Government Action and Possible Solution

Topics: Supply and demand, Microeconomics, Price Pages: 2 (403 words) Published: April 18, 2013
Government Action and Possible Solutions

Based on what we have learnt from economics, here are our suggestions to resolve the issues previously stated. Firstly, the government should set effective price control on building materials. Price control should be reviewed; considering free market to determine building material prices and supply in the domestic market. Associations should also urge The Ministry of Domestic Trade and Consumer Affairs (MDTCA) to monitor, regulate, and strengthen the supply situation in compliance with the Control of Supplies Act 1961 and enforce a transparent schedule of steel and cement production to prevent manipulation of rolling schedules that create artificial shortages. Second, government should control or stop the exporting of building materials to the world market. In the cases of building materials prices where price are low in the local market, this have resulted in local millers averting supply to export markets, creating an artificial shortage locally. Government should reduce the quota of exporting building materials to overseas to ensure local market have enough amount of supply. Third, government should remove import controls. Building materials from overseas can have more supply in the Malaysia market to solve the shortage problem. Removing of import controls are to be used until the shortages and pricing stabilizes so that more competitively priced materials can be sourced. This can also solve shortages in the market. Fourth, government also should control the price fluctuation clauses in the market. Government should make an adjustment for price fluctuation clause to be adopted for conventional building contracts and other projects undertaken by Semi Government Bodies and Agencies. This can ensure the stability of the building materials price and set the price in the justice price. Furthermore, price monitoring should also be practice by the members of the association to ease the unnecessary financial burden for the...
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