Who's hoarding what?

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.