Sunday, January 15, 2006

Monopoly and the GCC :: Mahmoud's Den

Mahmoud on a common government practice in Bahrain, and other GCC countries:
For tens of years businesses in Bahrain made their money not only because of their industriousness or creativity, there obviously was some measure of those to be sure, but also because of monopolistic practices that enriched them without them lifting a finger. The story was until recently that a business can sign an exclusive agreement with a supplier and based on that agreement, the business would register that agreement with the Ministry of Commerce which enforces it by not allowing anyone in Bahrain to import any goods from that supplier except via the local exclusive trader. That was enforced at the Customs where they would not allow anyone but the "agent" to clear the goods for entry into the country.
My emphasis.

Just to be clear: Without the hand of government, these petty monopolies could not exist. With the hand of government, they pervade the economy. The same goes for price fixing agreements - more often than not, government is not just turning a blind eye to these agreements, but fostering them.



Blogger sheikha cheryl said...

It sound oh-so-familiar. You must be describing the UAE.

8:05 AM  

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