THE government is looking at monopolies in four key sectors as part of efforts to tackle the rising cost of living, said Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail.

These monopolies – in rice imports, medicines, licence renewal and vehicle inspection – are the first of four sectors that the special cabinet committee on monopolies have studied.

The committee will also present its recommendations to the cabinet whether these monopolies should be broken up, adjusted or maintained due to the function they provide, said Saifuddin. 

Saifuddin said not all monopolies in the economy were bad.

“We cannot also abruptly end monopolies because the companies that were set up to run them have invested a lot in their operations.

“They also exist because of a certain policy to fill a certain need.

“They are a monopoly because they are the dominant company supplying those services. They only become negative when there is collusion to set prices and oppress competition.”

The monopolies that have been studied are Bernas (rice imports), Pharmaniaga (generic medical drugs and supplies manufacturing), MyEG (government licences renewal) and Puspakom (vehicle inspections).

He said the cabinet committee needs to carefully look at each monopoly and how they function in the national economy to determine whether to end them. 

“We are concerned about the quality and efficiency of the services.

“We do not want to abolish a monopoly and suddenly find that we are unable to cope without the company that had been running the monopoly,” Saifuddin told reporters after a dialogue with MIDF in Kuala Lumpur today.

“This is why as part of its study, the special committee held extensive discussions with ministries that dealt with these monopolies on whether they, their agencies or other businesses can replace these dominant companies.

“For instance, Transport and Home Ministry agencies, such as Immigration and the vehicle registration departments, were asked whether they could take over the services of MyEG, which handles foreign worker applications and road tax renewals.

“At the end of the day, we don’t want to compromise on quality of service.”

Consumer groups and academics have proposed ending monopolies especially in food and household goods imports, as a way of bringing down prices, arguing that the concentration of such activities in a handful of companies have allowed them to set prices.

The review and break-up of monopolies had also been promised by Pakatan Harapan in its election manifesto.The cabinet committee on monopolies, Saifuddin said was formed last year and is chaired by Economic Affairs Minister Azmin Ali.

Each minister has been told to look at monopolies under their purview and submit these for further study to the special committee.

Azmin’s ministry has been tasked with collecting the recommendations after they had been studied by the special committee.

These proposals will then be presented to the cabinet.

“The question right now is whether to submit the recommendations for these four first or to completely study all the monopolies and submit all the recommendations at one go.” – April 3, 2019.