prices going high

A new year came with high hopes and blessings from loved ones and peole around us. However the signs so far are showing an ill omen. The past year also was an unhappy year for msot middle class and lower class citizens in terms of finance. Fuel prices were fluctuating and remained higher than avaerage throughout the year, while rents and prices of bare necessities went on increasing alarmingly.

The head lines on the second day of new year was marked by the record high fuel prices. It would again cause an increase in prices of many goods and services as most are dependent on fuel. The taxi fares which were increased last year by transport authority may escalate this year as a result of increase in fuel prices. Increase in price of any goods or services agitates the land owners of Male' and they think that its a sign that people are getting more money and hence they start to increase the rent.

Its not rocket science to understand why prices are going high, but I always relate economics to the very basics. In basic economics it says wants are unlimited and reosurces are limited and this leads to demand and supply. Rents are going high because the demand is more than the supply. Rents are the main factor for increase in prices of many other goods. So how can we increase the supply. Well the central authority or the government can do this by building flats and housing units enough to reduce demand. In many cases the flats build are not to ease the demand but to resolve public outcry over the government's negligence. This escalates the problem as corruption becomes the foul play in distributing such flats or lands. So if the government builds enough housing units within a short period of time the supply will be enough to ease the demand and hence to reduce prices.

Also land owners need to think in a rational manner to avoid the abuse of unfortunate people who dont have lands in Male'.