Sectoral Liberalization…Price jack up
Any activity of a service nature related to the people's daily needs or constant food needs, which the private sector provides, can take one of two tracks. First, that activity should be a field for good and sustainable investment that achieves its goal, and meanwhile, a fertile environment for career resettlement due to its attractiveness and stability. Second, it should be a means of monopolization and exclusivity in the production of the commodity and the provision of service. This is reflected on the quality of service which reduces due to the absence of competition and control of prices at the same time.
In order not to get to the second case, the first case must be adopted in any of these sectors. However, this trend has conditions, most notably and important; liberalization of the sector from the government administration and its support, then setting the framework for investing in it, and then preparing the ground for investment internally by establishing national companies, and externally by polarizing prestigious companies which establish long experience in this field. The clear example here is the telecommunications sector, which has turned from a weak and fragile government apparatus to a dynamic sector with continuous mobility and competition, and achieves the most important, which is quality and resettlement.
On the other hand, other sectors still need that (economic) area of competition and opening the door to the private sector, such as electricity and water. Despite the allocation, competitiveness is completely absent as a result of the sectoral non-liberalization even several months ago - after the liberalization of fuel and electricity prices - The climate will be suitable here for investment by other companies, due to the sectoral liberalization and the government's non-intervention with support, thus providing the equality of all investors. That trend has become clearer in the air transport sector so we have five Saudi companies fully compete for service and value, and we look forward to competitiveness that creates better quality and lower cost by having companies competing the electricity and water company.
There is an important area for citizens and residents, despite the level of competitiveness and multiplicity of investors in it, but it can be an area of specific monopoly by controlling the price of the commodity, as is the case in the dairy sector. This scene has become unacceptable and repeated in a major company's control of prices, sometimes by raising them, especially in the summer, and other times by reducing them. It is true that prices are not highly jacked up, but the psychological factor is important for the consumer, especially the permanent client of that company, and who will abandon his loyalty when he realizes that he is exploited despite his loyalty, and will therefore turn to another company or product.
It is important to note the significant role played by the General Authority for Competition, which stands in the way of any exploitation leading to an agreement between producers or traders, as it went with the soft drinks and rice. We believe that the General Authority for Competition has already become a safety valve for protecting the consumer, and addressing monopoly or manipulation, especially after the liberalization of any sector and put it to competition for investors.