Competitive markets not only exist in small economies, but they offer myriad benefits to consumers, including those in Barbados.
So says UK Professor Richard Whish.?? He was the featured speaker at the Fair Trading Commission’s (FTC) ninth annual lecture which was held last Friday at the Accra Beach Resort.
Prof. Whish observed that in Barbados, consumers not only benefitted from the consumer protection, fair competition and utility regulation powers of the FTC, but also from opportunities for competition.
"In telecommunications [there is] Digicel, Cable and Wireless [LIME], [and] FLOW. ??Prices are coming down [and] new products are coming on stream all the time.?? It seems to be a perfect example of consumers benefitting from competition," he observed.
Prof. Whish noted that in general, despite these positive observations, because of the structure of such economies, natural monopolies and duopolies often persisted, unless some external force was introduced. He added, however, that all economies profited from some level of competition, whether directly or indirectly.
"…Very few people seem to comment on the fact that consumers in small economies do derive benefits from competition that takes place elsewhere…[for example], the design and development of smart phones did not take place in Barbados, it did not take place in St. Vincent…but you, here, and I in the UK derive benefits from the competition that takes place elsewhere," he said.
Examining the unfortunate effect of non-competitive practices, the featured speaker highlighted the work of cartels, which, he said, "have a particularly pernicious effect on poor people.?? And, as you look around the world you do find cartels in bread, flour and basic fuels…Poor people have to pay a disproportionately large per cent of their income on these simple things," he explained.
Offering examples of such practices, ranging from a text book monopoly in Mauritius to price fixing of salaries for immigrant domestic workers by employment agencies in Singapore, Prof. Whish stressed that both goods and services could be subject to unfair practices, adding that the implications should not be underestimated.
"One thing that occurs to me when I come to the Caribbean… [is that] you can have an importer who may be in a monopoly or near monopoly position, [with] not very much competition downstream at the wholesale or retail level…If you put them and place vertical agreements between a powerful upstream importer and a powerful downstream wholesaler, it seems to me it must be very difficult in those circumstances for third parties to gain access to the local market," he stressed.
Although these challenges existed, Prof. Whish explained that technology was changing the game where competitiveness in small economies was concerned, adding that he was often "struck by how the revolution in telecommunications has helped local people in all economies, [especially] small and extremely poor economies. He noted that [in India] there is the most abject poverty and yet there is incredible penetration of mobile telephony and there are people who are able to get access to health services, for example, who would never have been able to, even 10 years ago."