the measure has created a distortion in the market, a situation where the Executive was already requested to eliminate.

Despite the rejection of some sectors of the economy, the extension of this measure - to control 22 products in the basic basket family (CBF)- was announced by the President of the Republic himself, Juan Carlos Varela, during a meeting held with the board of directors of the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP).

The President Varela that what they are reported analysing are the themes of the margins that were a little stiff, especially in those products that are a little similar.

The governor added that if there is a product that is in the basket, but the brand is imported with a higher cost, is the possibility of relaxing the step in this direction.

One of those who reacted to the announcement of the extension was the president of the CCIAP, Jorge Icaza, who insisted on the removal of the control of margin and a review of the measure of price control, taking into account factors such as inflation, which led to the opening of the same, fell by 0.6% to April, according to data from the Office of the Comptroller General.

The President of the Industrial Union of Panama (SIP), Ricardo Sotelo, is also delivered to the extension of the measure, and stressed that this type of measures limited levels of investment and develop new business on certain activities in the country.

He added that when producers and entrepreneurs understand that there is no incentive for an activity or is regulated and there is the claim that eventually the state does have some kind of inherent, they also limit on developing it.

Sotelo emphasized that the decision to extend this measure is overtly political and that the same what will continue to create will be greater distortion in the market.

He added that at the conceptual level as guild, have always been against the measure, the circumstances by which the President Varela took the decision to implement it, which was to lower the cost of the Basic Family Food Basket (CBFA), have changed radically and it makes no sense to continue with this measure.

Until April, the CBF has a cost in Panama and San Miguelito of $305.39, amount which reflects an increase of 1.27, in relation to the previous month, according to the last measurement made by the Ministry of Economy and Finance (MEF).

For its part, July The Lastra, president of the National Council of Private Enterprise (CONEP), pointed out that they are maintained with the same position that the extent of price control had a genesis, an effect and that already are actually saw their results.

The Lastra commented that, despite this extension, the same should be deleted, as it is right that the markets to flow under the concept of free supply and demand.

He added that the gains of the entrepreneurs who invest in Panama and pay their taxs are based on the profitability of their operations and to restrict them by means of a tariff imposition, enterprises cannot meet the great burden that this represents.

For its part, Olmedo Estrada, president of the College of Economists of Panama, noted that the extent of price control has not fulfilled the expectations of the population and it is not used in conjunction with the economy being in the country, which is market.

He stressed that this collides with the free market economy that is lived in the country, added that this extension which will bring will be greater "anxiety" and "concern" in the country, because it is already clear that the savings promised $58 is not giving.

Estrada emphasized that should be searched for other alternatives to offer the Panamanian population best products with many best prices.

For his part, Pedro Acosta, President of the National Union of Consumers of Panama (Uncurepa), emphasized that the prolongation of this measure which demonstrates is that free competition does not work.

0.6%  - Inflation in the country until the month of April, according to records the Comptroller General.

58  -  Dollars is the savings that is promised

http://www.panamaamerica.com.pa/economia/el-control-de-precio-limita-las-inversiones-1029126

Translated by freetranslation

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Panama and the (eternal?) Price Controls

For the fifth time the Varela administration has extended the measure regulating the maximum prices of retail of 22 products in the basic basket, until July this year.

Monday, January 9, 2017

From a statement issued by the Ministry of Economy, Trade and Industry:

The national government has extended, starting from January 7 2017, the temporary regulation of maximum prices for sales of 22 products in the basic food basket (CBA by its initials in Spanish) known as price controls, taking into consideration the positive results from the immediate reduction of CBA costs, giving Panamanians greater access to necessities. 

The measure was adopted by Executive Decree No.13 of January 6, 2017 published today in the official newspaper La Gaceta, extending for a period of six additional months the validity of Executive Decree No.165 of July 1, 2014.

http://www.centralamericadata.com/en/article/main/Panama_and_the_eternal_Price_Controls

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Another 6 month extension on price controls of basic food items.

The current list.   ListadoControlPrecios-panama_MEDFIL20170106_0016.pdf

"Chicken breasts with bone in (excluding special breasts)" are supposed to be price controlled at  $.90 per lb.  I guess the breasts around here all pretty special because even Canasta Basica doesn't sell them for that. $1.00 per lb. is close.

On the other hand, eggs are controlled at $1.87 per dozen but they sell for $1.40 at C.B.

Edited by Keith Woolford

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Price Controls Now Permanent in Panama

The measure, which initially was to last for only six months, was extended until December 2017, meaning that price controls on 22 products in the basic basket will have been in place for a total of three years.

Friday, July 7, 2017

Some of the 22 products whose prices have been regulated since July 2014 are eggs, chicken, potatoes, macaroni and pork chops, among others.
 
The Minister of Commerce and Industries, Augusto Arosemena, defended the extension of the measure, arguing that "... it curbed inflation in food products."The measure has not led to a shortage ... and on the contrary, it has increased consumption and production of food such as eggs and chicken." 
 

"... Despite arguments put forward by the authorities, the Chamber of Commerce, Industries and Agriculture in Panama submitted an application to the Supreme Court of Justice for an extension without technical justification supporting the intervention of the State in the free development of the national economy.

http://www.centralamericadata.com/en/article/main/Price_Controls_Now_Permanent_in_Panama

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What Price Control Really Generates

The price control policy of the basic basket that has been implemented in Panama for some years is discouraging the local production of goods, since it is not profitable for companies to produce at a price lower than the balance price.

Thursday, April 11, 2019

The measure to regulate the maximum retail prices of 22 products of the basic basket, began in 2014 and its validity has been renewed each semester, with its last extension in January of this year.

See "Price control: From Temporary to Permanent

Augusto Jiménez, producer of Tierras Altas, explained to Panamaamerica.com.pa that "... Price Control has served as a political proposal because in reality it has been a total failure. It has affected production, 'the only way to lower prices is to raise productivity. There is little supply, the price is controlled and traders are managed under a margin."

The article reviews that "... According to an IDB study, 'Price Control is a distortion because it does not allow free interaction between supply and demand to achieve balance in price and quantity.

For the Inter-American Development Bank (IDB), the policy of price regulation generates that at a price lower than the balance price, less quantity is produced, because it is not profitable for some producers to continue producing at that price.

Download IDB report "Inflation and income distribution in Panama".

 

https://www.centralamericadata.com/en/article/main/What_Price_Control_Really_Generates

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Panama: No More Price Control?

The brand-new Cortizo administration announced that it will gradually eliminate the price control system for 22 products of the basic basket, in force since July 2014.

Wednesday, July 3, 2019

The measure, which was initially announced as temporary, became permanent in the country, as it came into force on July 7, 2014, and during the Varela administration it was extended nine times, leaving negative balances to the discretion of some sectors.

The list of 22 products in the basic basket, whose prices are regulated, will be modified next July 7, according to President Laurentino Cortizo, who confirmed to the media.

See "Price control: From Temporary to Permanent

Regarding how the measure will be eliminated, Carlos Salcedo, Minister Counselor for Agricultural Affairs, explained to Elcapitalfinanciero.com that "... price control will be eliminated gradually, as President Laurentino Cortizo will be signing an Executive Decree on this issue soon."

Salcedo added that "... establishing price control in a free market economy is an outburst, but he added that it was something that was inherited, so it will be phased out."

Some of the 22 products whose prices have been regulated since July 2014 are eggs, chicken, potatoes, macaroni and pork chop, among others.

 

https://www.centralamericadata.com/en/article/main/Panama_No_More_Price_Control

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Eight products removed from price control

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THREE cuts of meat no longer subject to price control.

Posted 05/07/2019

Eight  products were  removed from the  list of  foods subject to price controls on  Friday, July 5 says  the Minister of Commerce and Industries (MICI), Ramón Martínez.

"We have identified products that are below the control price and the time is propitious to deregulating the measure because inflation is low and remains stable in food," said Martinez.

Among the delisted  are three cuts of meat: chop, breast, hock; eggs, macaroni, lentils, and beans.

There are 22 products, of the 59 that are in the basic family basket, whose prices have been regulated since 2014 at the beginning of the  Varela administration of Juan Carlos Varela, which had as a goal a saving of 58 dollars a month for consumers.

The new measure of the government of Laurentino Cortizo will take effect from Sunday, July 7.

Martínez said that other products which are regulated, will be gradually removed.

The statements of Minister Martinez were given during his attendance at the change of command in the Institutional Protection System. 

 

https://www.newsroompanama.com/business/eight-products-removed-from-price-control

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Price Control: Products Excluded from the List

From July 7, eggs, macaroni, beans, lentils, chop, shank, breast and tuna will no longer be part of the list of products whose prices are controlled in Panama.

Friday, July 5, 2019

The measure consisting of the regulation of 22 products of the basic basket, which was initially announced as transitory, became permanent in the country, since it began to apply on July 7, 2014, and during the Varela administration was extended nine times, leaving negative balances at the discretion of some sectors.

With the arrival of the new president, the number of products whose transaction values are regulated will be reduced from 22 to 14, since one of the first actions announced by the Cortizo administration was the gradual abolishment of the price control system.

See "Panama: No More Price Control?"

Ramón Martínez, Minister of Commerce and Industries (MICI), confirmed to Prensa.com the exclusion of eight products from the basic basket that are regulated by price control, arguing that they have "... identified products that are below the control price and the time is favorable to deregulate the measure because inflation is low and remains stable in food."

Therefore, the products that will still be controlled their prices are the babilla, ribbon steak, ground beef, whole chicken, rice, onion, yam, national potato, tomato perita, yucca, powdered milk, soft bread, processed yellow American cheese and sausage.

 

https://www.centralamericadata.com/en/article/main/Price_Control_Products_Excluded_from_the_List

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