It is almost three centuries since seminal Scottish economist Adam Smith introduced his concept of an "invisible hand". In Smith’s view, this metaphor described how individuals pursuing their own self-interest unintentionally led to balanced, competitive and functioning markets. That is the principle that drives much of the world's modern economy.
Sometimes, however, markets need more visible forms of guidance – particularly in wartime. Even Smith was not opposed to limiting the hunt for profit, legislating against unfair monopolies and – crucially – regulating markets when it came to essentials, such as food.
In today’s Middle East, caught in the complexities of armed conflict and accompanying economic disruption, maintaining stable food prices is more important than ever. For countries such as the UAE, which imports most of its food, preventing opportunistic price gouging is vital as part of greater food security.
In line with the UAE's efforts to ensure all aspects of society navigate this period with resilience and strength, the government has taken action to make sure citizens and residents are not being unfairly hit in the wallet when purchasing essentials. Last month, The National reported that the authorities had issued more than 200 fines to traders and shops for raising prices after a global supply chain disruption and rising costs of fuel caused by Iranian attacks. This has been the result of the Ministry of Economy and Tourism carrying out thousands of inspection tours and issuing hundreds of warnings for unfair price rises.
Such steps have helped to mitigate the worst economic effects of the conflict. However, there has been no let-up in vigilance. On Sunday, state news agency Wam reported that a cartel had been referred to the Federal Public Prosecution for price manipulation in the poultry market. Measures such as these are not only about percentage increases – they are about supporting consumer confidence that prices, although experiencing inflationary pressure, are fair.
As part of maintaining that sense of confidence, the UAE has launched a digital platform that allows consumers to compare the prices of key goods such as water, bread, rice, cooking oils, eggs and dairy products. The Main Commodities Prices Platform tracks live prices for 33 items across 12 of the country’s leading outlets, supporting transparency and empowering the public to find the best deals on essential items.
It is important to see that government ministers, enforcement officials and leading retailers have been quick off the mark not only when it comes to keeping supplies flowing and shelves stocked but in maintaining fair prices too. This sense of urgency is justified because disruption in the Strait of Hormuz and uncertainty over energy and fertiliser supplies will affect markets for months to come. Such policies do not resemble Smith’s “invisible hand” so much as they do a helping hand for consumers and businesses.
