mega888 Vanuatu Business Review » COMPETITION VS PROTECTIONISM


By Ian G. Kerr,
Member of the Public

A submission from a Member of the Public to the Commissioner of Labour in relation to the new Proposed Protected Occupations list.

The recent endorsement by the Council of Ministers of the Vanuatu National Competition Policy is welcome news for our Economy. One wonders however, that those who are promoting the proposed changes under the labour (Work Permits) Act (CAP 187) are aware the existence of the policy itself, why it is so vital to the growth and development of the Country’s economy and the quality of life enjoyed by its people.

The Competition Policy sets out in detail the benefits of competition, the right to compete, the principles of competition, and sets out a list of priorities and an Action Plan for the implementation of the Competition Policy. It does not in any way endorse a closed shop for protected occupations, but rather points out how the reservation of activities and occupations for Vanuatu Citizens limits and constrains the opportunity for competition as well as preventing the entry or expansion of business activity. The Policy highlights the Economy Pillar of the National Sustainable Development Plan, ECO 4.1 “Create an improved business environment with a stable regulatory framework which promotes competition, protects consumers, attracts investment, and reduces the cost of doing business.”

The proposed 33 additional changes to the list of reserved occupations for ni-Vanuatu is in complete violation of the COM endorsed National Competition Policy, and can only be labelled as Protectionism. Protectionism can be described as a politically motivated defensive measure, in the short term it works, and is politically popular, but is destructive in the long term, making the Country and its people less competitive internationally.

When ni-Vanuatu RSE workers go abroad, they are competing with Australians and New Zealanders for the work they perform. They are successful because they are generally more productive and motivated than their foreign counterparts. Similarly in Vanuatu, competition for employment should be open to all applicants in line with the competition policy. Just because a person has a qualification or maybe a degree is not a guarantee for work, or a guarantee of one’s performance. Reliability, honesty, a good attitude and willingness to learn on the job are potentially greater attributes. Smart employers are always looking for employees who will take on more responsibility, and will promote and support accordingly. Ni-Vanuatu need to embrace the challenge of employment competition, not succumb to the depths of protected positions.

If the Countries leaders are going to take seriously the National Competition Policy, they need to start dismantling the protectionist legislation currently in place, not adding to it. The State sanctioned monopoly on energy granted to Unelco precludes competitor activity. The Countries State Owned Enterprises enjoy competitive advantages over the Private Sector, yet many are not commercially viable and require regular tax payer funding to survive. Most of these enterprises activities could be performed by the private sector operating under the Competition Policy, collecting and paying taxes as opposed to owing huge debts to the Tax Office that have to be written off.

I urge the Labour Commissioner to read and familiarize herself with the National Competition Policy. Having sound policies is both essential and instrumental to good governance in the long term. Implementing them is of course another matter.