Ann-Marie N. Grant, Contributor
ECONOMIC DEVELOPMENT refers fundamentally to the sustainable growth of a country's productive capacity, continued improvements to the standards of living, increased per capita income, poverty alleviation and the reduction in unemployment.
Through competitive markets, the economy is able to provide lower priced, higher quality products in greater quantity and variety than would obtain in the absence of competition.
The benefits of competition therefore include higher consumer welfare and improved productive efficiency of firms. It is not difficult to conceive that economies which are organised with competitive markets enjoy greater levels of economic development.
The relationship between a competitive economy and economic development is far stronger than a mere association. A competitive economy is necessary for economic development; there is a direct causal link between fostering competition in an economy and successfully attaining economic development.
COMPETITION LEGISLATION
The main questions for policy makers would therefore be: what are the most appropriate policies/ strategies for the Government to pursue in order to realise the benefits of competition and economic development? What should inform the government's competition policy?
Competition legislation is one aspect of a Government's competition policy. Competition legislation is limited to the governance of trade practices among firms which operate in the domestic market (domestic trade) whereas the broader competition policy would include relationships between domestic firms and those which operate in foreign markets (international trade).
The Fair Competition Act (FCA) of 1993 is Jamaica's competition legislation. The FCA is enforced by the Fair Trading Commission (FTC) which is mandated to maintain and encourage competition in the conduct of trade, business and in the supply of services in Jamaica with a view to providing consumers with competitive prices and product choices.
To achieve its mandate, the FTC enforces provisions which prohibit two broad categories of offences. These are offences directly related to consumer protection and offences dealing with anti-competitive practices among firms.
CONSUMER PROTECTION PROVISIONS
The main consumer protection provisions include misleading advertising, double-ticketing and sale above advertised price while the main anti-competitive prohibitions relate to agreements which substantially lessen competition and abuses by a firm in a dominant position; the abuse must have actually or may potentially lessen competition substantially.
Other anti-competitive prohibitions are cartel activities such as conspiracy; bid-rigging/collusive tendering; price fixing and market allocation. The current structure of the FCA does not contain merger control provisions.
An important role of the FTC is competition advocacy, which is the promotion of a competitive economic environment by non-enforcement mechanisms, mainly through relationships with other governmental entities and by increasing public awareness of the benefits of competition. Competition advocacy is very important for the development of a competition culture in Jamaica.
The annual Shirley Playfair Lecture Series is a vehicle used by the FTC in its competition advocacy. On September 8, 2005 the Shirley Playfair forum took the form of two panel discussions: (a) Competition - a tool for national development and (b) Water and Energy Policies - implications for development.
This forum had presentations by international and local experts. Excerpts will be aired on TVJ on Sunday, January 8 and 15, 2006 at noon.
Ann-Marie N. Grant is a competition analyst with the Fair Trading Commission. She can be contacted at ftc@cwjamaica.com.
