Sri Lanka Coronavirus mask export ban lifted by drug price control agency
ECONOMYNEXT – Sri Lanka’s National Medical Regulatory Authority, a price control agency for drugs which has extensive powers to disrupt economic activity has lifted a ban on exports of masks, which has blocked the island’s apparel manufactures from moving to new businesses.
“The Medical Devices (Availability within Sri Lanka) Regulations, No. 2 of 2020 published in the Gazette Extraordinary No. 2167/17 of March 20, 2020 are hereby rescinded,” the NMRA said.
The agency on March 20 banned the export of masks, stopping domestic Sri Lanka firms from moving into to mask production.
The NMRA was set up by an ally of former Prime Minister Ranil Wickremesinghe based on a proposal by Senaka Bibile, a follower Karl Marx to control drug prices.
The agency also slapped price control on masks, creating shortages and making it difficult for existing domestic producers to source raw materials or importers to source goods as world prices and transport costs shot up.
Another price control agency, the Consumer Affairs Authority has slapped price controls on vegetables, shunting higher costs down the supply line and making farmers bear the total cost with low prices.
The CAA also slapped price controls on tinned fish and dhall, triggering a black market as first year economic students are taught, and making the products disappear off the shelves. The agency then set about charging ‘black marketers’ that itself created.
Sri Lanka’s health and military officials have been engaging in a world beating contact tracing strategy to stop Wave II Coronavirus infections from third countries after successfully stamping out Wave I infections from China.
However officials display an amazing lack of economic knowledge, which classical economists say is natural since all bureaucrats know is how wield state power with the threat of violence.
“It is further true that bureaucracy is imbued with an implacable hatred of private business and free enterprise,” wrote economist and philosopher Ludwig von Mises half a century ago and he could well have been writing of Sri Lanka NMRA and CAA in 2020.
“But the supporters of the system consider precisely this the most laudable feature of their attitude.
“Far from being ashamed of their anti-business policies, they are proud of them. They aim at full control of business by the government and see in every businessman who wants to evade this control a public enemy.”
Meanwhile at task force for food distribution and police has denied curfew permits for budding entrepreneurs and truck owners who were not previously buying and transporting vegetables from entering the business, further hitting farmers.
Truck owners have been stopped from entering vegetable trade at a time when General Motors is making ventilators in the US.
Sri Lanka’s central bank has printed money and has de-stabilized a soft-peg with the US dollar.
The price controls from Bibile’s agency could make it difficult to import drugs and sell at current prices if the rupee continues to fall, analysts say. (Colombo/Apr14/2020)