Who's hoarding what?

In big cities, the police and military have been breaking open warehouses stacked high with basic foodstuffs. In many small towns, people have been ransacking shops and looting their contents. In East Java, rice processors have been attacked by people angered at seeing piles of rice in their barns. In Jakarta, shoppers have been robbed and attacked as they loaded goods into their cars.

The nation is in a frenzy. Anyone suspected of hoarding increasingly scarce and costly basic foodstuffs is in danger of being attacked. As the economic crisis bites deeper, so the list of goods disappearing from supermarket shelves grows. First it was rice. Now, just as the government appears to have stabilized rice prices by flooding the country with imported rice, other commodities have become scarce. Cooking oil, sugar, flour, instant noodles, soybean, even lube oil and car spare parts are now difficult to find and costly to purchase.

Volatility in the rupiah's exchange rate makes it difficult for traders to price their goods. The government has repeatedly appealed to them to freeze prizes during and after Ramadhan. Exports of cooking oil have been banned by the government to ensure an adequate supply at home. Faced with rising costs, some manufacturers, distributors and retailers have decided to withhold their goods from the market, rather than sell at a loss. Resulting shortages and growing political and economic uncertainty has led to bouts of panic buying. Panic usually engenders even greater apprehension.

There is no doubt that some people are hoarding in the hope of forcing prices up and reaping large personal profits. These are the speculators. But people withhold stocks for other reasons: manufacturers and distributors do so to wait for prices to stabilize; retailers and shopkeepers to ensure a stable supply in the face of uncertainties; ordinary people to make provision for expected price rises, or because they are simply swept along by the tide of panic buying. Whatever the motives, this type of behavior exacerbates the shortages and it is not surprising that many people are rankled by the sight of people participating in this destructive game.

Accusations of hoarding have been leveled indiscriminately. Sadly, many innocent people have fallen victim to this witch hunt. Rice processors in East Java are now afraid to accept orders from farmers lest they stand accused of hoarding. Some traders have simply closed up shop rather than run the risk of attack. Some of the warehouses broken into by the authorities contained stockpiles of goods simply because that is the purpose for which they were constructed -- to store goods awaiting distribution. In many cases, the accused were not given adequate chance to defend themselves. No one has yet been brought to court for hoarding, let alone convicted. However, in most cases where accusations have been leveled, severe damage has been inflicted on the property of the alleged perpetrators. Traders have had their shops burned and their stock looted or confiscated.

The divisive nature of the economic crisis is rearing its ugly head amid bitter accusations of hoarding. Amid this frenzy, people have little regard for the law. Even the authorities are not exempt. Seizing goods from warehouses and selling them at discounted prices is a populist move that would have made Robin Hood proud, but it sends a signal to the people that robbing is acceptable. This is wrong.

The authorities believe they have various laws and regulations at their disposal to deal with hoarding. There is the 1955 law on economic crime, the 1965 law on warehouses, the 1959 law on economic stability and the 1998 decree by the Minister for Trade and Industry banning anyone from stockpiling goods beyond "normal" levels. If that isn't enough, they also can wheel out the all-encompassing Subversion Law, which may be used against anyone accused of undermining national stability.

The government should be firm with hoarders for they are further undermining our already plagued economy. But the police and military should also exercise wisdom in their operations. Indiscriminate accusations of hoarding and the threat of attack is instilling fear among decent traders that could discourage them from continuing their business altogether. If this happened en masse it would break the country's food distribution chain. The end result would only be even greater food deprivation for the people.