… that there is some concern over the price controls being implemented by the government. It came from some minister or other and was published in the Observer. He didn’t have the same worries that I do though. I am worried about shortages in the near term, maybe not even making it through ramadan. The minister pointed out, quite correctly, that subsidies and price controls have long term consequences, and not good ones at that. His concern is a long term one. If the government insists on selling wheat at a loss, there won’t be much interest from companies to import or sell it. It could be the worst of all worlds, the government could run out of wheat and there may not be anyone else importing it… The good news is that in a recent poll, over half the people that responded didn’t think that the government could maintain the price throughout ramadan. It’s good to know that most people realize that no matter what the government does, the market will rule… With any luck the price controls are only short term things, short enough to avoid shortages and short enough that companies will not leave the market. We’ll see if the Yemeni government can avoid really screwing this up…
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