Opinion: Competition Authority

POSTED: 11/7/12 12:48 PM

Our esteemed parliament seems to be a slow starter, while cynics might turn this qualification even into no-starter. Where are the initiative-laws? Where are the results of two years of parliamentary work? We just learned from MP Johan Leonard that legislation to ban single use plastic bags is about to be submitted to parliament. We’re happy with that and we’ll write that down as a positive.

But there are many other issues that seem to have stranded on the boulevard of broken dreams. Remember the excitement about the so-called short term labor contracts? Never mind that the law only knows temporary and permanent contracts. But the short term contracts, especially the 3-months contracts, they had to go. But after all the noise, there is now only silence.

The same thing seems to have happened with the motion to regulate pawn shops. That was necessary, parliamentarians said, to put a stop to all that chain-snatching. But everybody seems to have moved on to the next hot item – like Minister Duncan’s Justice Park.

Ever heard anything again about legislation for the timeshare industry? We neither.

What we do hear a lot about is the cost of living, the high fuel prices, the high electricity prices and the murderous prices in the supermarkets. Ever heard anybody make a decent proposal to do something about this? We certainly did not.

But hey, it’s never too late to take action. Here is an interesting idea that is taking shape in Aruba, the Caribbean country that seems to be doing relatively well as the front runner in the development of renewable energy for instance. Now its minister of Economic Affairs has announced that the country is almost ready with its concept of a Competition Authority.  Minister Michelle Winklaar has announced that the country will also establish an authority that will have to control whether companies abide by the new legislation.

The establishment of the Competition Authority is the result of a discussion about competition legislation that has been going on for years. In St. Maarten this discussion has not even started yet. Our parliament remains stuck in complaining about high prices and telling the government to do something about them.

Like in St. Maarten, in Aruba the prices in certain sectors are consistently high. There is a strong suspicion that companies are making price-agreements. Minister Winklaar says that this is hard to prove, but she disagrees with critics who say that decent competition in a small market will not succeed, even with competition legislation. “If this is possible in 128 countries with markets of all kinds of sizes, it is also possible in Aruba.”

The Chamber of Commerce is a bit more direct in its statements. Price-agreements are a big problem in Aruba, chairman Jamal Khan says. And if this is true in Aruba, why would it be different in St. Maarten?

Khan says that the practices of some entrepreneurs in Aruba would not wash in the United States. In that country they would go to jail for dealing with inside knowledge and for cartel-agreements. In Aruba, like in St. Maarten, these practices are not forbidden – not yet.

The competition legislation Aruba has in mind will force companies to give more information about their business practices. The law is designed to eliminate practices that exclude small companies from business-opportunities.

Competition is good for consumers, also in small markets like the one in St. Maarten. It forces companies to bring products to market for the best price possible and it also forces them to take customer service to higher levels. Without competition, consumers become beggars and companies set the rules.

In such an environment companies are able to offer bad products for high prices and to basically pull the plug on customer service. Why spend money on customer service if consumers are forced to buy from you?

In St. Maarten we still have a lot to learn about that aspect of doing business. The idea that the consumers are King and that companies have to do their stinking best to offer them the best possible service is alien to too many companies.

With a Competition Authority based on Aruba’s example, the government could create a situation wherein prices are driven down while customer service improves. This will give consumers more spending power; it will also offer some perspective for citizens who are not having trouble to make both ends meet at the end of the month.

All we need now is a member of parliament to wake up to this idea and run with it. We’re not at all sure that this will ever happen but if it does, we’ll keep you posted.

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